Lyft Settles Wage Theft Claims for $272.5 Million
Lyft has agreed to pay $272.5 million to resolve claims of wage theft stemming from a six-year lawsuit initiated by California. This lawsuit accused the rideshare company of misclassifying drivers as independent contractors, which allegedly led to significant underpayment below minimum wage and a lack of various workplace protections mandated by state law.
California Attorney General Rob Bonta, alongside city attorneys from Los Angeles, San Diego, and San Francisco, filed the lawsuit in 2020, citing that Lyft had unfairly labeled drivers as independent contractors between 2016 and 2020. This classification, they argued, stripped drivers of essential protections and benefits.
Of the settlement amount, approximately $237 million will be placed in a fund to be distributed to the drivers. The compensation will be determined by the total hours worked and miles driven from April 2016 to December 2020.
Bonta described this settlement as a significant victory for workers, stating it stands as the largest misclassification settlement in California’s history. “Rideshare companies like Lyft have prospered immensely, often at the expense of drivers, many of whom belong to immigrant and marginalized communities,” he noted. He emphasized that drivers deserve full remuneration for their efforts.
Bonta also criticized companies that try to evade their legal responsibilities. “We won’t ignore when companies sidestep their obligations and deprive employees of necessary wages and benefits,” he added, vowing to continue advocating for worker rights and fair practices.
The agreement is still pending approval from the court, and once it gets the green light, Lyft will start making payments into the settlement fund. Eligible drivers will receive notifications about how to claim their compensation through a third-party administrator.
Los Angeles City Attorney Hydee Feldstein Soto remarked that misclassification of workers not only denies them vital protections but also burdens taxpayers with the fallout. She indicated that this landmark settlement sends a firm message that businesses must adhere to legal standards and treat employees fairly.
While Lyft has consented to this settlement, it maintains that it did not engage in any wrongful behavior throughout the legal proceedings.
Between 2016 and 2020, Lyft reported revenue totaling $9.5 billion. According to data from ShiftTracker, most drivers earn between $11 and $18 an hour after their expenses are accounted for.
