Lyft to Pay $12M in Driver Class Action Lawsuit Settlement

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Lyft has agreed to pay $12.25 million and provide significant benefits to drivers in order to end a putative class action lawsuit that accused the ride-sharing, mobile app company of misclassifying drivers as independent contractors.

While the Lyft class action settlement will give drivers added protections, the company did not agree to change the employment status of their drivers.

According to the Lyft settlement, the transportation app company will no longer terminate drivers at will, but rather only for a specific reason. Lyft also agreed to pay for the costs related to arbitration for claims brought against the company by a driver regarding deactivation or pay related issues.

Lead plaintiff Patrick Cotter filed the Lyft class action lawsuit two and a half years ago over allegations that while drivers are classified as independent contractors, they are treated as employees and therefore Lyft should have to follow California labor laws.

Cotter claimed that Lyft’s mandatory policies and training resembled that of what is required of an employee rather than a contractor under California law.

In March, Lyft tried to get summary judgement granted but U.S. District Court Judge Vince Chhabria denied the request and found that a jury should determine whether or not Lyft drivers are employees.

“Lyft concerns itself with far more than simply connecting random users on its platform, it markets itself to customers as an on-demand ride service, and it actively seeks out those customers,” Judge Chhabria wrote in his motion.

According to the Lyft class action lawsuit settlement, more than 100,000 drivers have given at least one ride within the state of California and would qualify for a portion of the settlement fund.

Class Members are expected to receive a pay-out based on a point system. Drivers who work more than 30 hours per week for Lyft will receive more settlement points. The Lyft class action settlement predicts that Class Members are likely to get more than $200.

The next hearing on the Lyft lawsuit settlement is scheduled for Feb. 18.

More information about the Lyft class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

The plaintiffs are represented by Matthew D. Carlson of Carlson Legal Services and Shannon Liss-Riordan of Lichten & Liss-Riordan PC.

The Lyft Driver Class Action Lawsuit Settlement is Cotter, et al. v. Lyft Inc., et al., Case No. 3:13-cv-04065, in the U.S. District Court for the Northern District of California.

UPDATE: On Feb. 11, 2016, a California federal judge listed one-dozen questions for the parties to answer before signing off on the Lyft $12 million settlement.

UPDATE 2: On May 11, 2016, a group of Lyft drivers have asked a California federal judge to preliminarily approve a $27 million class action settlement over allegations Lyft misclassified its California drivers as independent contractors.

UPDATE 3: The California Lyft driver class action settlement is now open! Click here to file a claim.

UPDATE 4: On Nov. 16, 2016, Lyft drivers urged a California federal judge to grant final approval to a $27 million settlement stemming from a class action lawsuit brought by drivers who want to be treated as employees and not independent contractors.