Plaintiffs Seek Approval of Revised $27M Lyft Driver Settlement

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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.

This new settlement was reached after a federal judge rejected an earlier version that required Lyft to pay only $12 million to end the litigation. In rejecting the earlier deal, U.S. District Judge Vince Chhabria expressed concern that the drivers would not be adequately compensated from the class action settlement.

On May 11, the plaintiffs asked Judge Chhabria to preliminarily approve the revised Lyft class action settlement “on the grounds that its terms are sufficiently fair, reasonable and adequate for notice to be issued to the class.” None of the settlement funds in the proposed deal will revert back to Lyft, according to the class action settlement documents.

In addition to providing monetary benefits to Class Members, the new settlement would require Lyft to make significant changes to its employment policies. Under the terms of the California driver misclassification settlement, Lyft will no longer be able to deactivate drivers at-will, but will only be allowed to deactivate drivers for specific reasons and only after they are given an opportunity to address Lyft’s concerns.

Lyft will also provide drivers with an optional pre-arbitration dispute resolution program, and the company will pay arbitration fees and costs for claims brought by drivers related to their deactivation, pay-related issues or other matters related to the employment relationship with Lyft.

“The practical result of these negotiated-for provisions is that fewer drivers will be subject to deactivation in the first place, and drivers who are threatened with deactivation, or who have been deactivated, will have a realistic means of getting back on the Lyft platform,” the Lyft class action settlement documents state.

The proposed Lyft class action settlement does not resolve the issue of whether Lyft drivers should be classified as independent contractors or employees. However, if the deal is approved, it would result in Lyft drivers receiving compensation much sooner than they would if the class action lawsuit went to trial. In addition, the policy changes outlined in the settlement provide them with greater job security.

Under the terms of the revised Lyft class action settlement, Lyft drivers who only worked a few days would receive an average payout of about $25, while drivers who worked at least six months could get more than $6,000.

The proposed Class includes more than 162,000 California Lyft drivers.

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

Class Members are represented by Shannon Liss-Riordan of Lichten-Riordan PC and Matthew D. Carlson of Carlson Legal Services.

The Lyft Driver Misclassification Class Action Lawsuit 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: The California Lyft driver class action settlement is now open! Click here to file a claim.

UPDATE 2: 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.

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