California Lyft Settlement of $27M Reached for State’s Lyft Drivers

A California Lyft settlement has been reached, giving $27 million to Lyft drivers who allegedly did not receive their fair share of tips and covered expenses.

U.S. District Judge Vince Chhabria of San Francisco said he had no issues with the proposed settlement, even though objections had been entered previously by the Uber Lyft Teamsters Rideshare Alliance, known as ULTRA; Teamsters Joint Council 7; Teamsters Joint Council 42; and some individual Class Members.

In November 2016, the objectors noted that the proposed settlement was “minimal and highly-discounted.” In a brief, they also stated that the intended changes to Lyft’s policies were not substantial enough to make a difference.

Those objecting also expressed discontent that the issue of whether Lyft drivers are employees or independent contractors was not resolved in this litigation.

California Lyft Settlement Affects Tens of Thousands of Drivers

Nearly 95,000 Lyft drivers submitted claims to be included in the settlement, with most receiving $1 to $2 per hour worked, said the plaintiffs’ attorney Shannon Liss-Riordan of Lichten & Liss-Riordan PC in a statement she gave to Law 360.

She added that full-time drivers will receive between $2 to $4 per hour worked.

Lyft drivers who gave a minimum of one ride in California between May 25, 2012 and July 1, 2016 qualify for the California Lyft settlement.

Judge Chhabria gave preliminary approval for the settlement in June after he had rejected an earlier proposal of $12.25 million. The California Lyft settlement ends a suit begun in 2013 by lead plaintiff Patrick Cotter, who originally filed it as a nationwide class action.

Court records indicate the Lyft lawsuit was later cut back to include only California Lyft drivers, most likely because California labor laws offer different levels of protection for employees than laws in most other states.

While the California Lyft settlement would end the litigation that began over whether drivers have been misclassified and improperly reimbursed for gas and other expenses, objectors claim it stops short of clarifying the status of Lyft drivers going forward. To date, Lyft still considers its drivers to be independent contractors.

“The agreement is not perfect. And the status of Lyft drivers under California law remains uncertain going forward,” said Judge Chhabria in the order.

“The question of whether the drivers are appropriately classified as employees or independent contractors will just have to wait for another day,” said Liss-Riordan.

Drivers who complained they had been kicked off the app too hastily for relatively minor complaints won a victory because drivers will now have more protections as a result of the settlement.

Lyft has reported that more than 80 percent of its drivers say they like the independent contractor classification because it allows the drivers more flexibility of their schedules.

The California Lyft 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.

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