Lyft settlement overview:
- Who: Lyft has agreed to pay $272.5 million to resolve coordinated California claims involving the classification of its drivers.
- Why: Government officials and drivers alleged Lyft misclassified drivers as independent contractors and denied them wages and other employment protections.
- Where: The coordinated proceeding is ongoing in California state court.
- How to get help: If you were classified as salaried, exempt or an independent contractor but your actual job duties did not match your classification, you may qualify to take legal action through a misclassified employee lawsuit.
Lyft has agreed to pay $272.5 million to resolve California claims alleging the ride-hailing company misclassified drivers as independent contractors and denied them wages and benefits.
The proposed Lyft settlement would resolve four coordinated actions brought by California officials and drivers under the state’s Private Attorneys General Act (PAGA).
The litigation dates back to 2020, when the California attorney general and city attorneys for Los Angeles, San Diego and San Francisco sued Lyft over its driver classification practices.
The claims concern alleged conduct between April 5, 2016, and Dec. 15, 2020, before Proposition 22 took effect. According to Law360, officials alleged that Lyft’s classification practices deprived drivers of protections, including minimum wage, overtime pay and reimbursement for work-related expenses.
Lyft has denied the allegations. The proposed judgment states that the court has made no determination of liability.
Lyft settlement would provide payments to eligible drivers
Under the proposed agreement, Lyft would pay $120 million during the first year after the settlement takes effect, followed by $152.5 million over the next three years. Payments on the latter amount would accrue 5% simple annual interest, Law360 reports.
Eligible drivers generally include those who provided at least one Lyft ride that started or ended in California between April 5, 2016, and Dec. 15, 2020.
Most of the settlement funds allocated to eligible drivers would be distributed based on the number of miles they drove while picking up or transporting passengers during the covered period. Drivers who had pending wage claims before the California labor commissioner when the agency’s action was filed would receive double credit for those miles.
The Lyft settlement also allocates $20.44 million to California and participating cities as civil penalties. Drivers who had pending wage claims before the labor commissioner would receive another $5.45 million under the agreement.
The proposed deal would also allow the drivers who brought the PAGA claims to seek service awards of up to $20,000 each. Lyft would separately cover the first $1.25 million in settlement administration costs and share certain additional costs with the settlement fund.
Lyft said it believes its drivers have always been properly classified under California law. The company also pointed to Proposition 22, which California voters approved in 2020 and which changed how worker-classification rules apply to certain app-based drivers.
The settlement would resolve the government and PAGA claims against Lyft related to the alleged employee misclassification but would not resolve claims against Uber Technologies and related companies.
Earlier this year, a consumer sued Lyft alleging it misrepresented its Priority Pickup service as being faster than it actually is.
What do you think about Lyft’s proposed $272.5 million settlement over its driver classification practices? Let us know in the comments.
The state of California is represented by Mana Barari, Andrea E. Ringer, Sarah S. Kanbar and Nathanael Van Duzer of the California Attorney General’s Office; Michael Bostrom, Jessica B. Brown, Joshua Crowell and Mark V. Soto of the Los Angeles City Attorney’s Office; Kevin King and Eric LaGuardia of the San Diego City Attorney’s Office; and Yvonne R. Meré, Matthew D. Goldberg and Molly J. Alarcon of the San Francisco City Attorney’s Office.
California Labor Commissioner Lilia García-Brower is represented by David M. Balter, Alec L. Segarich and M. Colleen Ryan of the California Division of Labor Standards Enforcement.
The Lyft drivers are represented by Jahan C. Sagafi, Rachel Bien, Adam L. Koshkin, Alina Pastor-Chermak, Mohsin M. Mirza and Daniel S. Stromberg of Outten & Golden LLP; Christian Schreiber of Olivier & Schreiber P.C.; and Shannon Liss-Riordan of Lichten & Liss-Riordan P.C.
The Lyft coordinated proceeding is Uber Technologies Wage and Hour Cases, Judicial Council Coordination Proceeding No. 5179, Case No. CJC-21-005179, in San Francisco Superior Court.
Don’t Miss Out!
Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!
Read About More Class Action Lawsuits & Class Action Settlements:
Astound Broadband fees and price increases: Did your monthly bill go up?
September 29, 2026 | Lawsuits to Join
