Lyft agrees to $272.5 million California driver settlement

About $237 million is earmarked for a compensation fund for drivers who allegedly received less than the legal minimum from 2016 to 2020.

Lyft has agreed to pay $272.5 million to resolve California officials’ claims over how it classified its drivers. The 2020 lawsuit alleged that treating drivers as independent contractors rather than employees deprived them of minimum-wage protections and other safeguards under state law.

About $237 million will go to a fund for driver compensation. Individual payments will depend on each driver’s hours worked and total mileage from April 2016 through December 2020.

California Attorney General Rob Bonta and representatives of the Los Angeles, San Diego and San Francisco city attorneys filed the case in 2020. They alleged that Lyft had improperly classified drivers as contractors rather than employees.

Bonta called the agreement the largest worker-misclassification settlement in the state’s history. The allegations describe the plaintiffs’ claims resolved by the agreement and do not amount to a court finding that the company was liable.