From Ars Technica · · 2m
Lyft pays $272.5M to settle driver misclassification case
California's largest wage theft settlement ends a lawsuit over whether rideshare drivers should have been classified as employees.
In brief
California's largest wage theft settlement ends a lawsuit over whether rideshare drivers should have been classified as employees. Lyft agreed to pay two hundred seventy two point five million dollars to settle allegations it misclassified drivers as independent contractors between two thousand sixteen and two…
Lyft settles landmark misclassification case
California's attorney general and three city attorneys announced a two hundred seventy two point five million dollar settlement with Lyft over allegations the company committed wage theft by misclassifying drivers as independent contractors rather than employees between two thousand sixteen and two thousand twenty.
Case began with dual lawsuit in 2020
Then-Attorney General Xavier Becerra sued both Uber and Lyft in May two thousand twenty, alleging the ridehailing companies evaded state law by declaring their drivers were not employees. Thursday's settlement affects only Lyft while the case against Uber continues.
Officials call it largest misclassification settlement
Attorney General Rob Bonta said the settlement is the largest misclassification settlement in California's history. Los Angeles City Attorney Hydee Feldstein Soto said the case sends a message that companies must follow the law, pay their fair share, and play by the rules.
“Companies must follow the law, pay their fair share, and play by the rules.”
Proposition 22 limited settlement to 2016-2020
California voters approved Proposition twenty two in November two thousand twenty, a ballot measure organized primarily by Uber and Lyft that gave ridehailing companies an exemption to Assembly Bill five. This is why the settlement only covers the two thousand sixteen to two thousand twenty period.
Lyft defends driver classification choice
Lyft CEO David Risher said the vast majority of rideshare drivers in California have always wanted to be independent contractors and voters affirmed that when they passed Proposition twenty two in two thousand twenty. Lyft believes drivers have always been properly classified under the law.
“The vast majority of rideshare drivers in California have always wanted to be independent contractors.”
Critics say settlement fails drivers
Law professor Veena Dubal at the University of California, Irvine said the settlement is a paltry sum compared to what drivers are owed. She argued that paying only a small portion to thousands of low-income, mostly immigrant and racial-minority workers means the system is not working the way it should.
“This is a paltry sum compared to what drivers are owed.”
The takeaway
Lyft agreed to pay two hundred seventy two point five million dollars to settle allegations it misclassified drivers as independent contractors between two thousand sixteen and two thousand twenty, denying them employee protections.
