Lyft agreed to pay $272.5 million to settle California claims that it misclassified drivers as independent contractors between 2016 and 2020.
The big picture: Attorney General Rob Bonta announced the deal alongside the city attorneys of San Francisco, San Diego and Los Angeles, the state Labor Commissioner and a group of private plaintiffs. The case began as a 2020 lawsuit brought on behalf of the people of California.
- At least $237,075,000 of the total is reserved for drivers, with eligibility and payment based on hours and miles driven from April 5, 2016 through December 15, 2020.
What they're saying: "We are proud to announce this landmark win for workers, the largest misclassification settlement in California's history," Bonta said, adding that rideshare companies grew on the backs of drivers over the past decade.
- San Francisco City Attorney David Chiu called it the largest wage and hour settlement in California history.
The backstory: The suit followed the ABC test, adopted by the California Supreme Court in the 2018 Dynamex ruling and written into law as AB5. Proposition 22 later changed how that test applies to app-based drivers, and the state won every legal challenge along the way.
What's next: A court must approve the settlement. A third-party administrator will then set up a website, an email address and a call center, and will contact eligible drivers directly.
Why it matters: Gig classification decides who gets minimum wage, overtime and expense reimbursement, and a quarter-billion-dollar bill sets a price on getting it wrong. San Diego City Attorney Heather Ferbert said the deal leaves misclassification in the gig economy unresolved.
