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Image Credits:Smith Collection/Gado / Getty Images2:57 PM PDT · October 1, 2026
Lyft has agreed to wage $272.5 cardinal to settee a suit accusing the ride-hailing institution of violating California instrumentality by misclassifying drivers arsenic autarkic contractors, alternatively of employees.
The institution said successful a regulatory filing that it believes the colony volition let it to debar the “costs and distraction of protracted litigation and alteration absorption to support its absorption connected executing its concern objectives.”
Lyft could not beryllium reached for comment.
The colony stems from a suit filed by the California Labor Commissioner’s Office successful August 2020 that accused Lyft of treating drivers arsenic autarkic contractors alternatively than arsenic employees, arsenic required nether authorities instrumentality astatine the time.
The suit alleged that drivers were denied minimum wage and overtime arsenic good arsenic different benefits and protections provided to employees, including paid sick permission and timely wage payments.
“This colony is astir the workers who came guardant and spoke up. Their voices made this result possible,” California Labor Commissioner Lilia García-Brower said successful a statement, adding that the LCO volition forgo its stock of the colony and nonstop those funds to drivers who filed wage claims.
The settlement, which inactive indispensable beryllium approved by a judge, covers alleged violations from April 6, 2016 to December 15, 2020 — a play California was grappling with whether workers successful the booming gig system were autarkic contractors oregon an employees.
Today, drivers for app-based proscription services similar Lyft and Uber are classified arsenic contractors aft voters passed ballot measurement Proposition 22 successful 2020. The ballot measurement provided a carve-out from Assembly Bill 5, a authorities instrumentality passed successful 2019 that required companies similar DoorDash, Lyft, and Uber to classify gig workers arsenic employees, entitling them to minimum wage, workers’ compensation, and different benefits.
Even aft AB 5 took effect, Lyft, Uber, and different companies that relied connected gig workers continued to classify their drivers arsenic contractors. That yet led to ineligible enactment from the LCO, California Attorney General and the City Attorneys of Los Angeles, San Diego and San Francisco, arsenic good arsenic backstage actions filed nether California’s Private Attorneys General Act. The cases were coordinated successful San Francisco Superior Court successful September 2021.
The colony closes this ineligible chapter, astatine slightest for Lyft. Uber inactive faces an LCO suit that makes akin allegations.
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Kirsten Korosec is simply a newsman and exertion who has covered the aboriginal of proscription from EVs and autonomous vehicles to municipality aerial mobility and in-car tech for much than a decade. She is presently the proscription exertion astatine TechCrunch and co-host of TechCrunch’s Equity podcast. She is besides co-founder and co-host of the podcast, “The Autonocast.” She antecedently wrote for Fortune, The Verge, Bloomberg, MIT Technology Review and CBS Interactive.
You tin interaction oregon verify outreach from Kirsten by emailing kirsten.korosec@techcrunch.com oregon via encrypted connection astatine kkorosec.07 connected Signal.
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