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Lyft has agreed to pay $272.5 million to settle claims it committed wage theft against California drivers in a six-year lawsuit by the Golden State against the rideshare company.
California Attorney General Rob Bonta and attorneys for the cities of Los Angeles, San Diego and San Francisco sued Lyft in 2020 over allegations that the company misclassified drivers as independent contractors between 2016 and 2020, meaning drivers were paid less than the minimum wage and denied other workplace protections required by state law.
The majority of the money Lyft has agreed to pay, about $237 million, will be put into a third-party fund to be allocated to drivers. Driver eligibility and compensation will be based on hours and total miles driven between April 2016 and December 2020.
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Lyft has agreed to pay $272.5 million to settle a wage-theft lawsuit against California drivers. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
“We are proud to announce this landmark win for workers, the largest misclassification settlement in the history of California,” Bonta said in a statement. “Rideshare companies like Lyft have enjoyed massive growth and profits on the back of drivers over the past decade, many of whom are from immigrant communities and communities of color. Lyft’s success would not be possible without Lyft drivers seeking to be unfairly short-changed. Hard-working employees deserve full compensation for their work.
| Ticker | Security | Finally | Change it | change % |
|---|---|---|---|---|
| LIFT | LYFT INC. | 16.13 | +0.53 |
+3.40% |
“We have not and will not stand by when companies try to shirk their legal responsibilities and deprive employees of the wages and benefits required under California law,” he continued. “We will continue to fight to empower workers, combat unfair and deceptive practices, and ensure all Californians can prosper from the fruits of their labor.”
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The majority of the money Lyft has agreed to pay, about $237 million, will be put into a third-party fund to be allocated to drivers. (Photo by Spencer Platt/Getty Images/Getty Images)
The settlement still needs to be approved by the court.
After the court approves the settlement and Lyft begins making payments into the settlement fund, eligible drivers will be notified through a third-party administrator of when they can submit information for restitution.
“When companies misclassify workers, they deny critical protections and shift the burden onto taxpayers,” Los Angeles Attorney General Hydee Feldstein Soto said in a statement. “This historic settlement sends a clear message: companies must follow the law, pay their fair share and play by the rules.”
California Attorney General Rob Bonta and the city attorneys of Los Angeles, San Diego and San Francisco sued Lyft in 2020. (Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News via Getty Images/Getty Images)
Although Lyft agreed to pay off the debt to end the lawsuit, the rideshare giant has maintained that it did not do anything wrong.
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FOX Business has reached out to Lyft for comment.
Between 2016 and 2020, Lyft reported total revenue of $9.5 billion. Most Lyft drivers take home between $11 and $18 an hour after expenses, according to data compiled by ShiftTracker.