Business · updated 1h ago · 2 min read
Lyft Agrees To Pay $272.5 Million In California Driver Misclassification Settlement
Lyft to pay $272.5 million to California state and three cities to settle misclassification claims Settlement covers 2016-2020 driver classifications and provides compensation for lost wages/benefits
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9 of 10 outlets skipped it: lyft may pay settlement over four years with capped interest.
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Lyft settlement announced
Lyft agreed to pay $272.5 million to settle California claims that it misclassified drivers as independent contractors rather than employees in order to save money, with the deal announced on October 1, 2026 by the state prosecutor and the cities of San Francisco, Los Angeles, and San Diego. California’s attorney general Rob Bonta said, “We are proud to announce this landmark win for workers, the largest misclassification settlement in California’s history,” and the settlement is subject to approval in San Francisco Superior Court.
The settlement covers work performed between April 5, 2016 and December 15, 2020, and it sets aside at least $237 million for drivers while requiring a minimum number of driving hours during pickup and passenger transport. Lyft said it “believes drivers have always been properly classified under the law, and we're glad to put this case behind us,” and the court document states the resolution does not constitute an admission of liability by the company.
Who gets paid
California Labor Commissioner Lilia García-Brower said her office is forgoing its part of the settlement, $5.45 million, “so that every available dollar goes directly to drivers who filed wage claims.” The settlement administrator will manage the fund and contact drivers once the San Francisco Superior Court approves the settlement and Lyft begins making payments to the fund.
The agreement defines someone as “covered” if they performed at least one trip that started or ended in California during the dates, but it still requires drivers to meet a minimum number of driving hours during pickup and passenger transport. Rideshare Drivers United said the settlement falls short of the $434 million in claims it filed on behalf of about 1,900 Lyft drivers, and Nicole Moore said, “Yes, we are getting some of the money back because we fought for it, but why do they not have to pay basic minimum wages and expenses like every other company?”
Next steps and context
California officials said the settlement closes a chapter from “a very different time, before Prop 22,” and the deal covers the period before Proposition 22 took effect.
Lyft said the settlement “closes a chapter from a very different time, before Prop 22,” and Lyft also said it “remains laser focused on helping create more earnings for drivers and more affordable rides for riders.”
San Diego City Attorney Heather Ferbert said, “Uber has a larger share of the rideshare market, and that means more drivers, more miles driven and more affected workers. So our job is not done,” and she said the case against Uber could go to trial if Uber does not settle.
The settlement does not resolve the lawsuits against Uber that are coordinated in the same case, and the next steps for Lyft drivers are judicial approval, definition of the minimum hours, and the implementation of the payout mechanism.