Lyft drivers would have recouped an average of $835 each under a
standard rate for mileage reimbursement set by the U.S. government,
according to the documents, which were made public on Friday and had
not been previously reported.
Lyft and larger rival Uber Technologies Inc [UBER.UL] face legal
actions from drivers who contend they should be classified as
employees and therefore entitled to reimbursement for expenses,
including gas and vehicle maintenance. Drivers currently pay those
The new figures, requested by a judge and calculated by attorneys
for the drivers based on data supplied by Lyft, provide a rare
glimpse into how much ride-hailing services may save by classifying
drivers as independent contractors rather than employees.
In a statement, Lyft said a recent survey showed that 82 percent of
drivers preferred being classified as independent contractors. The
company also called the reimbursement calculation "hypothetical and
misleading," partly because it assumed some drivers would be deemed
employees even if they only worked "a handful of hours."
The judge asked for the estimates as part of his oversight of a
proposed settlement of a class-action lawsuit filed by California
drivers against the ride service.
More than 100,000 of the 150,602 drivers included in the settlement
drove fewer than 60 hours during the four-year period at issue and
likely would have made less than $835 each in expense reimbursements
had they been considered employees.
Other drivers racked up hundreds of hours and would have been
entitled to far more, the documents show. More than 1,500 drivers
drove 1,000 hours or more over the four years.
It is unclear how many drivers Lyft has across the country. The
company operates in more than 200 U.S. markets and has raised about
$1.4 billion to date from investors, including General Motors Co,
Andreessen Horowitz and Alibaba Group Holding Ltd. It is valued in
the private market at $5.5 billion.
In an interview last week with Reuters, prior to the release of the
documents, Lyft President and co-founder John Zimmer said drivers
were better served by company programs - with higher payments to
drivers who work more, the opportunity to get tips, and access to
discounted gasoline - than if they were reclassified as employees.
"It should be understood that this is a specific industry where our
average driver is doing 15 hours, and we are trying to create
benefits for all drivers," Zimmer said. "We've thought about it from
the perspective of all the drivers on the platform. ... We are
trying to do what is the right legal path, and for us that's quite
Lyft agreed to settle the class-action lawsuit in January. Under the
proposed deal, Lyft would pay $12.25 million, with drivers receiving
an average of $56 each after attorneys' fees and other expenses,
During settlement negotiations, attorneys for the plaintiffs said in
filings that they believed drivers were entitled to expense
reimbursements totaling $64 million, far less than the $126 million
they had calculated after being provided with updated Lyft records.
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"During these few months since the agreement was negotiated, Lyft
has grown substantially (far beyond what Plaintiffs would have
predicted at the time they were negotiating)," they wrote.
Based on the updated reimbursement data provided by Lyft, the $12.25
million settlement represents slightly less than 10 percent of the
potential value of the claim, they said. Plaintiff attorneys have
argued that the deal was a good one for drivers, partly because Lyft
would no longer be able to summarily terminate drivers from its
The latest figures were submitted in response to questions about the
proposed settlement from U.S. District Judge Vince Chhabria in San
Francisco, who is expected to consider whether to preliminarily
approve the deal at a hearing this week.
Earlier this month five drivers and the International Brotherhood of
Teamsters union objected to the proposed settlement, saying it would
shortchange drivers by keeping them as independent contractors.
"Plaintiffs have not properly calculated the value of the class's
claims, have not considered the ongoing economic - and public cost -
of Lyft's misclassification scheme," they wrote.
The Teamsters also filed a complaint against Lyft with the National
Labor Relations Board, the federal agency charged with investigating
and ruling on unfair labor practices.
Shannon Liss-Riordan, who represents the plaintiffs, said the
lawyers also would have preferred that drivers be reclassified as
employees, but the risks of continuing the lawsuit were too great.
Nothing about the settlement precludes NLRB action, she said.
"Based on the data we reviewed, the vast majority of Lyft drivers
have driven very little – even less than 30 hours total for the
company, which is why the average amount per driver is so low," she
The data underscores Lyft's argument that the majority of its
drivers are part-time, using the service to supplement other income.
About 83,000 California drivers drove fewer than 30 hours total over
the past four years, according to court documents. Of the 150,602
total Lyft drivers covered by the settlement, drivers worked an
average of 92 hours each during the four-year period.
(Reporting by Dan Levine and Heather Somerville; Editing by Sue
Horton, Lisa Girion and Richard Chang)
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