Judge approves $27 million driver
settlement in Lyft lawsuit
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[March 17, 2017]
By Heather Somerville
SAN FRANCISCO (Reuters) - A U.S. judge gave
final approval on Thursday to a settlement agreement in a class-action
lawsuit against Lyft Inc, ending a legal case that challenged the
independent contractor status of the ride-hailing service's drivers.
U.S. District Judge Vince Chhabria in San Francisco gave his final
approval to the $27 million settlement, after granting preliminary
approval in June, according to court filings.
The judge had previously rejected a $12.25 million settlement offer
because it "short-changed" drivers.
Lyft drivers in California had sued the company, arguing they should be
classified as employees and therefore be entitled to reimbursement for
expenses, including gasoline and vehicle maintenance. Drivers pay those
costs themselves.
The settlement agreement keeps drivers as independent contractors.
In his order, Chhabria cautioned, "The agreement is not perfect. And the
status of Lyft drivers under California law remains uncertain going
forward."
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Uber Technologies Inc [UBER.UL] faces a similar class-action lawsuit
from drivers in California and Massachusetts. A settlement offer in that
case valued at up to $100 million was rejected last year by a judge who
deemed it inadequate for drivers.
Lyft has more than 700,000 drivers nationally and Uber has more than 1.5
million globally. The profits and valuations of these companies would be
severely affected if they had to reclassify drivers as employees.
Attorney Shannon Liss-Riordan, who represents the Lyft drivers, said on
Thursday she was "very pleased to be at the end of this process." The
lawsuit was filed in 2013.
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![](../images/031717pics/news_e9.jpg)
A smartphone app for Lyft drivers is seen during a photo opportunity
in San Francisco, California February 3, 2016. REUTERS/Stephen Lam
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A Lyft spokeswoman said the settlement agreement "will preserve the
flexibility of drivers to choose when, where and for how long they drive
with Lyft."
The company has said that driver surveys show that more than 80 percent
of Lyft drivers prefer being independent contractors because of the
flexibility that status allows.
The settlement provides thousands of dollars to Lyft drivers who logged
the most miles, although infrequent drivers will see a nominal amount of
cash. As part of the agreement, drivers also get benefits such as more
protections from getting kicked off the app.
"The question of whether the drivers are appropriately classified as
employees or independent contractors will just have to wait for another
day," Liss-Riordan said.
(Reporting by Heather Somerville; Editing by Sandra Maler)
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