Lyft Agrees to $272.5 Million California Driver Settlement
Lyft agrees to pay $272.5 million to settle California driver misclassification claims from 2016 to 2020, with the deal still awaiting judicial approval.
Summary
On October 1, 2026, Lyft agreed to pay $272.5 million to settle a California Labor Commissioner’s Office lawsuit filed in August 2020 over classifying drivers as independent contractors instead of employees. Covering alleged violations from April 6, 2016, to December 15, 2020, the case says drivers were denied minimum wage, overtime, paid sick leave, timely wage payments and other employee protections. The settlement requires judicial approval. Lyft said it would avoid prolonged litigation costs and distraction, while the company was unavailable for further comment.
Labor Commissioner Lilia García-Brower credited workers who spoke up and said her office will forgo its settlement share so the money goes to drivers who filed wage claims. Assembly Bill 5, passed in 2019, required DoorDash, Lyft and Uber to classify gig workers as employees entitled to minimum wage, workers’ compensation and other benefits, but the companies maintained contractor status. Proposition 22 created an exemption in 2020, leaving app based transportation drivers classified as contractors today. Actions involving the Labor Commissioner, California Attorney General, city attorneys of Los Angeles, San Diego and San Francisco, and private claims under the Private Attorneys General Act were coordinated in San Francisco Superior Court in September 2021. Approval would close Lyft’s case, while Uber still faces similar Labor Commissioner allegations.
Positives
- $272.5 million would settle Lyft’s California driver classification case if a judge approves the agreement.
- The Labor Commissioner’s Office will surrender its settlement share to drivers who filed wage claims.
- April 6, 2016, to December 15, 2020, claims would be covered by the proposed settlement.
- Judicial approval would end this chapter of Lyft’s coordinated California litigation.
Risks & concerns
- Drivers allegedly lost minimum wage, overtime, paid sick leave, timely payments and other employee protections.
- The $272.5 million settlement remains uncertain until a judge approves it.
- Lyft, Uber and other gig companies continued using contractor classifications after Assembly Bill 5 took effect.
- Uber still faces a Labor Commissioner lawsuit containing similar driver misclassification allegations.