Lyft Doubles Worker Misclassification Lawsuit Settlement to $27 Million

Logo courtesy of Lyft.

Summary: After a court finding revealed drivers should have received $126 million if they were employees, Lyft changed its settlement amount in its highly-watched worker misclassification lawsuit.

After five months, Lyft has changed its settlement offer in the lawsuit claiming the ride-sharing company misclassifies its drivers. In January, they offered $12.25 million, but now they have nearly doubled that amount to $27 million, according to documents filed in San Francisco on Wednesday.

Lyft faced a class-action lawsuit that alleged they misclassified their drivers as independent contractors, not employees. Under their current business models, Lyft drivers supply their own cars, gas, and insurance; and in turn, they set their own hours. However, powerhouse employee rights lawyer Shannon Liss-Riordan filed a lawsuit against the company, stating the drivers were employees entitled to benefits and reimbursements.

To learn more about Shannon Liss-Riordan, read this article: “4 Things You Didn’t Know about Shannon Liss-Riordan”

In late January, Lyft settled for $12.25 million and was allowed to continue keeping their drivers as independent contractors. But recently, a judge calculated Lyft’s proposal and deemed $12.25 million to be not enough. After an investigation, the court determined Lyft would have owed drivers $126 million if they were actual employees.

To learn more about Lyft’s original settlement, read this article: Lyft Settles Class Action Lawsuit for $12.25 Million

With this new proposal, part-time Lyft drivers would receive $131, while drivers who docked an average of 700 hours a year would receive $2,000, Forbes reports.

“When we originally negotiated the settlement, we used data that Lyft provided us, which turned out to be very out-of-date by the time we got to the court to seek preliminary approval. The miles driven by Lyft drivers had basically doubled. So the judge sent us back to look again at the case with the updated data, and we were able to negotiate a settlement of more than twice as much as the original deal,” Liss-Riordan told USA Today.

Liss-Riordan also sued Lyft rival, Uber, who recently settled their class action suit for $100 million. Forbes reports that Uber may have to change their settlement soon as the court found that drivers would be owed $730 million if they had been employees, not contractors.

The aforementioned lawsuits only covered drivers in Massachusetts and California. Only two weeks after Uber settled, lawyers in Florida and Illinois filed their own class-action worker misclassification lawsuits, a move that hinted Uber and similar companies were not yet done being an easy payday.