The on-demand car-sharing company Lyft has agreed to a settlement in a lawsuit brought by drivers in California who sought to be classified as employees rather than independent contractors. Under the agreement, Lyft will provide some additional driver benefits while still withholding employee status. The settlement, filed late on Tuesday, provides an interesting light in which to consider the similar-class action lawsuit against Lyft competitor Uber scheduled to go to court in June.
The Lyft settlement includes $12.25 million in damages for drivers in California, which will be paid out in proportion to how much time each driver has spent driving for Lyft in the state. The settlement also provides various changes to the terms of service. Lyft will no longer be able to fire drivers at will, and drivers will be able to contest deactivation and pay issues through arbitration, at Lyft’s expense. The settlement still needs to be approved by a federal judge.
“We are pleased to have resolved this matter on terms that preserve the flexibility of drivers to control when, where and for how long they drive on the platform,” Lyft general counsel Kristin Sverchek said in a statement. Liss-Riordan also celebrated the agreement, telling Wired, “We believe this is a fair settlement and adequate resolution of the claims we brought, given the risks we faced in the litigation against Lyft.”