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Lyft Agrees to $272.5 Million Settlement in California Driver Misclassification Case

The deal, announced Thursday, sends at least $237 million to drivers for work from 2016 to 2020 and signals continued state enforcement of gig‑economy wage claims despite later legal changes.

Overview

  • The settlement, announced Oct. 1, 2026, must be approved by a San Francisco Superior Court before payments begin.
  • At least $237,075,000 of the $272.5 million is reserved for drivers and will be allocated by a third‑party administrator based on hours and miles driven from April 5, 2016 through December 15, 2020.
  • The case resolved claims that Lyft violated California Labor Code sections 2775 et seq. and the state’s Unfair Competition Law by misclassifying drivers and denying wages and expense reimbursements.
  • Lyft said it does not admit wrongdoing, described the deal as closing a pre‑Prop 22 chapter, and noted the agreement does not require the company to reclassify drivers for work after the covered period.
  • The Labor Commissioner and city and state prosecutors called the payout the largest misclassification or wage‑and‑hour recovery in California history and said related litigation against Uber remains active.