Lyft offers $27m settlement in Californian employee status case

DrivingTaxi platform Lyft has reached an updated settlement agreement in a class action case disputing the status of drivers in California.

The revised agreement aims to resolve the the Cotter v Lyft class action case, which includes more than 163,00 drivers, currently pending in federal court in the Northern District of California.

The settlement will see Lyft provide a $27m (£18.7m) payment to drivers, in part to account for the growth in miles logged by Lyft drivers over the class action period. The payment will be distributed among the drivers according to the hours they have worked.

Under the agreement, Lyft drivers in California will continue to operate as independent contractors.

The updated agreement will only applying to drivers on the Lyft platform in California.

Lyft will amend terms of service and product changes nationwide once the new agreement has been approved.

Features of the original agreement that will remain include a revised deactivation policy and payment of arbitration fees and claims.

The plaintiffs have filed the revised settlement agreement and motion for preliminary approval with the court.

Kristin Sverchek, general counsel at Lyft, said: “In light of Lyft’s continued growth, we agreed to update the resolution in a way that both increased monies paid to drivers and helped preserve their flexibility to control when, where and for how long they drive on the platform.”

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Shannon Liss-Riordan at law firm Lichten and Liss-Riordan, added: “We are proud to have reached this new agreement, which will provide significant payments to Lyft drivers who have put a lot of their time into this [organisation].

“Once again, although the agreement does not resolve for the future the question of whether Lyft drivers should properly be classified as employees or independent contractors, we believe this agreement provides a fair resolution of this case, will get money into the pockets of the drivers now, and will provide them greater job security.”