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Lyft Offers Millions More To Settle Driver Lawsuit

May 12, 2016, 12:16 AM UTC
Courtesy of Lyft

Ride-hailing company Lyft is making a second try at settling a class action lawsuit filed by drivers. This time, it’s upped its proposed payout to $27 million, according to documents filed on Wednesday in San Francisco federal court.

In January, Lyft attempted to settle a lawsuit by former drivers who claimed the company owed them expenses because it misclassified them as contractors instead of employees. Last month, a federal judge rejected a proposed $12.25 million settlement, saying it “shortchanged” drivers.

Under the new proposal, average “casual” Lyft drivers would receive about $131, while average “frequent drivers,” who drove an average of 700 hours, would receive about $2,000, according to court documents.

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Lyft’s new settlement proposal comes after calculations ordered by the judge showed that its California drivers would have been owed $126 million if they were employees instead of independent contractors. Under the new proposal, Lyft drivers still remain contractors. Almost all the additional money will go to the drivers, the company said in a press release.

“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,” Lyft general counsel Kristin Sverchek said in a statement.

Rival ride-hailing company Uber is also in the middle of getting approval for a $100 million settlement proposal for similar lawsuits in California and Massachusetts. Uber is also still at risk of having to increase its settlement payout considering that employment calculations showed that drivers would be owed $730 million if they were employees instead of contractors.