LOS ANGELES — Today, City Attorney Hydee Feldstein Soto, California Attorney General Rob Bonta, the City Attorneys of San Francisco and San Diego, and the California Labor Commissioner's Office announced a $272.5 million settlement with rideshare company Lyft. The settlement addresses allegations that, between 2016 and 2020, Lyft committed wage theft by misclassifying drivers as independent contractors rather than employees. Subject to court approval, the agreement resolves claims against Lyft for misclassifying its drivers as independent contractors in violation of California Labor Code sections 2775 et seq. and California’s Unfair Competition Law.
“Los Angeles and our statewide partners will not allow businesses to exploit their workers and evade their obligations under the law,” said Hydee Feldstein Soto, Los Angeles City Attorney. “When companies misclassify their workers, they deny them critical protections and shift the burden onto taxpayers. This historic settlement sends a clear message: companies must follow the law, pay their fair share and play by the rules.”
“We are proud to announce this landmark win for workers, the largest misclassification settlement in California’s history,” said Attorney General Bonta. “Rideshare companies like Lyft have enjoyed massive growth and profits on the backs of drivers over the past decade, many who are from immigrant communities and communities of color. Lyft’s success would not be possible without the drivers who Lyft sought to unfairly short-change. Hard-working employees deserve full compensation for their labor. We have not and will not stand by when companies attempt to shirk their legal responsibilities and deprive employees of their wages and benefits as required under California law. Subject to court approval, today's settlement will put money back in the pockets of thousands of drivers who have waited for their long-deserved pay. We will continue to fight to empower workers, combat unfair and deceptive practices, and ensure all Californians can thrive from the fruits of their labor.”
“Every worker deserves to be paid fully and fairly,” said San Francisco City Attorney David Chiu. “For years, Lyft drivers provided essential services keeping our communities moving while being denied the wages and benefits they earned. Misclassification exploits workers, fuels inequality, and creates an unfair economy. This is the largest wage and hour settlement in California history, reflecting both the seriousness of the harm and our unwavering commitment to stand up for workers across California.”
"This is what's possible when state and local prosecutors stand together for workers," said San Diego City Attorney Heather Ferbert. "I'm grateful to Attorney General Bonta and our partners for years of persistence through every step of this complex lawsuit. For San Diego, that persistence means millions of dollars going back to drivers, many of whom were working to support their families. Lyft coming to the table is an important step, but it doesn't close the book on misclassification in the gig economy. There is still a lot at stake for drivers, and my Office will keep fighting until every worker gets what they've earned."
“This settlement is about the workers who came forward and spoke up. Their voices made this outcome possible,” said California Labor Commissioner Lilia García-Brower. “We pursued this case to ensure workplace protections have real meaning and to recover as much as possible for drivers. I’m grateful to the courageous workers who came forward to assert their rights and to the dedicated advocates who stood with them throughout the process."
In 2020, the coalition brought a lawsuit on behalf of the People of the State of California alleging that Lyft’s misclassification of drivers deprived workers of critical workplace protections such as the right to minimum wage and overtime and the right to be reimbursed for their work-related expenses between 2016 and 2020. The lawsuit followed the introduction of the “ABC test:” the groundbreaking legal test used to analyze the misclassification of workers, which was first adopted by the California Supreme Court in 2018 in Dynamex Operations West, Inc. v. Superior Court and then codified into law under AB5. In the midst of litigation, Proposition 22 altered how the ABC test is applied to certain app-based drivers. Despite several appeals and changes in the law, the partners remained resilient, winning every legal challenge in court and remaining steadfast in their demands for drivers’ deserved wages and protections.
Under the settlement, Lyft must pay $272,500,000 in restitution and penalties. The restitution amount will be set into a fund managed by a third-party settlement administrator. At least $237,075,000 will be reserved for drivers who worked for Lyft. Driver eligibility and compensation will be based on the number of hours and miles driven between April 5, 2016, through December 15, 2020.
After the settlement is approved and Lyft begins making payments to the settlement fund, eligible workers will be contacted by the third-party settlement administrator. The settlement administrator will establish a website, email address, and call center to inform and answer questions from drivers who believe they are eligible for restitution. The coalition will provide more details about these resources in the near future.
Feldstein Soto and the coalition worked alongside the California Labor Commissioner's Office and a group of private plaintiffs represented by Outten & Golden LLP, Olivier & Schreiber PC, and Lichten & Liss-Riordan P.C to achieve today’s settlement.
The Public Rights Branch managed this litigation on behalf of the Los Angeles City Attorney’s Office.
Superior Court of the State of California, County of San Francisco: Case No. CJC-21-005179
Stipulated Judgment and Settlement Agreement
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Hydee Feldstein Soto is the 43rd Los Angeles City Attorney, elected in November 2022 and sworn into office in December 2022. Her team of nearly 1,000 legal professionals, including 500+ attorneys, carries out legal work for the City of Los Angeles at her direction and under her supervision. She is the first female City Attorney in L.A. history.