Lyft agrees to 272.5 million dollar settlement over California driver classification
Lyft disclosed a 272.5 million dollar agreement to resolve California claims that it misclassified drivers as independent contractors during 2016–2020. The amount includes legal fees, and the company can spread payments over four years. Lyft says it admits no wrongdoing and makes no commitment to change future operations. It will exclude the settlement charge from adjusted earnings.
Economics & Markets··Midday
Lyft settles historical driver claims
Lyft, the ride-hailing company, agreed to settle compensation claims involving drivers in California, a US state. The deal was reached on 30 September and disclosed on 1 October.[1], [2]
The 272.5 million dollar settlement covers allegations that drivers were treated as independent contractors rather than employees between 5 April 2016 and 15 December 2020. Participants include California’s attorney general and labor commissioner, lawyers for San Francisco, Los Angeles and San Diego, and two private plaintiffs. The total includes legal fees.[1]
Payments can be spread over four years
Lyft can pay the amount over four years. Outstanding balances after the first year carry 5 per cent annual simple interest, with additional interest capped at 12.4 million dollars. The agreement imposes no prepayment penalty.[1]
The company says the settlement contains no admission of wrongdoing and makes no commitment concerning its future operations.[1]
Lyft excludes the charge from adjusted earnings
Lyft had recorded a 210 million dollar provision for the disputes in the fourth quarter of 2025. It will exclude the settlement charge from adjusted earnings before interest, taxes, depreciation and amortisation, and from the corresponding margin against total bookings. On 30 September, it reaffirmed the third-quarter outlook issued on 6 August.[1]
