Lyft Agrees to $272.5 Million Driver Settlement: Who Qualifies and How Payment Works

Lyft has agreed to pay $272.5 million to settle a lawsuit claiming it misclassified California drivers as independent contractors between 2016 and 2020. San Francisco City Attorney David Chiu, California Attorney General Rob Bonta and the city attorneys of Los Angeles and San Diego announced the deal on October 1, 2026. Chiu called it “the largest wage and hour settlement in California history,” Mission Local reported.

The case was consolidated in San Francisco Superior Court in 2021, and San Francisco’s City Attorney is one of the offices that brought it. Here is what the deal covers and how payment is supposed to work.

Who is covered

Drivers who drove for Lyft in California between April 5, 2016 and December 15, 2020 are eligible. That window ends just after voters approved Proposition 22 in November 2020, which classifies app-based drivers as independent contractors. The settlement covers only the earlier period and does not change how Lyft classifies drivers today, SFist reported.

How much goes to drivers

At least $237.075 million is set aside for drivers, about 87 percent of the total, according to CBS Sacramento and Mission Local. Each driver’s share is based on the hours and miles they drove during the covered period. SFist reports that the state Labor Commissioner’s Office waived its $5.45 million share so more money would go to drivers.

How drivers get paid

A third-party settlement administrator will contact eligible drivers, and a dedicated website, email address and call center will be set up for questions, KPBS reported. The settlement still needs a judge’s approval. Once it is approved, Lyft can spread the payments over four years, according to SFist.

What the two sides say

The lawsuit, filed in 2020, alleged that Lyft denied drivers minimum wage, overtime and expense reimbursement. “Every worker deserves to be paid fully and fairly,” Chiu said, according to Mission Local. Bonta said, “Make no mistake, misclassification is how companies cheat workers,” SFist reported.

Lyft does not admit wrongdoing. “Lyft believes drivers have always been properly classified under the law, and we’re glad to put this case behind us,” the company said, according to CBS Sacramento.

Not every driver group is satisfied. Rideshare Drivers United said the amount falls short of the $434 million it had sought for about 1,900 Lyft drivers, SFist reported.

What’s next

A similar lawsuit against Uber is still pending in San Francisco Superior Court, according to Mission Local. For a related look at how app-based car services are reshaping the city, see our report on where robotaxis park in San Francisco.

Photo: SPUR (photo by Sergio Ruiz), CC BY 2.0, via Wikimedia Commons.