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$12M Settlement Reached in Lyft Driver Misclassification Class Action Lawsuit

This is a settlement for the Employment lawsuit.

Santa Clara, CA: A $12.25 million employment class action settlement has been reached between Lyft drivers and the ride share app, which would provide additional job security to a proposed class of drivers, both current and former workers for Lyft in California. However, Lyft refuses to classify its drivers as employees.

Currently, drivers for Lyft are classified as independent contractors. According to the terms of the settlement, Lyft will also concede its right to terminate drivers at will, pay the costs to arbitrate drivers' grievances and implement a pre-arbitration process, and provide drivers with additional information on prospective riders such as their passenger ratings.

The lawsuit was filed by Lyft driver Patrick Cotter, in September 2013, over allegations that while the company classified its drivers as independent contractors it treated them as employees, including taking 20 percent off their tips as an "administrative fee", a violation of California labor laws.

Further, Cotter claimed in the suit that Lyft required inspection of drivers' personal cars and insurance policies, and that the company maintained the right to fire drivers, and enforced mandatory policies and training, all of which is treatment more befitting employees than contractors under California law.

The suit was initially proposed as a nationwide class action but was later changed to cover drivers in California only, court records show.

Additionally, the settlement agreement stipulates that Lyft create a "favorite"driver option in which riders can designate their preferred drivers, and, as such, give them additional benefits. Further, because Lyft has surrendered its at-will termination right, drivers will now be able to turn down rides without fear of their account being deactivated, the settlement motion states.

The next settlement hearing will be on February 18, 29016. The case is Cotter et al. v. Lyft Inc. et al., case number 3:13-cv-04065, in the U.S. District Court for the Northern District of California.

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Published on Jan-27-16


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