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Lyft Settles California Lawsuit For $27 Million, Drivers Are Not Employees

Ride sharing is a complicated business, and things are not easy for anyone involved.
A car that is used by a Lyft driver 1 photo
Photo: Lyft
Drivers feel that they are misused, companies that offer apps in the field face government opposition, and riders complain about risks and fees.

Somehow, in this industry where almost everyone involved is somehow complaining or unsatisfied with one or several aspects, capital is being made. The billion-dollar ride-sharing industry is a place where several companies compete for a slice of the market share, while governments want to regulate everything, and drivers want to be treated as employees.

Riders want to get rid of surge fees, and just want to be sure that they pay for a safe ride to their destination with a trusted driver.

Lyft is one of the companies in the field of ride-sharing, and it is Uber’s main competitor on the American market. Just like Uber, Lyft was called to court by some of its drivers. In this case, it was a class action lawsuit that had the goal of establishing Lyft drivers as company employees instead of the current definition of “independent contractors.”

The difference between the two involved Lyft paying for fuel and maintenance of the vehicles used for its service. Unfortunately for the drivers, they did not get to be considered Lyft employees, and their status according to California law remains uncertain going forward.

However, they did get a settlement deal of $27 million, which will be paid by Lyft. Initially, the company agreed to pay $12.5 million, but the U.S. District Judge Vince Chhabria considered the amount too small.

As Engadget notes, the judge felt that some plaintiffs were being short-changed, as the ones with the least amount of time with the company would only receive about $1,000 under the original deal. Eventually, the same judge gave the higher value his approval, and all that is left is for Lyft to pay the sum.

Another benefit of the settlement involves eliminating the possibility of Lyft terminating some of its drivers from the service unless they break one of the rules on the predetermined list, which includes low passenger ratings. Furthermore, Lyft will have to pay bonuses to those who consistently perform well on the job.
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About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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