Lyft to pay $272 million settlement to California rideshare drivers

A settlement has finally been reached in the six-year lawsuit California waged against the rideshare giant Lyft. The company will pay $272.5 million to settle claims that it committed wage theft against its drivers.

California Attorney General Rob Bonta, alongside the city attorneys of Los Angeles, San Diego and San Francisco, sued Lyft in 2020 after the company was accused of misclassifying drivers as independent contractors from 2016 through 2020. This misclassification meant drivers were paid well below minimum wage and were denied other legally required workplace protections.

“Rideshare companies like Lyft have enjoyed massive growth and profits on the backs of drivers over the past decade, many of whom are from immigrant communities and communities of color,” Bonta said in a statement. “Lyft’s success would not be possible without the drivers Lyft sought to unfairly short-change. Hard-working employees deserve full compensation for their labor.”

Lyft has agreed to pay a $272.5 million settlement; the majority of that money, around $237 million, will be placed in a third-party fund to be administered to drivers.

The settlement must still be approved by the court.

The eligibility and compensation for drivers will be determined based on the hours and total miles driven between April 2016 and December 2020.

Data from Lyft’s yearly Economic Impact Reports show that immigrants and communities of color carry the bulk of driver demographics year after year.

In 2025, 80% of L.A. Lyft drivers were members of a community of color and more than two-thirds of its drivers spoke Spanish at home.

Nearly half of all the Lyft drivers in L.A. last year (47%) were Latino.

Once the court approves the settlement and payments start being made, eligible drivers will be notified through the third-party administrator when it is time for them to submit their information for restitution. The Attorney General’s office said it will provide additional details about the settlement process in the future.

“When companies misclassify their workers, they deny them critical protections and shift the burden onto taxpayers,” Los Angeles City Attorney Hydee Feldstein Soto said in a statement. “This historic settlement sends a clear message: companies must follow the law, pay their fair share and play by the rules.”

Although Lyft has agreed to pay the settlement to end litigation, the company still denies any wrongdoing.

Lyft told CALÓ News that if approved, the settlement “closes a chapter from a very different time.” 

The lawsuit was brought in May 2020, but later that same year, the company threw millions behind Prop 22, which voters passed to officially categorize the state’s rideshare and delivery drivers as independent contractors. 

"Lyft believes drivers have always been properly classified under the law, and we're glad to put this case behind us,” the company wrote in the statement. “We remain laser focused on helping create more earnings for drivers and more affordable rides for riders."

During the years targeted in the lawsuit, Lyft reported a total revenue of $9.5 billion. The average Lyft driver makes anywhere between $11 and $18 an hour after factoring in expenses, according to data compiled by ShiftTracker.