In what has finally resulted into the end of a long-drawn, class-action lawsuit against Lyft by its drivers, a US Judge gave final approval on Thursday to a settlement worth $27Mn, in favour of the drivers. The same lawsuit had earlier seen a $12.25 Mn settlement being rejected by the Judge, on terms that it “short-changed” drivers.
The suit, despite forcing Lyft to pay millions to its driver partners, might actually bring some relief to the company. The lawsuit has been underway since 2013, and had kept Lyft on its toes as the company’s independent contractor status was under serious threat. The settlement agreement keeps drivers as independent contractors.
Attorney Shannon Liss-Riordan, who represents the Lyft drivers, said on Thursday she was “very pleased to be at the end of this process.”
However, Judge Chhabria cautioned during the proceedings, saying,
The agreement is not perfect. And the status of Lyft drivers under California law remains uncertain going forward.
To give you a brief background about the class-action lawsuit, the suit was filed back in 2013, by a group of Lyft drivers, demanding that they should be classified as employees and therefore be entitled to reimbursement for expenses, including gasoline and vehicle maintenance. Drivers at both Uber and Lyft, pay those costs by themselves.
With this settlement, drivers who had traversed longer miles on the app platform, will receive thousands of dollars in settlement. Most others will however, get a very nominal amount. Lyft, as of now, has close to 700,000 drivers in the US.
Uber, the global leader in app-based cab aggregation domain is also facing a similar, class-action lawsuit. To Uber’s dismay though, a recent $100Mn settlement offer by the company was rejected by a federal judge. Uber has close to 1.5 Million drivers globally, and a group of 385,000 of them have been clamouring for classification as employees, stating that they were entitled to expenses.
US District Court Judge Edward Chen for the Northern District of California, deemed the Uber settlement as both inadequate and unreasonable.