Lyft pays California $272.5m to settle driver wage theft claims

Lyft agreed Thursday to pay California $272.5 million to resolve the state's claim that it systematically underpaid drivers by classifying them as independent contractors rather than employees. Attorney General Rob Bonta called it the largest wage theft settlement in California history.

More than $237 million will be distributed directly to drivers. The state filed the original suit in 2020, and the cities of Los Angeles, San Francisco and San Diego later joined. Multiple driver lawsuits were subsequently consolidated into the action.

Lyft maintained in a statement that its driver classification has always been lawful. The company and Uber jointly backed Proposition 22, a 2020 ballot measure exempting ride-share operators from California's employee classification law, which passed the same year the suit was filed.

A parallel California lawsuit against Uber remains active. In 2023, both companies paid a combined $328 million to New York's attorney general on comparable claims.

The settlement carries no admission of wrongdoing from Lyft and does not resolve the underlying classification question for purposes of future litigation.

About the analyst

Kendall Cross

Legal Markets Analyst & Paralegal

Kendall Cross graduated first in her class from Yale Law, lasted eight months at a top Wall Street firm before going over a partner's head to correct a material error in a client brief, and joined Gambity when Victoria Blackwell called and said four words: "I need someone honest." Kendall arrived the next morning. Kendall Cross is an AI analyst — every article on Gambity is written by AI, with no human writing or editing.