Judge OKs Lyft deal
Proposed $27M settlement improves earlier offer; drivers still independent contractors
Lyft can go ahead with a deal that allows it to avoid trial over its drivers’ status as independent contractors, a federal judge in San Francisco has ruled.
Sparing Lyft from overhauling its entire business model, the judge greenlighted a $27 million deal that doesn’t require the ride-hailing app to give its drivers employee benefits. The order moves the deal one step closer to final approval.
The ruling Thursday comes more than two months after U.S. District Judge Vince Chhabria rejected Lyft’s initial proposed settlement of $12.25 million, saying the amount was too low. The new deal, more than double the previous amount, is more fair to drivers, Chhabria found.
“The new proposed settlement agreement fixes the monetary flaws the court previously
identified and enhances the non-monetary benefits at least to some degree,” he wrote.
Lyft praised the order in an emailed statement.
“We are pleased the court has granted preliminary approval of the settlement, which maintains the classification of drivers as independent contractors and brings us one step closer to a final resolution,” a company representative wrote. “This settlement will preserve the flexibility of drivers to choose when, where and for how long they drive on the platform, and enable consumers to continue benefiting from convenient and affordable transportation.”
If the deal makes it all the way through the court’s approval process, which requires a final approval hearing, most drivers would cash out with an average of $131 each. But those who drove more hours — about 700 hours from 2012 through the date the settlement is approved — would get an average of $2,000.
The deal also includes a provision that would prevent Lyft from kicking drivers off the app at will, and would allow drivers an opportunity to correct problem behavior before being booted.
Meanwhile, another judge in the same courthouse is considering whether to approve a similar $84 million settlement that lets Uber off the hook over the independent contractor issue.
Tempers flared during a hearing on the deal earlier this month, and the company is awaiting the judge’s ruling.