As Reuters reports, Lyft has agreed to a revised $27 million settlement in the California class-action lawsuit Cotter v. Lyft after a previous proposed $12.25 million settlement was rejected by Judge Vince Chhabria. Shannon Liss-Riordan and Matthew D. Carlson, the attorneys who brought the case on behalf of drivers, have provided OnLabor with the following statement regarding the revised settlement:
We are very pleased to announce a new settlement we have reached with Lyft to resolve the driver misclassification case. Under the revised settlement, Lyft will pay $27 million. The earlier estimates made for what drivers will receive will more than double. Under this settlement, drivers who worked substantial hours driving Lyft passengers will receive significant payments. Drivers who have worked far fewer hours will receive more modest payments.
There has been much talk about the average payouts from the Lyft settlement and the Uber settlement. For both companies, the data show that hundreds of thousands of people have driven for Uber or Lyft a very small number of hours (i.e. they tried it out and didn’t stick with it), and so those numbers drove down the average payments significantly. For both cases, the drivers who would be receiving around $25 on average from the settlements would have worked only a few days. The drivers who worked a more significant amount of time – months instead of days – would receive thousands of dollars. In the Uber settlement, drivers who worked more than about six months could receive more than $8,000 on average, while Lyft drivers who worked that much could receive more than $6,000.
The Lyft settlement was renegotiated after the judge in the case sent us back to the drawing board. We had initially negotiated an agreement based upon data that turned out to be very out of date by the time we were before the court seeking preliminary approval. The miles driven by Lyft drivers in California had roughly doubled between the time that Lyft initially provided us data and the date of the approval hearing, so we were not surprised by the court’s reaction.
We are proud to have reached this new agreement, which will provide significant payments to Lyft drivers who have put a lot of their time into this company. Once again, although the agreement does not resolve for the future the question of whether Lyft drivers should properly be classified as employees or independent contractors, we believe this agreement provides a fair resolution of this case, will get money into the pockets of drivers now (rather than perhaps years down the road, if ever), and will provide them greater job security (through the revised deactivation policy).
Matthew D. Carlson