Lyft, drivers trumpet $27 million settlement

Lyft Inc. and lawyers for drivers of the ride-booking service Wednesday proposed a $27 million settlement of a federal lawsuit filed in San Francisco by drivers.

The proposed settlement was announced by both sides and submitted to U.S. District Judge Vince Chhabria, who must approve the pact and is due to consider it at a June 2 hearing.

Last month, Chhabria rejected a previously proposed $12.25 million settlement on the ground it gave too little to drivers.

The settlement money would be divided among the more than 163,000 California drivers who are linked with passengers through San Francisco-based Lyft’s mobile app. The amount each driver will receive will depend on the amount of time the driver worked.

Lyft drivers would continue to be classified as independent contractors rather than employees at least for the time being.

The settlement document says that Lyft denies that the drivers are employees.

Shannon Liss-Riordan, a lawyer for the drivers, said:

“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.”

Liss-Riordan said the settlement “will get money in the pockets of the drivers now (rather than perhaps years down the road in the future, if ever” if the case had gone to trial and appeals.

The attorney said the revised financial amount accounts for the fact that the number of Lyft drivers nearly doubled between the time Lyft provided initial figures and the time the previous proposal was presented to Chhabria.

The settlement also includes a revised deactivation policy under which Lyft can deactivate drivers only for specific, delineated reasons instead of being able to terminate them at will.

Lyft General Counsel Kristin Sverchek said in a statement:

“In light of Lyft’s continued growth, we agreed to update the resolution in a way that both increased monies paid to drivers and helped preserve their flexibility to control when, where and for how long they drive on the platform.”

A similar proposed settlement with Uber Technologies Inc., also based in San Francisco, would give Uber drivers in California and Massachusetts more than $100 million and would likewise leave them classified as independent contractors.

The Uber settlement is also scheduled to be considered for preliminary approval in federal court in San Francisco on June 2, but by a different judge, U.S. District Judge Edward Chen.