Lyft agrees to pay California $272.5m in largest-ever wage theft settlement

California’s attorney general, Rob Bonta, announced on Thursday that rideshare giant Lyft has agreed to pay $272.5 million in the largest wage theft settlement in the state’s history. The agreement came after years of claims that Lyft had unlawfully mislabeled its drivers as independent contractors instead of employees. This dispute has been ongoing for over a decade, with California first bringing a lawsuit against Lyft in 2020.

The settlement, under court approval, aims to distribute over $237 million to thousands of Lyft drivers who were affected. Bonta called this a "landmark win for workers" and emphasized that rideshare companies like Lyft have prospered due to the efforts of their drivers, who were being unfairly shortchanged. Despite Lyft's statement that drivers were always properly classified, the company admitted to putting this case behind them.

The debate over driver classification has been a contentious issue in California, with additional lawsuits joined by Los Angeles, San Francisco, and San Diego cities. After Lyft's initial push through Proposition 22, which passed in November 2020, it joined Uber in defending against the state's case. California's labor commissioner, Lilia García-Brower, highlighted the importance of drivers speaking out, stating that their voices were central in achieving this settlement. Another lawsuit against Uber is still ongoing.