Lyft announced a $272.5 million settlement agreement to resolve allegations of driver misclassification in California. The agreement, subject to court approval, settles all claims that the company misclassified drivers as independent contractors between 2016 and 2020. This resolution allows the company to avoid protracted litigation and does not include an admission of liability.
Key Details
- Settlement Amount: Lyft will pay a total of $272.5 million to the State of California and other plaintiffs to resolve the claims.
- Covered Period: The agreement covers the period from April 5, 2016, through December 15, 2020.
- Payment Terms: The company has the option to make payments over four years, with 5% simple interest accruing after the first year.
- Financial Impact: Lyft previously recorded a $210 million accrual for this matter in Q4 2025 and confirmed that its Q3 2026 guidance remains unchanged.