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Lyft settlement more than doubles to $27 million

May 12, 2016

Lyft will pay $27 million in a newly proposed settlement — more than twice as much as a previous settlement rejected by the court — to end an independent contractor compliance case brought by California drivers, according to court filings.

Drivers would remain independent contractors — as in the original settlement proposed. However, the new settlement will not cover claims made after it receives preliminary approval, and “nothing about the settlement agreement prohibits future challenges to Lyft’s classification system.”

Judge Vince Chhabria rejected the initial settlement last month. One concern was the amount in the initial settlement proposal was too low; it called for Lyft to pay $12.25 million.

Chhabria also raised concerns about the amount assigned under the original settlement under the California Private Attorney General Act. That amount has been raised to $1 million in the new settlement.

However, the new settlement still contains other provisions to benefit drivers, such as Lyft will only be able to terminated drivers for specific reasons and drivers will have a process to appeal the decision.

The court must still approve the new settlement.

Last month, Uber also agreed to settle a lawsuit involving drivers in California and Massachusetts who claimed misclassification as independent contractors. That settlement calls for Uber to pay $100 million.

Lyft drivers are being represented by attorney Shannon Liss-Riordan, the same attorney representing the Uber drivers.