Lyft settles California driver misclassification case for $272.5 million
The payment, covering 2016 to 2020, can be spread over four years and comes after Lyft already set aside $210 million for it late last year
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Lyft has agreed to pay $272.5 million to settle claims that it misclassified drivers in California as independent contractors rather than employees. The settlement resolves claims brought by the State of California, the Labor Commissioner and private plaintiffs covering the period from April 5, 2016 to December 15, 2020.
The total includes attorneys' fees, costs and expenses. Lyft can pay it over four years, with 5% simple interest applying after the first year, capped at $12.4 million.
Lyft set aside $210 million for the matter in the fourth quarter of 2025, and says the settlement does not change its guidance for third quarter 2026 Gross Bookings, Adjusted EBITDA or Adjusted EBITDA margin.
The case dates back nearly a decade, to a fight over driver classification in California that helped shape the 2020 Proposition 22 ballot campaign and has sat on Lyft's balance sheet as an unresolved liability ever since. Because most of the cost was already accrued, and the payments are spread out with interest capped, the settlement closes that overhang without forcing a lump sum or changing near-term operating numbers. It leaves open whether drivers in other states bring similar claims, since this agreement applies only to the California period between 2016 and 2020.