Judge Rejects Proposed Settlement In Lyft Class Action

Image courtesy of Ben Schumin

To settle a class action filed by their drivers in California, ride-hailing service Lyft and the drivers’ attorney agreed to a settlement back in January. One flaw with the settlement was that it had been negotiated based on the company’s roster of drivers in June 2015, right before Lyft expanded significantly, including in California. The judge now won’t approve that figure, declaring it to be too low.

The idea of the settlement is to compensate drivers for at least a teeny portion of their vehicle expenses, and Judge Vince Chhabria ruled yesterday that the total settlement needs to be much higher to even approach doing that, estimating that the amount Lyft could really owe their drivers might be as high as $126 million.

“Shouldn’t you have estimated what the value would be through the entire class period?” the judge asked back in March, which may have been an early sign that he wasn’t going to approve the settlement.

The drivers’ attorney had originally set the compensation figure at $64 million, and the parties negotiated from there. The suit was originally filed with the goal of gaining employee status for drivers, which would bring with it minimum wage protections, overtime pay, and mileage reimbursement for their driving or compensation for their vehicle expenses.

The one non-financial benefit that drivers will gain from the suit is that Lyft has promised to no longer arbitrarily remove their access to the app (effectively firing them) without telling them why.

Judge Denies Lyft’s $12 Million Settlement With Drivers [Wall Street Journal]

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