The agreement announced Thursday resolves allegations that Lyft misclassified California drivers as independent contractors from 2016 to 2020. At least $237 million of the $272.5 million settlement is set to go directly to thousands of affected drivers, California Attorney General Rob Bonta said.
Bonta announced the settlement on X, writing that “we’ve secured a $272.5 million settlement with lyft that will put at least $237 million back in the pockets of thousands of misclassified lyft drivers,” according to Rob Bonta
Lyft’s filing with federal regulators describes the total as $272.5 million, inclusive of attorneys’ fees, costs and expenses, according to
Lyft 8-K filing
.
The filing says the agreement resolves claims brought by California officials and two private plaintiffs over alleged misclassification from April 5, 2016, through December 15, 2020. It also says the cases were consolidated with lawsuits filed on behalf of thousands of Lyft drivers.
Lyft Maintains Drivers Were Properly Classified
Lyft has not conceded fault. The company said its drivers have always been properly classified under the law and that it was glad to put the case behind it, per the same Reuters account published by Investing.com. The filing is explicit on this point too: it states the settlement agreement does not constitute evidence or an admission of fact or liability by the company.
Bonta called the deal the largest worker-misclassification settlement in California history. Reuters, citing the state Labor Commissioner’s Office, described it instead as the largest settlement involving wage-theft claims in California history.
Court Approval Still Pending
The settlement is not yet final. It remains subject to approval by the Superior Court of California, County of San Francisco, according to Lyft's filing. The filing also indicates Lyft may elect to spread its payments over four years, with 5% simple interest accruing after the first year and total interest capped at $12.4 million.
Bonta invited the public to watch a livestreamed discussion of the announcement at 9:15, saying he would be joined by San Francisco City Attorney David Chiu, San Diego City Attorney Ferbert, and Los Angeles Deputy City Attorney Crowell to walk through the settlement's implications for workers.
A Pattern Beyond California
California's fight with ride-hail companies over driver classification is not new, nor is it isolated to this state. Lyft and Uber jointly agreed in 2023 to pay $328 million to settle similar claims brought by New York's attorney general, the Investing.com report notes — a reminder that misclassification disputes have dogged the gig-economy giants across multiple state capitals.
How Proposition 22 Shapes Driver Protections
Proposition 22 established a conditional independent-contractor classification for app-based transportation and delivery drivers. The Supreme Court of California’s 2023–2024 court-year review says the court unanimously found that this classification does not conflict with the Legislature’s constitutional authority over workers’ compensation. Separately, the California Labor Commissioner’s Office says Proposition 22 provides a guarantee of 120% of the applicable minimum wage for “engaged time” and a health insurance stipend for drivers who exceed specified engaged-time amounts; the office says it lacks authority to enforce claims based on those rights. A separate Massachusetts agreement announced in 2024 involved both Uber and Lyft: The Associated Press reported that the companies agreed to pay a combined $175 million to resolve state wage-and-hour allegations, with a substantial majority going to current and former drivers, and to provide a $32.50 hourly minimum-pay standard. That deal included an ongoing pay standard, unlike the California settlement described above.
Bonta framed the settlement as part of a broader mission, saying officials will continue to empower workers, combat unfair and deceptive practices, and ensure Californians can thrive from the fruits of their labor. He has cast himself as the people's attorney for Californians, focused on standing up for residents and fighting what he describes as injustices. Workers who believe they have been misclassified can learn more about their employment status and report concerns through the California Department of Industrial Relations, which also directs groups of affected employees to its Bureau of Field Enforcement.
