Lyft to pay $272.5 million settlement in driver misclassification lawsuit

San Francisco, CA (October 1, 2026) — San Francisco City Attorney David Chiu today – alongside California Attorney General Rob Bonta and the City Attorneys of San Diego and Los Angeles – announced a $272.5 million settlement with rideshare company Lyft, resolving allegations that between 2016 and 2020, Lyft committed wage theft by misclassifying drivers as independent contractors rather than employees.  

The settlement, subject to court approval, resolves claims against Lyft for misclassifying their drivers as independent contractors in violation of the California Labor Code and Unfair Competition Law.  

“Every worker deserves to be paid fully and fairly,” said San Francisco City Attorney David Chiu. “For years, Lyft drivers provided essential services keeping our communities moving while being denied the wages and benefits they earned. Misclassification exploits workers, fuels inequality, and creates an unfair economy. This is the largest wage and hour settlement in California history, reflecting both the seriousness of the harm and our unwavering commitment to stand up for workers across California.”

“We are proud to announce this landmark win for workers, the largest misclassification settlement in California’s history,” said Attorney General Bonta. “Rideshare companies like Lyft have enjoyed massive growth and profits on the backs of drivers over the past decade, many who are from immigrant communities and communities of color. Lyft’s success would not be possible without the drivers who Lyft sought to unfairly short-change. Hard-working employees deserve full compensation for their labor. We have not and will not stand by when companies attempt to shirk their legal responsibilities and deprive employees of their wages and benefits as required under California law. Subject to court approval, today's settlement will put money back in the pockets of thousands of drivers who have waited for their long-deserved pay. We will continue to fight to empower workers, combat unfair and deceptive practices, and ensure all Californians can thrive from the fruits of their labor.”

"This is what's possible when state and local prosecutors stand together for workers," said San Diego City Attorney Heather Ferbert. "I'm grateful to Attorney General Bonta and our partners for years of persistence through every step of this complex lawsuit. For San Diego, that persistence means millions of dollars going back to drivers, many of whom were working to support their families. Lyft coming to the table is an important step, but it doesn't close the book on misclassification in the gig economy. There is still a lot at stake for drivers, and my Office will keep fighting until every worker gets what they've earned."

“Los Angeles and our statewide partners will not allow businesses to exploit their workers and evade their obligations under the law,” said Hydee Feldstein Soto, Los Angeles City Attorney. “When companies misclassify their workers, they deny them critical protections and shift the burden onto taxpayers. This historic settlement sends a clear message: companies must follow the law, pay their fair share and play by the rules.”

In 2020, the City Attorneys and Attorney General brought a lawsuit on behalf of the People of the State of California, alleging that Lyft’s misclassification of drivers deprived workers of critical workplace protections such as the right to minimum wage, overtime, and reimbursements for work-related expenses between 2016 and 2020.  

The lawsuit followed the introduction of the “ABC test,” the groundbreaking legal test used to analyze the misclassification of workers, which was first adopted by the California Supreme Court in 2018 in Dynamex Operations West, Inc. v. Superior Court and codified into law under Assembly Bill 5. In the midst of litigation, Proposition 22 changed how the ABC test is applied to certain app-based drivers. Despite several appeals and changes in law, the People remained resilient, winning every challenge in court and remaining steadfast in their demands for drivers’ deserved wages and protections. 

Under the settlement, Lyft must pay $272,500,000 in restitution and penalties, at least $237,075,000 of which, or 87 percent, will be reserved for drivers who worked for Lyft. The total settlement amount could increase if Lyft opts to make future settlement fund payments on an installment plan, where it will be required to pay interest. The restitution amount will be set into a fund managed by a third-party settlement administrator. Driver eligibility and compensation will be based on the number of hours and miles driven between April 5, 2016, through December 15, 2020. 

After the settlement is approved and Lyft begins making payments to the settlement fund, eligible workers will be contacted by the third-party settlement administrator about when to expect a payment. The settlement administrator will establish a website, email address, and call center to inform and answer questions from drivers who believe they are eligible for restitution. Additional details about these resources will be available in the near future. 

The City Attorneys and Attorney General worked alongside the California Labor Commissioner's Office and a group of private plaintiffs represented by Outten & Golden LLP, Olivier & Schreiber PC, and Lichten & Liss-Riordan PC to achieve today’s settlement. 

Over the last six years, led by Deputy City Attorneys Molly Alarcon and Matthew Goldberg, San Francisco City Attorney’s Office employees worked to achieve this result to ensure Lyft drivers were paid fairly for the work they completed.  

The People will continue litigating this matter against Uber, the remaining Defendant in the case. The case is Uber Technologies Wage and Hour Cases, San Francisco Superior Court, Case No. CJC-21-005179.