Judge Approves New Settlement for Lyft Class

     SAN FRANCISCO (CN) – Lyft will pay $27 million to roughly 163,000 of its current and former California drivers under a new settlement agreement approved by a federal judge.
     In his Thursday ruling granting preliminary approval to the settlement, U.S. District Judge Vince Chhabria wrote that he had rejected an earlier proposed agreement for $12.5 million “primarily because plaintiffs’ counsel, during settlement negotiations, grossly underestimated the value of the drivers’ claim for reimbursement of expenses.”
     “This error resulted in a settlement amount that was unreasonably low considering the substantive strength of the plaintiffs’ claims and the value those claims would have if the plaintiffs ultimately got a judgment in their favor,” the judge wrote.
     But Chhabria said the new $27 million agreement “fixes the monetary flaws the court previously identified and enhances the nonmonetary benefits at least to some degree.”
     The lawsuit brought by lead plaintiff Patrick Cotter claimed Lyft inappropriately classifies drivers as independent contractors, allowing the company to skirt minimum wage and wage-statement laws.
     Lyft agreed to settle the lawsuit in January, and negotiations were based on Lyft-supplied data, including the company’s driver population through June 2015.
     That data supported an estimate of $64 million as the most that drivers could claim for expense reimbursement. But Lyft later provided updated driver population numbers through February 2016, which increased the potential expense reimbursement claim to $126 million.
     At a March hearing, U.S. District Judge Vince Chhabria said he did not understand why the case’s maximum recovery value should not be the higher figure.
     On Thursday, Chhabria also said he took issue with the low proposed payment of $12.5 million for the class, especially since 30 percent would end up going to their lawyers.
     But the new agreement, he noted, contained a provision that class attorneys would not seek any more fees than they pledged in the first agreement, meaning they would get only 14 percent of the $27 million.
     The parties have seven days to submit a revised proposal for notifying class members of the new deal.
     The drivers will remain independent contractors under the agreement, which may pose some difficulties for another group of drivers that have sued Lyft in the interim. In Zamora v. Lyft, drivers claim they were deprived of gratuities from August 2014 to the present, specifically due to a prime-time surcharge for rides during peak hours.
     Under the Cotter agreement, Lyft is cleared of all gratuity claims that depend on the contention that drivers are employees and not independent contractors, potentially letting Lyft off the hook for the gratuity claim in the Zamora case.
     The Zamora class has asked to intervene in the Cotter case.
     In his ruling, Chhabria said that dispute doesn’t prevent the Cotter settlement agreement from moving forward. He noted that the Zamora plaintiffs may still be able to go after Lyft for the withheld tips, provided their claims are not dependent on a finding that drivers are employees.
     In any case, the judge wrote, “Based on the evidence currently in the record, the new gratuity claims asserted by the Zamora plaintiffs do not seem very strong,” since Lyft didn’t explicitly describe its prime-time surcharge as a gratuity.

%d bloggers like this: