Lyft Ups Settlement With Calif. Drivers to $27M

     SAN FRANCISCO (CN) — Lyft has agreed to pay $27 million to settle a class action filed by California drivers, after a federal judge rejected a proposed $12.5 million settlement.
     The 2013 suit claims that Lyft drivers in California should be classified as employees rather than independent contractors, and that the misclassification allows Lyft to avoid paying employment benefits and reimbursement for gas and vehicle maintenance.
     Lyft agreed to settle the lawsuit in January, and settlement 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.
     Kristin Sverchek, Lyft’s general counsel, said in a statement about the revised settlement amount that “in light of Lyft’s growth, we agreed to update the resolution in a way that both increased monies paid to drivers and helped preserve their flexibility to control when, where and for how long they drive on the platform.”
     Under the new $27 million settlement, the plaintiff drivers will receive more than double what they would have under the initial deal, the drivers’ attorney Shannon Liss-Riordan said in a statement.
     “We are proud to have reached this new agreement, which will provide significant payments to Lyft drivers who have put a lot of their time into this company,” Liss-Riordan said.
     Although the settlement does not give the drivers employee status, Liss-Riordan said that the agreement “provides a fair resolution of the case, will get money into the pockets of drivers now and will provide them greater job security.”
     A hearing on the revised settlement is scheduled for June.

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