After over two years, Lyft's driver lawsuit has been settled by the ride-hailing company for a hefty $12.25 million. However, the hope for reclassification of Lyft drivers as employees was not achieved.
Lyft, a well-admired start-up ride company based in San Francisco has finally come into agreeable terms with its California drivers on Tuesday. The class-action lawsuit started in 2013 after drivers demanded to be classified as regular employees who deserve legal benefits from the company. They claimed that they don't like to be called as independent contractors. LA Times says that as part of the agreement in the Lyft's driver lawsuit, the company is bound to change its terms of service to conform with the California law governing independent contractors.
"We are pleased to have resolved this matter on terms that preserve the flexibility of drivers to control when, where and for how long they drive on the platform and enable consumers to continue benefiting from safe, affordable transportation," Kristin Sverchek, Lyft's general counsel, said in a news release.
Reuters reports that as part of Lyft's driver lawsuit settlement, the company will be informing the drivers in advance if they are to be deactivated in their post. The site adds that Lyft and its more successful competitor, Uber Taxi both faced lawsuits against their drivers. Apart from their demand to be classified as employees, they are also requesting the company to reimburse their gas and vehicle maintenance expenses. At present, Lyft and Uber drivers are shouldering these bills from their own pockets.
The Lyft's driver lawsuit agreement will "provide substantial benefits to drivers and distribute reimbursement for some of the expenses they have incurred while driving for Lyft," according to Shannon Liss-Riordan, the lawyer representing the drivers, The New York Times reported.
After reaching a settlement on Lyft's driver lawsuit, some of the driver's expenses could be refunded. However, they remain to be classified as independent contractors and not regular employees. This gives the company smaller labor cost as they don't have to pay the driver's taxes and will not be obligated for the payroll increase.
