Lyft recently wound up in hot water with its drivers, in a similar manner to what happened with Uber. Drivers felt that they were not being fairly reimbursed for what they spent to work for Lyft, with some drivers winding up losing money on slower days. Because of this, drivers in some areas banded together to demand fair compensation and, in some cases, reclassification as full-time employees rather than contractors. A class action lawsuit with Lyft drivers in California drove Lyft to choose to settle, offering its drivers in California a cool $12.25 million altogether. The deal was rejected by a judge however, as being too small to cover the expense reimbursement that drivers were entitled to. In light of that, Lyft made an offer to double that settlement and then some, by offering $27 million to conclude the case.
Between gas and vehicle maintenance from the large amount of additional driving that working for a service like Lyft entails, keeping a vehicle in fighting shape takes a significant chunk of change out of the average ridesharing worker’s paycheck. Since these workers are contractors and not full employees of the companies they drive for, there are limits to what compensation and privileges they are legally entitled to. Even so, a judge concluded that Lyft’s original offer only represented about 9-percent of what drivers had paid to drive for Lyft and was inadequate. This eventually led Lyft to present the $27 million figure, which has been agreed to by Lyft and lawyers representing the drivers in the class action lawsuit.
The new figure only represents about 17 percent of what Lyft would have to pay out if these drivers had opted to seek out full employee status. The current agreement sees drivers continue being classified as independent contractors, but should set a precedent for the future that will help them to more easily be reimbursed for at least part of what they pay out in expenses. Drivers that have been with the service for a while could get amounts in the thousands, but even drivers who are fairly new may see payouts in the $25 range, depending on how many days or weeks they’ve worked and the hours accumulated.