GoKawiilLyft to pay $272.5M settling California driver misclassification suit
California's attorney general and city attorneys from three cities announced Lyft will pay $272.5 million to settle claims it misclassified drivers as independent contractors instead of employees between 2016 and 2020. The lawsuit originated in May 2020 when then-Attorney General Xavier Becerra sued both Lyft and Uber under Assembly Bill 5; the case against Uber continues separately.
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Attorney General Rob Bonta called it the largest misclassification settlement in state history, which could set a benchmark for future enforcement against gig-economy companies. The ongoing Uber case suggests regulators intend to keep testing how AB5's employee classification test applies across the ridehailing industry, with potential cost implications for companies that rely on contractor labor models.
- Lyft agreed to pay $272.5 million over driver misclassification claims spanning 2016-2020
- The lawsuit was filed in 2020 by then-AG Xavier Becerra under California's AB5 law
- Uber faces a separate, still-active lawsuit over similar allegations
Source: arstechnica.com, 2026-10-02
Published there as: “Lyft settles landmark driver misclassification lawsuit for $272.5M”
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