Lyft Inc. (NASDAQ: LYFT) has agreed to a $272.5 million settlement over allegations it misclassified California drivers as independent contractors, state officials announced on October 1. The agreement remains subject to approval by San Francisco Superior Court.
The claims cover driving between April 5, 2016, and December 15, 2020. Officials alleged that the classification denied drivers minimum wages, overtime and reimbursement for work-related expenses. The settlement is not an admission of liability, according to Lyft’s disclosure.
At least $237.075 million will be reserved for eligible drivers, the attorney general’s office said. Individual compensation will depend on hours and miles driven during the covered period. A third-party administrator will contact eligible workers after approval and funding begins.
Lyft can elect to pay over four years, with 5% simple interest after the first year, capped at $12.4 million. The filing says the agreement includes no prospective operational commitments or prepayment penalties; it does not announce a change to the current driver model.
The company had already recorded a $210 million accrual for the matter in the fourth quarter of 2025 and reaffirmed its third-quarter 2026 gross-bookings and adjusted-profitability guidance. The settlement narrows a longstanding legal dispute, but approval and the timing of driver distributions remain outstanding.
