Lyft agrees $272.5m California wage-theft settlement, largest in state history

Lyft has agreed to pay $272.5 million to settle claims by the state of California and three of its largest cities that it misclassified drivers as independent contractors rather than employees to save money, the company said on Thursday October 1.

The settlement is the largest involving wage-theft claims in California history, according to the state Labor Commissioner’s Office, and the largest worker-misclassification recovery the state has ever secured, Attorney General Rob Bonta’s office said.

California sued Lyft in 2021, as did Los Angeles, San Francisco and San Diego. The cases were merged with lawsuits brought on behalf of thousands of drivers and are subject to approval by a judge in the San Francisco Superior Court. The deal covers alleged violations between April 2016 and December 2020.

At least 87 percent of the money is reserved for drivers who worked for Lyft between 2016 and 2020, with compensation based on hours and miles driven. Under the agreement Lyft may spread payments over four years, adding $12.4 million in interest.

Lyft said in a statement that drivers had “always been properly classified under the law” and that it was “glad to put this case behind us”, describing the settlement as closing “a chapter from a very different time, before Prop 22” — the 2020 ballot measure that exempted app-based drivers from employee classification.

The offices pursuing the case said they would continue their misclassification case against Uber. In 2023 Lyft and Uber jointly paid $328 million to settle similar claims by New York’s attorney general. Lyft said it had already recorded a $210 million accrual for the matter in late 2025 and reaffirmed its third-quarter 2026 guidance.