Lyft, drivers settle labor lawsuit with $12.25M payment, new work agreement

(credit: Lyft)

California drivers who sued Lyft in 2013 over whether they should be treated as employees or contractors have settled their closely watched lawsuit, court documents show.

According to a Tuesday proposed settlement, which is likely to be finalized by the San Francisco federal judge overseeing the case next, Lyft will pay $12.25 million and will re-word its labor agreement with its workers, making it harder for the company to fire drivers at any time. The plaintiffs’ lawyers will take 30 percent of that amount; the remainder will be divided among California-based drivers and go toward covering court fees. The changes to the terms of service will be applied nationwide.

The settlement in Cotter v. Lyft has no immediate legal impact on other cases brought by the same plaintiffs' lawyer, Shannon Liss-Riordan, who has introduced a slew of similar labor suits against GrubHub, DoorDash, Caviar, and Uber.

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