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Judge rejects Lyft independent contractor settlement

April 11, 2016

A federal judge last week rejected the proposed $12.25 million settlement in the Lyft case where drivers claim they were misclassified as independent contractors, according to court records.

Lawyers for the plaintiffs and Lyft agreed on the settlement in January. Lyft would pay $12.25 million. Drivers would remain independent contractors, but the settlement would have provided them with additional rights. For example, Lyft would no longer have been able to fire drivers at will.

However, that settlement is not reasonable, Judge Vince Chhabria wrote in his denial last Thursday.

“Most glaringly, counsel for the plaintiffs pegged the $12.25 million settlement figure primarily to the estimated value of the drivers’ claim for mileage reimbursement,” he wrote. “But the lawyers estimated the value of the reimbursement claim to be $64 million, when in fact, using their own methodology, it is worth more than $126 million. The drivers were therefore shortchanged by half on their reimbursement claim alone.”

Still, Chhabria wrote he would entertain preliminary approval of another possible settlement — should parties agree to one — even if it fell short of requiring Lyft to classify drivers as employees.

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