Lyft and drivers must wait for final hearing to see if $27 million is enough

By Bruce Brown May 14, 2016

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More than doubling its previous $12.5 million settlement offer, Lyft put $27 million on the table and this time the drivers accepted, according to Reuters. Drivers for Lyft will still remain independent contractors.

Both Lyft and Uber made initial settlement offers in the lawsuits regarding driver status. The drivers for each company are suing to be considered employees, while the companies want them to remain contractors. In Uber’s case, the initial settlement offer was $100 million. The courts didn’t accept either offer and asked for more data. It turned out the settlement offers were only 9 percent in Lyft’s case and 12 percent for Uber of what the drivers would have received in mileage reimbursement if they were employees. The Uber offer will be reviewed in June, but Lyft and its drivers now have a deal.

When he rejected the initial Lyft offer, U.S. District Judge Vince Chhabria said it “short-changed” the drivers. The $27 million offer, which was accepted, is 17 percent of the comparable reimbursement amount (had the drivers been employees) and was a negotiation target.

The same attorney, Shannon Liss-Riordan, is representing the drivers in both the Lyft and Uber cases. Liss-Riordan said that the Lyft settlement is good for the drivers because it puts money in their pockets right off. If the case had gone to trial, there was no way to be sure what the drivers might have gotten … it could have been nothing. “We are proud to have reached this new agreement, which will provide significant payments to Lyft drivers who have put a lot of their time into this company,” Liss-Riordan said.

Kristin Sverchek, Lyft’s general counsel, said the new offer reflects more current company revenues than the original offer, which was based on previous year numbers.

The Lyft settlement still has to get through a hearing in June before it’s finalized. With the company, the drivers, and the judge so far in agreement the deal could be pretty much locked down unless one of the parties decides to reconsider.

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Digital Trends Contributing Editor Bruce Brown is a member of the Smart Homes and Commerce teams. Bruce uses smart devices…

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