Lyft, the ride-hailing service, has settled a major lawsuit with its driver class-action suit. The company agreed to pay a record-breaking $272.5 million to the drivers who claimed they were misclassified as independent contractors instead of employees. This settlement comes more than five years after the first lawsuit was filed in 2017.
The lawsuit alleged that Lyft and Uber, which were also involved in the ride-hailing market at the time, mislabeled drivers as independent contractors, denying them benefits such as access to health insurance and workers' compensation. The class-action suit claimed that drivers were classified as contractors for years despite being paid wages similar to those of employees.
The settlement provides significant relief to the drivers who brought the lawsuit, although some have criticized Lyft's decision not to immediately classify all drivers as employees. Despite this, the company has stated that it will implement changes to its classification system and provide benefits to its drivers. The settlement marks a major victory for drivers in the gig economy, which is expected to continue growing in popularity.