Lyft Settles Employee Lawsuit

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In 2013, California drivers sued Lyft over whether they had the right to be treated as employees (and have expenses paid) or whether they were simply contractors. The case generated a lot of media attention and has now been resolved, with a proposed settlement of $12.25 million and a rewrite of the company’s labor agreement with workers.



The lawyer – Shannon Liss-Riordan – who fought for the drivers on this case has also brought cases against Uber, GrubHub, Caviar and DoorDash. However, the Lyft settlement has no immediate impact upon these other cases legally.

Though this case has come to a close, many questions are left unanswered. The basis of the trial, which was to determine whether the drivers are employees or contractors, remains unknown. At this stage, they are treated as contractors, with no rightful reimbursement for costs or employee benefits.

The unanswered questions surrounding this trial leads to uncertainty for other start-up companies utilizing a similar system of labor. No legal precedent has been set, according to the labor law professor at the University of Illinois, Michael LeRoy. “The bigger issue is that these claims will not be fought in a public court, where precedents can be set… It hides future problems and shortchanges the public from rulings that have broader applicability. That may be the worst feature of this settlement.”

Liss-Riordan, however, has confidence when it comes to one of the most watched related cases in this field: the case against Uber. Her resolve is boosted by the fact that while Lyst received relatively few complaints from drivers, Uber has received many more which indicate that its drivers are not being treated fairly. The O’Connor vs Uber Trial will play out in a San Francisco federal court in mid-2016.