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Settlement Reached in Lyft Class Action

The Los Angeles Times recently reported that U.S. District Judge Vince Chhabria in San Francisco has hammered out a settlement between the Lyft ridesharing company and 95,000 drivers who worked between May 25, 2012, and July 1, 2016, in California. The drivers had filed a class action lawsuit demanding that they be treated as employees of Lyft for the purpose of qualifying for benefits. Ride-sharing companies like Lyft treat their drivers as contractors, which makes benefits like health care insurance and paid vacation unavailable to them.

The settlement will not resolve the issue as to whether rideshare drivers should be employees or contractors. The question is considered too complex to be decided in the courts at the current time. The plaintiffs also made the judgment that the outcome of a trial would have been too uncertain to take the risk.

Instead, Lyft has agreed to pay the drivers in the class from a fund of $27 million, with the longest-serving contractors getting the most money. Also, the ride-sharing company agrees to warn its drivers before it cuts them off from the app for violations of terms of service. Lyftalso decided to allow a third party arbitrator to decide questions concerning pay when they arise.

Ride-sharing services have upended how many people who lack private automobiles get from place to place, providing an alternative to expensive taxis and often inconvenient mass-transit systems. Drivers for such companies are often part-timers, supplementing income from a full-time job or else making money when they are between jobs.

UberLyft’s main rival in the ride-sharing business, is also involved in a class action involving the question of whether drivers should beemployees or contractors.

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