Lyft's $272.5 million California settlement stops at 2020, where Prop 22 begins

A driver who filed a wage claim with the state had to total the hours and miles driven and the expenses of keeping a car on the road ^[7]. Uber and Lyft drivers together filed about 5,400 such claims and put the combined amount owed at $1.3 billion ^[7]. That averages about $240,700 a claim ^[18], though the figure mixes both companies.

Nicole Moore, president of Rideshare Drivers United, is not sure how many drivers the Lyft settlement will cover. She estimates it could be 200,000 ^[22]. At that headcount, $272.5 million ^[2] comes to $1,362.50 a driver ^[23], assuming an even split with nothing deducted. Fast Company's account does not describe how the money will be divided.

The gap in total dollars is smaller than the gap per person. Moore says Lyft drivers' claims alone came to more than $434 million ^[8], so the settlement is at most about 63% of that total ^[19]. The same sum is spread across a possible 200,000 drivers ^[22], against a claim count of about 5,400 for both companies ^[7].

Moore's own figure is far higher. "Lyft really owes drivers $20 billion for those four years," she told Fast Company ^[20]. She also said, "It's a freaking absolute victory for drivers," while arguing the settlement should have come sooner and the amount should be far higher ^[15][21].

Lyft describes the same four years differently. Spokesperson George Flynn said in a statement that the settlement, if approved, "closes a chapter from a very different time, before Prop 22" ^[9]. He added, "Lyft believes drivers have always been properly classified under the law, and we're glad to put this case behind us." ^[10] Fast Company concluded that the settlement "compensates drivers for alleged past violations but does little to change the conditions under which they work today" ^[17].

The open route to changing those conditions is the June lawsuit against Uber, which argues the law should be invalidated and the stricter labor rules reinstated ^[11]. If it succeeded, drivers could seek compensation for wage theft and misclassification from 2020 forward ^[12]. "We have to weaken Prop 22 in order to be able to really compensate drivers fairly," Moore said ^[13].

In our view, an operator can sort any classification exposure on two axes: whether the period falls before or after the rule the company relies on, and whether the money is priced or still open. Lyft's 2016 to 2020 years are before the rule and, if the judge approves, priced ^[2]. Uber's years before the rule are open, with a court date later next year ^[14]. Years under Prop 22 cannot be claimed today ^[6], and they become open only if the June suit succeeds ^[12]. A company holding exposure in either open cell has a reason to settle early or to reserve, and a company in the priced cell has a number to point to.