The Lyft settlement offered by the company’s and the plaintiffs’ attorneys was rejected by Judge Chhabria in San Francisco. Lyft Inc. will have to pay more money to its drivers if it does not want the case to be heard at trial. The class action claims that Lyft drivers must not be considered as freelancers but as employees. As we all know, employees of a certain company have got more rights and privileges as compared with independent contractors.
The settlement that was rejected by the judge suggested that drivers be considered as freelancers and be paid $12.25 million as mileage reimbursement. An additional clause offered that drivers should not be fired at will by the company. According to the primary estimation of plaintiffs’ lawyers, the sum for reimbursement should have been $64 million. However, Judge V. Chhabria made their own calculations based on the methodology used by drivers and it turned out that the reimbursement should be worth over $126 million.
Not only was the judge not content with the deal but also some drivers who wanted to get the status of employees. This status would provide them with lots of benefits including a remedy for driving costs, pay per hour etc.
Now, the judge has given the two sides of the conflict a chance to suggest a higher amount of reimbursement without the need to reclassify the drivers as employees. The concern regarding the rights of independent contractors, especially freelance drivers has been in the middle of public attention for the last few months. Uber, another ride-hailing company, has to undergo a similar issue with its drivers. Uber drivers and their lawyers are also waiting for a court decision regarding the class action lawsuit. We will learn more about Lyft class action at the end of May and about Uber’s at the end of June 2016.