In January, Lyft agreed to settle a class-action lawsuit by its drivers by paying $12 million and making some concessions to drivers’ job security, in exchange for not having to face a trial that might result in its drivers being reclassified as employees rather than independent contractors—a change that could prove fatal to the ride-share platform’s business model. On Thursday, a federal judge rejected the settlement, saying the payout was much less than the drivers deserved, Davey Alba reports at Wired:
US District Judge Vince Chhabria ruled today that the agreement, which would have extended additional benefits to drivers as well as monetary compensation, shortchanged Lyft drivers by as much as half of what they deserve. The settlement agreement “does not fall within the range of reasonableness,” Chhabria wrote. The judge asked the attorneys of both parties to come to a new agreement by May.
“We are disappointed in the preliminary ruling,” a Lyft spokesperson said in an emailed statement to WIRED. “We believe we reached a fair agreement and are currently evaluating our next steps.” …
“We are hopeful this settlement can be improved to meet the judge’s concerns,” says Shannon Liss-Riordan, the Boston lawyer representing the Lyft drivers in the suit. “If not, we look forward to taking this case to trial as well.”
Liss-Riordan is also representing Uber drivers in a separate lawsuit scheduled to go to trial in June, in which the drivers seek to be reclassified as employees. When the settlement was first agreed, she indicated that Lyft was “treating its drivers with more respect than Uber,” which influenced their willingness to settle the case and not pursue reclassification. Also, Lyft’s driver contracts includes an arbitration clause that protects the company against class actions; it is not clear what that means for how the suit will proceed if Lyft and the drivers are unable to reach a new agreement.
Not all Lyft drivers were happy with the settlement: Last month, the Teamsters union joined five of the drivers in objecting to it, arguing that it shortchanged drivers and kept intact a business model that they consider exploitative. Naturally, Alba adds, the Teamsters were happy to find that Judge Chhabria agreed:
“We are pleased with today’s ruling,” says Rome Aloise, Teamsters International Vice President. “We are hopeful that Lyft drivers will get more of the money that they deserve thanks to our objections in this case, and we proudly continue to stand with Lyft workers who have been misclassified and are seeking justice.”