Lyft, Inc. (NASDAQ:LYFT) reached a $272.5 million settlement agreement on September 30 to resolve allegations that it misclassified drivers in California as independent contractors.
The settlement covers allegations relating to the period from April 5, 2016, through December 15, 2020. It was reached with the State of California, represented by the California Attorney General and the City Attorneys of San Francisco, Los Angeles and San Diego, as well as the California Labor Commissioner and two private plaintiffs acting under the Private Attorneys General Act.
The agreement remains subject to approval by the Superior Court of California, County of San Francisco. The settlement does not constitute an admission of fact or liability by Lyft.
Payments Can Be Spread Over Four Years
The $272.5 million settlement amount includes attorneys’ fees, costs and expenses.
Under the agreement, Lyft may make the payments over four years. Simple interest of 5% will accrue after the first year, with total interest capped at $12.4 million.
The agreement does not include prepayment penalties or prospective operational commitments.
Lyft recorded a $210 million accrual related to the matter during the fourth quarter of 2025. The charge was recognised through a combination of reduced revenue and general and administrative expenses.
The settlement amounts are excluded from Lyft’s Adjusted EBITDA calculations.
Lyft Maintains Third-Quarter Guidance
Lyft said its guidance for third-quarter 2026 Gross Bookings, Adjusted EBITDA and Adjusted EBITDA margin remains unchanged from the figures provided on August 6.
The company expects to report its third-quarter 2026 financial results in November.
Lyft stock price
