The bullet that Lyft just dodged is still coming for Uber

Despite the settlement money and the additional benefits, the drivers are still at a loss because they will continue to work as independent contractors, which means that they will not be eligible for all the typical employee benefits such as minimum wage, overtime wage, and reimbursement for expenses.

In exchange, drivers will drop their claims and will agree to be classified under state law as contract workers rather than employees of the company.

Shannon Liss-Riordan, who represents the Lyft drivers in the case (and is also representing the Uber drivers challenging Uber in its case in California), said in a statement that the settlement “will result in some significant changes that will benefit the drivers”.

While they’ll remain independent contractors, under the settlement, Lyft drivers will gain some new benefits.

Lyft will replace the provision of its TOS that allows Lyft to deactivate drivers’ accounts for any reason with language that permits Lyft to deactivate drivers’ accounts for specific reasons which will be outlined in the new TOS.

U.S. District Judge Edward Chen in San Francisco said on December 22 he won’t issue a final judgment affecting most drivers in the case following a trial if the challenge to his order hasn’t been resolved on appeal.

Like rival Uber, Lyft aims to offer lower-priced rides than taxicabs, but to get there, drivers have to provide their own cars, insurance and pay for gas.

No such clause has complicated a similar lawsuit against Uber, Lyft’s largest competitor, also brought by Liss-Riordan.

The Boston-based attorney Liss-Riordan has become well-known for her crusade to reclassify contract workers in the on-demand economy as employees.

Liss-Riordan has hinted that she will work to prove qualitative differences between the two companies when it comes to treatment of workers. Lyft also agreed to pay fees and costs for future arbitration claims. The suit estimates there are more than 100,000 drivers in California who have given at least one Lyft ride.

Lyft did not immediately respond to a request for comment. “In the litigation we are pursuing against Uber, we hear daily complaints from drivers about how they feel Uber has mistreated them (in addition to the misclassification) – in cutting fares without their input, shortchanging them on pay they are owed, and deactivating them for no reason or no legitimate reason”. Those who are logging 30 hours or more per week for 50% of the weeks they have worked with the service will receive higher amounts.

Lyft general counsel Kristin Sverchek said the company is pleased to resolve the lawsuit on terms that “preserve the flexibility of drivers to control when, where, and for how long they drive on the platform”. Plaintiffs filed a motion for preliminary approval with the court that seeks approval of a settlement agreement between plaintiffs and Lyft.