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The Bullet That Lyft Just Dodged Is Still Coming for Uber

Lyft won't have to reclassify its drivers as employees, but Uber still might.


Lyft will not have to reclassify its drivers as employees after reaching a settlement yesterday, in which it agreed to pay $12.25 million extra in compensation and benefits. Uber is facing a similar lawsuit from its drivers, but a quirk in the litigation could make the outcome way worse for the world’s biggest ride-hail company.

In challenging their status as independent contractors, Lyft’s drivers were unable to bring a class action lawsuit against the app company thanks to an arbitration clause contained in their contract with Lyft. As such, the drivers had to settle for promises from Lyft to reimburse some of their expenses and to warn them before they were about to be deactivated for poor customer ratings.

The drivers weren’t able to achieve “global changes” at Lyft, but those changes are still possible at Uber, explained Shannon Liss-Riordan, the attorney representing both Lyft drivers and Uber drivers in their respective cases.

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