Lyft reaches $12.25 million deal with drivers in employment battle
http://www.mercurynews.com/crime-courts/ci_29440428/lyft-reaches-12-25-million-deal-drivers-employment
Lyft may have agreed this week to pay $12.25 million to settle a lawsuit with California drivers who had been seeking the crucial right to be classified as employees, but the pact does not settle the central legal question raised in the case that hangs over the so-called sharing economy.
Under the terms of a deal outlined in court papers filed late Tuesday night, Lyft will not reclassify its drivers as employees, a move that would have required the San Francisco ride-hailing company to overhaul its business model to provide drivers with benefits such as minimum wage and reimbursement for driving expenses. The settlement terms call for Lyft's estimated 100,000 California drivers to continue to be classified as independent contractors, although with added job protections that were not previously in place.
As a result, the larger issues that hover over Silicon Valley companies in the sharing economy remain unresolved -- with Lyft's archrival, Uber, likely to be the industry leader expected to fight hardest in the courts to try to keep workers in these businesses tagged as independent contractors with fewer workplace protections.
In fact, Uber has shown no signs of reaching a settlement similar to Lyft's. The company is hotly contesting a similar case unfolding in San Francisco federal court, recently appealing a judge's decision to deem the lawsuit a class-action that could impact tens of thousands of Uber drivers. A federal appeals court on Wednesday refused to put the case -- set for trial in June -- on hold while the company appeals that order.