Lyft agreed on Thursday to pay $272.5 million to settle claims brought by California officials and private plaintiffs that the company misclassified drivers as independent contractors rather than employees from 2016 through 2020.

The settlement, announced by California Attorney General Rob Bonta and city attorneys from San Francisco, San Diego, and Los Angeles, marks the largest wage theft recovery of its kind in state history, according to officials. It resolves allegations that Lyft violated the California Labor Code and Unfair Competition Law by denying drivers minimum wage, overtime, and expense reimbursements during that period.

The suit originated with actions filed by the California Labor Commissioner's Office in Alameda County Superior Court in August 2020, followed by the Attorney General and the three city attorneys bringing a lawsuit on behalf of the People of the State of California in 2020 and 2021. Those cases were later consolidated in San Francisco Superior Court with private lawsuits brought on behalf of thousands of Lyft drivers. The private plaintiffs were represented by the law firms Outten & Golden LLP, Olivier & Schreiber PC, and Lichten & Liss-Riordan P.C.

Under the terms, at least $237 million of the total will go directly to eligible drivers through a third-party administrator. Payments will be calculated based on hours and miles driven between April 5, 2016, and December 15, 2020. The agreement remains subject to approval by a San Francisco Superior Court judge.

Lyft stated that drivers have always been properly classified under the law and that the company is glad to put the matter behind it. The settlement closes a chapter from before voters approved Proposition 22 in 2020, which preserved independent contractor status for app-based drivers in the state.

Lyft can spread payments over four years with interest if it chooses, up to an additional $12.4 million. The company recorded a $210 million accrual related to the matter in late 2025.

Similar disputes have continued in other states, though California voters explicitly backed the gig economy model through Proposition 22 to maintain flexibility for drivers and companies alike.