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Lyft Strikes Bigger Settlement With Drivers
By Ben Hancock

SAN FRANCISCO - Lyft Inc. has reached a new $27 million settlement with California drivers to end litigation over their independent contractor status, after a federal judge threw out an earlier deal as too low.

The monetary aspect of the deal is more than double the $12.25 million payment that was rejected last month by U.S. District Judge Vince Chhabria of the Northern District of California. Chhabria said that amount "shortchanged" drivers and insisted that any future deal be at least 17 percent of the expenses that would be owed to Lyft drivers if they prevailed at trial.

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A court filing on Wednesday said the new settlement exceeds Chhabria's benchmark by $500,000. Under the agreement, lead drivers' lawyer Shannon Liss-Riordon of Boston-based Lichten & Liss-Riordan would receive $3.675 million in attorney fees-the same amount as under the earlier settlement.

"We are proud to have reached this new agreement, which will provide significant payments to Lyft drivers who have put a lot of their time into this company," Liss-Riordan said in a statement.

In addition to the cash payment, Lyft will modify its current "at will" termination policy for drivers, giving them more opportunity to challenge a decision to deactivate them. That is essentially the same as the original deal announced earlier this year, although Lyft will also extend a pre-arbitration dispute resolution program to already deactivated drivers.

"In light of Lyft's continued growth, we agreed to update the resolution in a way that both increased monies paid to drivers and helped preserve their flexibility to control when, where and for how long they drive on the platform," said Kristin Sverchek, general counsel at Lyft, in a prepared statement.

Lyft is being represented in the litigation by Keker & Van Nest partners James Slaughter and Rachael Meny.

Like a similar settlement reached in a lawsuit against Uber Technologies Inc. in April, the new Lyft deal does not resolve the worker classification issue. If drivers won recognition as employees, that would entitle them to reimbursement for expenses like gas and phone data under California law, among other benefits.

Chhabria found the earlier settlement value to be too small primarily because it was based on outdated information. The deal was negotiated last November, when Lyft data indicated that the value of Liss-Riordan's suit-if she were to win-was close to $70 million. According to the new settlement motion, maximum recovery as of March 28 was $156 million.

Chhabria also criticized Liss-Riordan's calculation of the potential damages under the California Private Attorney General Act, or PAGA, as arbitrary.

Under the new deal, $1 million is allocated to PAGA claims, 75 percent of which will be paid to the state of California.

Contact the reporter at [email protected].

Read more: http://www.therecorder.com/id=12027...-Bigger-Settlement-With-Drivers#ixzz48ON8s000
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