Lyft agrees to pay $27 million to settle driver classification lawsuit

(credit: Kirlis Dambrins)

About 200,000 former and current Lyft drivers in California and their lawyers are to divvy up a combined $27 million under the settlement of a class action. The lawsuit involved the drivers' classification as hired contractors and not employees. Attorneys are to get about $3.6 million of the pot.

However, even under the deal that was approved Thursday by a San Francisco federal judge, drivers will continue to work as independent contractors. That means they must pay for their own gas and other expenses. They are still not covered under minimum-wage laws and are not entitled to unemployment insurance and other benefits.

Both Uber, which is involved in a similar class action lawsuit, and Lyft classify drivers as contractors because the companies' profits would be hit hard if they reclassified their drivers as employees.

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