Lyft provides new benefits to drivers in employment status settlement

The ride-hailing firm will pay $12.25m to settle a California suit but will not classify its workers as employees, as analyst says company 'got off lightly'

Ride-hailing service Lyft has agreed to settle a proposed class action lawsuit in California by giving drivers additional workplace protections but without classifying them as employees, removing a major threat to its business model.

The settlement agreement, filed late on Tuesday in San Francisco federal court, provides for Lyft to pay $12.25m, as well as give drivers notice if they are to be deactivated from the platform and other benefits.