This is the second in a two-part blog on Cotter v. Lyft, a California case involving misclassification of drivers. Read about the “whys” of the case in our first post, Employee or Independent Contractor? That Is the Question.
In the settlement agreement, Lyft agreed to pay more than $12 million ($12,250,000 to be exact, for all monetary benefits and payments to the settlement class, fees and expenses, taxes, and so forth), as well as revise its terms of service with drivers, including the following:
- Lyft will modify the at-will termination provisions in its terms of service to remove Lyft’s ability to deactivate a driver’s account for any reason and to replace those provisions with language detailing specific actions that will constitute a breach of contract by a driver and/or result in termination of the driver’s terms of service;
- Lyft will modify the arbitration provision in its terms of service to state explicitly that Lyft will pay for the arbitration fees and costs for claims brought by either party based on an alleged employment relationship between Lyft and a driver, Lyft’s deactivation of a driver’s account, termination provisions, or fares or hourly rates;
- Lyft will create a “favorite driver” option that results in some benefit to drivers who Lyft passengers designate as a “favorite”; and
- Lyft will modify its smartphone app to provide drivers with additional information about a potential Lyft passenger prior to a driver accepting any ride request from the passenger.