Judge approves $27 million settlement in suit against Lyft

A federal judge approved a $27 million settlement Thursday, March 16, 2017, for more than 200,000 current and former California drivers against ride-hailing company Lyft Inc. A federal judge approved a $27 million settlement Thursday, March 16, 2017, for more than 200,000 current and former California drivers against ride-hailing company Lyft Inc. Photo: Amy Osborne, Special To The Chronicle Photo: Amy Osborne, Special To The Chronicle Image 1 of / 1 Caption Close Judge approves $27 million settlement in suit against Lyft 1 / 1 Back to Gallery

A federal judge approved a $27 million settlement Thursday for more than 200,000 current and former California drivers for the ride-hailing company Lyft Inc., an agreement that increases their protection against dismissals but fails to resolve their employment status.

The drivers sued Lyft for classifying them as independent contractors, a move that required them to pay for gas and other work expenses and left them unprotected by labor laws such as minimum wages, unemployment insurance and collective bargaining.

Arguing for employment status, the drivers said Lyft dictates their fares, routes and reimbursement, and requires them to greet passengers with a “smile and a fist bump.” The company countered that drivers choose their own work hours and decide which passengers to accept.

The settlement allows Lyft to continue to describe the drivers as contractors, but leaves the issue open for a possible future case. They would be allowed to challenge dismissals before an arbitrator.

U.S. District Judge Vince Chhabria of San Francisco had rejected a proposed $12.05 million settlement in April. He said the drivers might win as much as $156 million in damages if they went to trial and convinced a jury they should be classified as employees.

But Chhabria tentatively approved a renegotiated $27 million agreement two months later and gave final approval Thursday. He said the amount was “fair, reasonable and adequate,” in view of the uncertainty of the outcome of a trial.

Of the $27 million, attorney Shannon-Liss Riordan, who represented the drivers and negotiated the settlement, is to receive $3.65 million.

Lyft drivers who worked a few hours a week between May 2012 and July 2016, the dates of the settlement, will get about $130 apiece. But Liss-Riordan said nearly 1,000 drivers who regularly worked more than 30 hours a week would receive several thousand dollars.

A similar lawsuit is pending against the larger ride-hailing company Uber by 385,000 drivers in California and Massachusetts.

Bob Egelko is a San Francisco Chronicle staff writer. Email: begelko@sfchronicle.com Twitter: @egelko