Lyft’s Labor Resolving, Uber’s Still Unfolding

The sharing economy is here to stay, but less certain is the way the companies of this new age of retail classify and treat their on-demand workers. Ride-hailing companies, like Lyft and Uber, are at the center of this debate, and the former is now breathing easier with the news of a recent legal development.

Quartz reported that Lyft has finalized a $12.25 million settlement for the filers of a pending class action lawsuit in California. Filed by Lyft drivers, they implored that they should be reclassified as full-time employees and, as such, should be afforded all of the rights promised to them, such as health care, minimum wage guarantees and Social Security. While the plaintfiffs admitted that the settlement did not accomplish the reclassification of employees that they were hoping for, Kristin Sverchek, general counsel at Lyft, claimed that the decision will allow for maximum flexibililty for both sides.

“We are pleased to have resolved this matter on terms that preserve the flexibility of drivers to control when, where and for how long they drive on the platform and enable consumers to continue benefiting from safe, affordable transportation,” Sverchek said in a statement.

Quartz estimated that the $12.25 million settlement might have comprised just a fifth of the total costs Lyft would have been made to pay if they were ruled against in the trial, and that news should raise a few antennas at Uber’s offices. With an operation several magnitudes larger than Lyft and a similar suit pending against it due for initial hearings in June, Uber’s potential losses — as well as its assumed willingness to settle out of court given its rival’s experience — could prove insurmountable.

“Far more Uber drivers than Lyft drivers are anxious for us to continue pursuing these misclassification claims,” Shannon Liss-Riordan, the lawyer for the plantiffs in the Lyft case, told Quartz.