Lyft, Inc. (NASDAQ: LYFT) reached a settlement agreement on September 30, 2026, to resolve allegations that it misclassified drivers in California as independent contractors, agreeing to pay $272.5 million inclusive of attorneys' fees, costs, and expenses.

The settlement was reached with the State of California, represented by the California Attorney General and the City Attorneys of San Francisco, Los Angeles, and San Diego, the California Labor Commissioner, and two private plaintiffs acting under the Private Attorneys General Act. The allegations cover the period from April 5, 2016, through December 15, 2020.

Under the terms of the agreement, which is subject to approval by the Superior Court of California, County of San Francisco, Lyft may spread payments over four years, with 5% simple interest accruing after the first year, capped at $12.4 million in total interest. The agreement includes no prepayment penalties or prospective operational commitments.

The settlement does not constitute an admission of fact or liability by the company. In the fourth quarter of 2025, Lyft recorded a $210 million accrual related to this matter, recognized as a charge split between a reduction to revenue and general and administrative expenses. The settlement amounts are excluded from the company's Adjusted EBITDA calculations.

Lyft confirmed its third quarter 2026 guidance for Gross Bookings, Adjusted EBITDA, and Adjusted EBITDA margin remains unchanged from figures provided on August 6, 2026. The company expects to report third quarter 2026 financial results in November 2026.