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If Lyft Drivers Were Employees They Would Be Owed $126 Million, Say Court Documents

Court documents show Lyft drivers have missed out on hundreds of millions in expense reimbursements because they are considered contractors.

[Photo: Flickr user Daniel X. O'Neil]

If Lyft drivers were considered employees of the ride-hailing company—rather than independent contractors, as they are currently classified—they would have been paid a total of $126 million more over the last four years, Reuters reports recent court records show. The $126 million figure is related to expense reimbursements Lyft drivers could claim if they were legally classified as employees. Broken down by individual driver, that would mean an average of $835 more earned per Lyft driver over the last four years.

The figure was reached using the standard rate for mileage reimbursement set by the U.S. government and data on Lyft rides completed over the last four years, the court documents show. The were compiled by the legal team representing Lyft drivers in a class action lawsuit against the company in California. The judge presiding over the case requested the numbers.

As Reuters notes, the figures show just how much Lyft and other ride-sharing services stand to save by classifying their drivers as contractors instead of employees.

However, Lyft has called the figures "hypothetical and misleading" because they assume that all of its contracted drivers would be employees, even though more than 100,000 of the 150,602 drivers represented in the class action lawsuit drove fewer than 60 hours over a four year period, which means that would have made less than the $835 average the figures suggest.

However, Reuters points out that more than 1,500 drivers represented in the lawsuit drove more than 1,000 hours over the four year period, which means they would be entitled to significantly more than the $835 in expenses reimbursements if they were considered employees.

Lawyers representing Lyft drivers originally reached a settlement agreement with Lyft in the class action lawsuit in January. At the time Lyft agreed to pay $12.25 million to the drivers. After legal fees were deducted, that meant each of the 150,602 drivers represented in the class action lawsuit would get $56. However, after the new figures have been calculated, the original settlement would represent less than 10% of what the expenses reimbursements should be.

The judge presiding over the case in San Francisco is expected to make a decision on whether to preliminarily approve the originally settlement agreement later this week. Lyft is expected to make $1 billion in annualized gross revenue by November 2016.