A federal judge in San Francisco gave preliminary approval Thursday to a lawsuit settlement that would give $27 million to 163,000 present and former Lyft drivers in California.
The settlement with the ride-booking company must have a fairness hearing before U.S. District Judge Vince Chhabria at a later date before it is finalized. Drivers will have a chance to object to the agreement or to opt out.
In addition to a monetary award averaging $142 per driver, depending on the length of time worked, drivers would have rights to receive tips and to challenge being fired.
But they would remain classified as independent contractors rather than employees for the time being.
An employee classification was originally one of the main goals of the 2013 lawsuit, because it would bring rights to workers' compensation, unemployment insurance, overtime pay and reimbursement of expenses.
Lyft and its larger ride-booking rival, Uber, both based in San Francisco, have insisted that the drivers are independent contractors.
Shannon Liss-Riordan, the Boston lawyer who negotiated the settlement, said earlier this month that she believed the agreement was the best that could be obtained because of the risk of losing the employee claim before a jury or an appeals court.
Liss-Riordan and her staff will receive $3.7 million of the settlement amount.
In April, Chhabria rejected an earlier $12.25 million settlement proposal, saying the financial amount was too small because it didn't account for a recent expansion in the number of Lyft drivers.
In today's decision, Chhabria said the new proposal seemed to be "fair, reasonable and accurate."
Another federal judge in San Francisco, U.S. District Judge Edward Chen, is considering whether to grant preliminary approval of a similar settlement that would give up to $100 million to 385,000 present and former Uber drivers in California and Massachusetts.