California, along with the city attorneys of San Francisco, Los Angeles, and San Diego, is in confidential mediation with Uber and Lyft over a California Uber and Lyft settlement that could deliver back pay to hundreds of thousands of drivers who worked between 2016 and 2020. The state alleges the companies willfully misclassified drivers as independent contractors during that period, denying them minimum wages, overtime, expense reimbursements, paid sick leave, and rest breaks. Mediation sessions were held in spring 2025, and if no deal is reached, a trial is expected in 2026, with a possible deadline stretching into December 2027.1CalMatters. Uber Proposition 22 Lawsuit
Who Is Covered and for What Years
The litigation covers California drivers who worked for Uber or Lyft from roughly 2016 through December 15, 2020. That end date matters. Proposition 22, the ballot measure backed by gig companies and passed by voters in November 2020, took effect on December 15, 2020, and reclassified app-based drivers as independent contractors going forward.2California Department of Industrial Relations. Lawsuits Uber Lyft The California Supreme Court unanimously upheld Prop 22 in July 2024 in Castellanos v. State of California.3Justia. Castellanos v. State of California
Because of that ruling, the Labor Commissioner’s wage and damages claims are capped at December 15, 2020. Work performed after that date falls under the Prop 22 framework and is generally outside this lawsuit. An estimated 250,000 California drivers worked for the companies during the covered period.4CalMatters. Uber Lyft Could Owe California Gig Workers Billions of Dollars in California Wage Theft Case
The core legal question is whether, under California’s Assembly Bill 5 and the “ABC test” it codified in January 2020, drivers should have been treated as employees. AB 5 requires companies to prove the worker is free from the company’s control, performs work outside the company’s usual business, and operates an independently established trade. Drivers dispatched by the companies’ apps to perform the companies’ core service had difficulty satisfying that test.5CalMatters. AB 5 California Uber
What Drivers Were Allegedly Owed
The California Labor Commissioner’s office has characterized the companies’ conduct as “willful misclassification” and alleged the companies denied drivers basic employee protections. The claims fall into several categories:
- Minimum wage shortfalls, once unpaid wait time between trips is factored in.
- Reimbursement for necessary business expenses, including gas, car maintenance, and insurance, which drivers paid out of pocket.
- Overtime pay, mandatory meal breaks, and paid rest breaks.
- Paid sick leave.
The lawsuits also seek liquidated damages and civil penalties on top of unpaid wages.6California Department of Industrial Relations. FAQ Lawsuits Uber Lyft All of these are protections California employees receive by law. The entire case rests on the premise that drivers should have been classified as employees and were therefore entitled to them.
How Much Money Is on the Table
The financial exposure for Uber and Lyft could be enormous, though no settlement number has been made public.
In 2020, the driver advocacy group Rideshare Drivers United organized more than 5,000 drivers to file individual wage claims with the state Labor Commissioner, totaling over $1.3 billion in alleged stolen wages, expenses, and damages.7Rideshare Drivers United. About Us That figure represents only the drivers who filed individual claims. If the case proceeds to trial and recovery extends to the full population of approximately 250,000 California drivers who worked during 2016–2020, total liability could reach into the tens of billions, according to RDU’s calculations.4CalMatters. Uber Lyft Could Owe California Gig Workers Billions of Dollars in California Wage Theft Case
Where the Settlement Talks Stand
The parties entered confidential mediation in early 2025 after years of procedural delay. A session with Uber was scheduled for March 31, 2025, and a separate session with Lyft for April 8, 2025.8KQED. Uber Lyft Withheld Billions in Pay, California Alleges; Settlement Talks Are Underway The talks involve the state Justice Department, the Labor Commissioner, the three city attorneys, and plaintiffs who filed under the Private Attorneys General Act.
Beyond recouping back pay, Rideshare Drivers United is pushing for forward-looking protections: a minimum rate card of $1.75 per mile and $0.60 per minute, and a “just cause” requirement for deactivation that would stop companies from removing drivers from the platform without a legitimate, stated reason. Nicole Moore, president of RDU and a part-time rideshare driver, said the group is “asking the state to stand strong, the cities to have a backbone, and not let these companies off the hook.”9News From the States. California Settlement Negotiations Uber Lyft Massive Wage Theft Case
Uber has signaled interest in resolving the dispute. Spokesperson Zahid Arab said the company looks forward to “putting these years-old matters behind us” and noted that California voters “have spoken” through Prop 22. Uber also pointed to more than $1 billion it says it has invested in driver benefits since January 2021, including earnings guarantees and health care stipends.8KQED. Uber Lyft Withheld Billions in Pay, California Alleges; Settlement Talks Are Underway Neither company has publicly discussed financial terms.
If negotiations fail, the state anticipates a trial beginning in 2026, with the trial clock potentially extending to a deadline in December 2027.1CalMatters. Uber Proposition 22 Lawsuit
What Other States Have Gotten
Two recent out-of-state settlements offer a sense of scale, though California’s case covers a larger driver pool over more years.
In New York, Attorney General Letitia James secured a combined $328 million from Uber ($290 million) and Lyft ($38 million) in November 2023. The settlement covered over 100,000 drivers, directed 100% of the funds to back pay, and established an earnings floor of $26 per hour for drivers outside New York City, along with paid sick leave and a right to appeal platform deactivations.10Office of the New York Attorney General. Attorney General James Secures $328 Million From Uber and Lyft
In Massachusetts, a June 2024 settlement totaled $175 million. It included a guaranteed minimum wage of $32.50 per hour during active driving time, paid sick leave, a stipend for the state’s family and medical leave program, and up to $1 million in occupational accident insurance coverage per driver. Drivers remained independent contractors.11Fisher Phillips. Uber and Lyft Settlement Provides New Precedent for the Gig Economy In both cases, the companies paid substantial sums and accepted ongoing benefit requirements without reclassifying drivers as employees.
One point of possible confusion: a separate, much smaller federal class action, James v. Uber Technologies, Inc., settled in 2022 for $8.4 million, covering roughly 1,322 California drivers who had opted out of arbitration and worked between February 2019 and December 2020.12Bloomberg Law. Uber Will Pay $8.4 Million to End Years-Long Driver Class Action That case is not the state wage theft litigation now in mediation.
What the Settlement Won’t Fix
A settlement would resolve the pre-2020 claims, but it would not necessarily address a separate problem drivers face today: no state agency has been clearly assigned to enforce Prop 22’s benefit requirements. The Department of Industrial Relations has said it lacks jurisdiction because Prop 22 classifies drivers as independent contractors, and the Attorney General’s office has said it does not adjudicate individual claims. Since Prop 22 took effect, 54 driver claims related to its provisions have been filed with the state, and at least 32 remained unresolved as of late 2024.13CalMatters. Gig Work California Prop 22 Enforcement
In April 2026, Rideshare Drivers United filed a new lawsuit against Uber in San Francisco Superior Court, alleging the company fails to provide a legitimate appeals process for deactivated drivers and does not give drivers enough earnings information to verify they are receiving the mandated 120% of minimum wage during active ride time. The plaintiffs argue that because Uber has failed to meet Prop 22’s conditions, it should not be allowed to use the law as a basis for classifying drivers as independent contractors. Uber called the suit “baseless” and a “publicity stunt,” saying it is in full compliance.14Courthouse News. Drivers Say Uber Is Not Complying With California’s Proposition 22
Whatever comes out of the current mediation will shape back pay for the 2016–2020 period. Drivers’ day-to-day pay and job security going forward depend on a separate fight over whether Prop 22 is being honored at all.