In early October, California state and city authorities reached a landmark settlement with the rideshare company Lyft over the state’s allegations that the company misclassified its drivers as independent contractors instead of employees, denying them wages and benefits they would have otherwise been owed between 2016 and 2020. If a judge approves the settlement—involving the state attorney general, Rob Bonta, and attorneys for San Francisco, San Diego, and Los Angeles—the company will pay $272.5 million, the largest wage-and-hour-settlement in California history.

But the historic settlement also underscores the limits of the legal victory for gig workers. While Lyft is now poised to pay hundreds of millions of dollars over its past treatment of drivers, the company has since helped rewrite the very labor rules that are at the center of the dispute. In 2020, Lyft and other gig companies bankrolled Proposition 22, whose approval by voters allowed them to continue classifying drivers as independent contractors. The result is a settlement that compensates drivers for alleged past violations but does little to change the conditions under which they work today.

For drivers, it’s a bittersweet victory. “It’s a freaking absolute victory for drivers,” says Nicole Moore, president of Rideshare Drivers United. “This is a little bit of justice to get back what they stole from us.” But, she argued, the settlement should have come sooner, and the amount should be far higher.

Lyft, for its part, maintains that it has always classified its drivers appropriately. “If approved, this settlement closes a chapter from a very different time, before Prop 22,” George Flynn, a spokesperson, said in a statement.

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