A class of Lyft shareholders has filed an unopposed motion for preliminary approval of settlement in their suit against Lyft, Inc. If accepted by the court, the class agrees to drop all charges in exchange for $25 million including reasonable accommodation for attorney’s fees.
After six months of contentious settlement negotiations, the class and Lyft reached this agreement for 3% of the maximum recoverable value. The motion argues this is reasonable, citing analyses done by Cornerstone Research that found that the median settlement for similar cases in 2021 was 4.4%.
In March 2019, Lyft went public, offering 32.5 million shares at a price of $72 per share, though the market value quickly dropped to less than $54 per share. Rick Keiner, the lead plaintiff, argues this precipitous drop was due to Lyft intentionally withholding information about the state of their business.
In the weeks following Lyft going public, dozens of individuals brought cases of Lyft drivers sexually assaulting them. It also came to light that despite Lyft’s claims to the contrary, their price war with Uber decreased Lyft’s market share. Furthermore, Lyft’s nascent bikeshare program was facing numerous problems, most notably maintenance issues and defects.
In May 2019, two separate complaints were filed against Lyft, and a year later, they were amalgamated into a single class action suit. In August 2021, the Northern District of California directed the parties to alternate dispute resolution, and both parties agreed.
After numerous failed mediations, on February 4, the parties agreed to a settlement of $25 million for the class, which includes no more than $6.25 million for attorney’s fees, and no more than $10,000 in reimbursements for the lead plaintiff. Rick Keiner selected A.B. Data as the claims administrator, and it is anticipated they will charge no more than $500,000 for their services. If there is any remaining money after all awards have been distributed to the class, it will be donated to the National Women’s Law Center, an organization that helps individuals and institutions redress incidents of sexual harassment.