(Bloomberg) -- Lyft Inc.’s proposal to pay its Californiadrivers an average of $53 each to drop claims that they should betreated like employees was rejected by a judge as “glaringly”inadequate.

A federal judge said in a ruling Thursday that a proposed payoutof $12.25 million for the 100,000 drivers in the case representsonly about a 10th of the amount of mileage reimbursement they wereseeking under their own attorney’s methodology for valuing claims.Adding in other uncompensated claims, the drivers may have been“shortchanged” even more, U.S. District Judge Vince Chhabria in SanFrancisco wrote.

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Chhabria also said the modest non-monetary benefits in thesettlement don’t make up for the “serious defects in the monetaryaspect.”

“We’re disappointed in the preliminary ruling,” ChelseaWilson, a spokeswoman for Lyft, said in an e-mail. “We believe wereached a fair agreement with the plaintiffs and are currentlyevaluating our next steps.”

Drivers’ lawyer

Shannon Liss-Riordan, a lawyer for the drivers, didn’t immediatelyrespond to an e-mail or phone call seeking comment on the ruling. Athird of the $12.25 million settlement fund was designated forattorney fees.

The judge also rejected criticism from the Teamsters union thatthe settlement forfeits the main goal of the drivers’ lawsuit— to force Lyft to treat them as full-fledged employees ratherthan contractors. The accord announced in January didn’t make anychange to Lyft’s classification of its California driver asindependent contractors.

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“The Teamsters’ position is based largely on policy argumentsbetter made to the legislative and executive branches,” Chhabriasaid. “And it disregards the risks the drivers would face if theytook their case to trial.”

The case is Cotter v. Lyft Inc., 13-cv-04065, U.S.District Court, Northern District of California (SanFrancisco).

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