Emergency Brake, ABS and (!)

You need the rear drum brakes adjusted. Could be several problems with drums including the barrel adjustment brake actuator inside the drum which will require bleeding the brakes if you replace it. As a quick patch to see if you can adjust them without working on them, you can put the car in reverse & drive approx. 10mph in reverse & slam on the brakes do this twice they should self adjust

 

You will most likely have to figure out how to reset the lights, with by obd2 scan tool or techstream software.

 

When you say you have lights on- do you mean that you have warnings lights on the dash that are lit up? If so then you need someone with a Toyota compatible scantool to pull whatever codes there are. Or are you saying the the brake lights at the back of the car work normally?

If your mechanic can't figure out drum brakes and how the Prius controls them then you had better take it somewhere else. Did you/he have to do any work on the rear hydraulics (wheel cylinders)?- the prius needs a special procedure -using a scantool- to bleed air out of the rear brakes.

I realize that everyone was a noob at one time but learning on the job with a critical safety system ain't the best approach. No matter what is going on with the hydraulic braking system, the emergency (cable operated) brakes should work. The shoes and hardware should be installed and adjusted correctly, the cables should move freely, and the wheels should lock with the E-brake pedal pushed down, period.