Uber and Lyft have agreed to collectively pay $328 million to resolve allegations made by New York’s attorney general, Letitia James, that the ride-sharing firms engaged in a consistent pattern of underpaying drivers and withholding benefits.
In response to the multi-year investigation by her office, Attorney General Letitia James announced that Uber will provide $290 million, while Lyft will contribute $38 million to address these claims. Furthermore, the settlement ensures that drivers will receive minimum hourly wages, access to paid sick leave, as well as notifications and in-app support for addressing their inquiries about earnings and overall working conditions.
Over 100,000 present and past drivers in the state are eligible to receive settlement funds and associated advantages.
In a statement, Attorney General Letitia James remarked, “This settlement will guarantee that they receive the compensation they have rightfully earned and are entitled to according to the law.”
She characterized the agreement with the San Francisco-based companies as the most substantial resolution for wage theft in the history of her office.
Uber and Lyft have consistently faced allegations across the country that they have unfairly withheld pay and benefits from drivers, including many who are immigrants, occasionally by categorizing them as independent contractors rather than employees.
James asserted that Uber and Lyft were at fault for wrongly subtracting sales taxes and fees for a workers’ compensation fund from drivers’ earnings, even though it was passengers who should have covered these expenses.
Uber’s alleged transgressions spanned from 2014 to 2017, while Lyft’s took place between 2015 and 2017.
Furthermore, James noted that both companies failed to provide drivers with sick leave, which is a legal entitlement for employees in the state and New York City.
This investigation was initiated in response to concerns raised by the New York Taxi Workers Alliance, a group claiming to represent approximately 21,000 drivers across various categories, including yellow taxis, green cabs, app-based services, livery, and corporate car drivers.
Under the settlement, drivers outside New York City will receive a minimum $26 per hour for rides and sick leave, adjusted annually for inflation.
Drivers in New York City already receive minimum pay and some paid time off, as required by the city’s Taxi and Limousine Commission. James said Uber and Lyft drivers there will receive $17 per hour for sick leave, with inflation adjustments.
Reporting by Jonathan Stempel in New York Editing by Chris Reese