NY Attorney General secures $328 million settlement payout from Uber and Lyft for wage theft
Uber and Lyft to pay $328 million in settlement funds to thousands of New York rideshare drivers, potentially providing substantial back pay, according to the state attorney general's announcement
New York Attorney General Letitia James has announced a settlement with rideshare companies Uber and Lyft. As part of the settlement, the companies have agreed to create two funds totaling $328 million to provide back pay to thousands of rideshare drivers in New York. The settlement comes after allegations that Uber and Lyft had cheated drivers out of hundreds of millions of dollars in earnings.
As a result of extensive investigations by state attorney generals, both Uber and Lyft have reached settlements. These settlements address issues related to the withholding of certain pay and the denial of certain benefits to drivers under New York labor laws. Under the terms of the settlements, Uber will contribute $290 million and Lyft will contribute $38 million to two separate funds. These funds will be used to provide back pay to both current and former drivers. Additionally, the rideshare companies have agreed to implement improvements to the working conditions of drivers. This includes the establishment of a minimum earnings floor for drivers, ensuring that they receive a minimum rate of pay. While drivers in New York City already receive minimum driver pay as required by existing regulations, drivers outside of New York City will now be guaranteed a minimum rate. Furthermore, rideshare drivers will now also have access to guaranteed paid sick leave.
Attorney General James stated in a statement that Uber and Lyft had consistently deprived their drivers of substantial amounts of pay and benefits over the years, despite their extended working hours and difficult circumstances. James highlighted that a significant number of these drivers are from immigrant communities and heavily depend on these jobs to support their families. The settlement, James emphasized, will guarantee that they finally receive the compensation and entitlements that they rightfully deserve according to the law.
Uber has been accused by James office of deducting sales tax and Black Car Fund fees from drivers' payments between 2014 and 2017, when those taxes and fees should have been paid by passengers. Additionally, the investigation alleges that Uber misrepresented deductions made to drivers' pay in their terms of service. Similarly, Lyft has been accused by James office of deducting an "administrative charge" from drivers' payments between 2015 and 2017 in New York, which was equal to the amount of sales tax and Black Car Fund fees that should have been paid by riders.
According to the attorney general's office, more than 100,000 drivers in New York are eligible to receive settlement funds and expanded benefits. Surveys conducted by the office reveal that nine out of 10 drivers in New York City are immigrants, two-thirds work full-time as drivers, and more than half are the primary breadwinners in their households.
Eligible drivers can submit a claim to obtain the funds from the settlements. Tony West, Uber's chief legal officer, hailed the agreement with James' office as a victory for drivers throughout New York State, emphasizing the flexibility and additional benefits it offers drivers for the future.
Uber has always pushed for a transformation in the way things are by granting platform workers the freedom to choose when, where, and how frequently they work, along with receiving significant benefits. In a recent company blog post, West highlighted that the agreement made with the New York Attorney General's office brings them one step closer to realizing this objective.
"This resolution effectively resolves the classification matter in New York and propels us towards a framework that accurately mirrors the evolving work preferences of individuals," expressed West.
Jeremy Bird, Lyft's chief policy officer, expressed a similar appreciation for the agreement.
"This achievement is a victory for drivers, and we take pride in accomplishing it with the New York Attorney General's Office," stated Bird.
"New York has always been at the forefront of offering drivers flexible earning opportunities and portable benefits through its Black Car Fund, and this agreement builds on that solid foundation," Bird further elaborated. "We are eager to carry on with our efforts to ensure that New York drivers have access to the same independence and comprehensive benefits as their counterparts in states like California and Washington."
