Uber, Lyft to pay 8 million to settle wage-theft allegations in New York state


Uber CEO Dara Khosrowshahi is interviewed on the buying and selling ground on the New York Stock Exchange (NYSE) in New York, August 2, 2022.

Andrew Kelly | Reuters

Uber and Lyft agreed to pay a mixed $328 million to settle allegations the ride-hailing firms unlawfully withheld wages from drivers and failed to present obligatory paid sick depart in New York state, Attorney General Letitia James’ workplace stated Thursday.

Uber will pay $290 million and Lyft will pay $38 million. The state AG’s workplace stated it is the biggest wage-theft settlement it is gained.

The cash will go to drivers affected by the businesses’ alleged practices. More than 100,000 drivers in New York could possibly be eligible to obtain the funds and advantages secured below the agreements, James’ workplace stated. Drivers might be notified by mail, electronic mail or textual content about how to file a declare.

“For years, Uber and Lyft systemically cheated their drivers out of lots of of tens of millions of {dollars} in pay and advantages whereas they labored lengthy hours in difficult situations,” James stated in a press release. “This settlement will guarantee they lastly get what they’ve rightfully earned and are owed below the regulation. My workplace will proceed to ensure that firms working in the so-called ‘gig economic system’ don’t deprive employees of their rights or undermine the legal guidelines meant to defend them.” 

The settlements, which resolve multiyear investigations, mirror the businesses’ newest concessions in a standoff with regulators throughout the nation concerning the stage of oversight they need to obtain and what they owe their drivers. Uber and Lyft have beforehand fought efforts to reclassify their workers from contractors to employees, for instance, a change they stated most of their employees opposed.

Uber’s settlement represents greater than 3% of the $9.23 billion in income it generated final quarter. And Lyft’s settlement comes to practically 4% of the $1.02 billion in income it reported.

The firms additionally agreed to ongoing adjustments in how they pay drivers and provide advantages in the Empire State.

The AG’s workplace alleged the businesses incorrectly deducted fees from drivers’ wages that ought to have as a substitute been charged to passengers. For instance, the workplace stated that from 2014 to 2017 Uber deducted gross sales taxes and Black Car Fund charges from drivers’ paychecks and misrepresented that it will accomplish that in its phrases of service. And Lyft, the AG alleged, deducted an 11.4% administrative cost that equaled the quantity of the gross sales tax and Black Car Fund charges between 2015 and 2017.

Both firms additionally failed to present paid sick depart as required below state and New York City regulation, James alleged.

Under the agreements, Uber and Lyft might be required to give drivers exterior of New York City a assured incomes minimal of $26 per hour, which might be adjusted annually for inflation. The minimal fee would apply from “dispatch to completion of the trip,” in accordance to a press launch from the AG’s workplace. Drivers in New York City already obtain assured minimal earnings below native rules.

Drivers additionally will get assured paid sick depart in New York state. For each 30 hours labored, they’re going to have the opportunity to earn one hour of sick pay up to 56 hours per 12 months, the AG’s workplace stated. Both firms will make updates so drivers can request sick depart by way of the apps, in accordance to the press launch.

Uber and Lyft additionally agreed to give drivers compensation breakdowns, the AG’s workplace stated. The firms may have to notify drivers how a lot a rider paid for every trip and provides drivers an in-app chat instrument to talk about earnings and work situations. Uber and Lyft additionally should permit drivers to enchantment deactivation from their platforms.

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