Uber and Lyft have settled to pay a combined $328 million for withholding drivers’ earnings, with Uber agreeing to pay $290 million and Lyft $38 million.
The settlement funds will provide eligible drivers with back pay, mandatory sick leave, and other benefits to get back all the money owed.
Lyft referred to the agreement as “historic,” building upon existing benefits for drivers through the state’s Black Car Fund.
According to Jeremy Bird, Lyft’s chief policy officer, the agreement is a significant win for drivers.
“We look forward to continuing this work to provide New York drivers with the independence and full range of benefits available to those in other states, like California and Washington,” Bird said in a statement.
“For years, we have advocated to change the status quo to allow those who choose platform work to have both the ability to work when, where, and how often they want, as well as receive important benefits,” Uber said.
According to New York Attorney General Letitia James, in 2014–2017, Uber deducted sales taxes and Black Car Fund fees from drivers’ payments when passengers should have paid those taxes and fees.
Uber’s terms misrepresented deductions by assuring only their commission would be taken from drivers’ fares. They suggested drivers could bill passengers for additional costs, yet the Uber Driver app did not offer a method for this.
Both Lyft and Uber utilized a comparable method, deducting an 11.4% “administrative charge” from drivers’ earnings in New York from 2015 to 2017, equivalent to the sales tax and Black Car Fund fees owed by riders.
Additionally, drivers weren’t granted the paid sick leave mandated by New York City and New York State laws for employees.
“For years, Uber and Lyft systemically cheated their drivers out of hundreds of millions of dollars in pay and benefits while they worked long hours in challenging conditions,” James said. “These drivers overwhelmingly come from immigrant communities and rely on these jobs to provide for their families. This settlement will ensure they finally get what they have rightfully earned and are owed under the law.”
An “earnings floor” has been set to guarantee a minimum rate for drivers across New York State. Drivers statewide outside New York City will get a minimum of $26 per hour, while those in New York City already have regulated minimum pay since 2019.
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