Uber, Lyft agree to pay $328M to drivers in NY wage settlement
The companies agreed to the payments to settle an investigation into withholding pay from more than 100,000 of its drivers. Credit: Jeff Bachner
ALBANY — The ride-sharing companies Uber and Lyft have agreed to pay $328 million to settle an investigation into withholding pay from more than 100,000 of its drivers, according to state Attorney General Letitia James.
James said the settlement announced Thursday stems from her multiyear investigation into claims that the companies withheld pay from drivers and prevented them from receiving benefits available under state labor laws.
The settlement will provide back pay to drivers and create an “earnings floor” minimum pay scale, paid sick leave, reporting of hiring and earnings notices, and other changes to working conditions, James said.
“For years, Uber and Lyft systematically 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. These settlements will ensure they finally get what they have rightfully earned and are owed under the law.”
Under the settlement, Uber will pay $290 million and Lyft will pay $38 million.
Uber said it welcomes the changes under the settlement that augment a previous agreement with the state Department of Labor.
“This helps put to rest the classification issue in New York and moves us forward with a model that reflects the way people are increasingly choosing to work,” Uber said in a statement. “It also will serve as a model for other states, demonstrating that when we work together with legislators and regulators, we can resolve these issues in a way that benefits workers and consumers alike.”
The settlement negotiations with Uber included the state Labor Department, which would enforce provisions of the deal, said Gov. Kathy Hochul. The Labor Department will collect quarterly payments to cover unpaid unemployment insurance payments from the company dating to 2013, Hochul said.
James said her office’s investigation found that from 2014 to 2017 Uber deducted sales taxes and other fees from payments made to drivers when those costs should have been paid by passengers. That practice reduced the cost to customers. Further, James said the company misrepresented the fees to drivers in their pay statements.
Lyft also reduced drivers’ compensation from 2015 to 2017 through an “administrative charge,” James said.
“This is a win for drivers, and one we are proud to have achieved with the New York Attorney General’s Office,” stated Lyft’s chief policy officer, Jeremy Bird. “We look forward to continuing this work in order to provide New York drivers the independence and full range of benefits available to those in other states, like California and Washington.”
Both companies failed to provide paid sick leave as required by state law.
Drivers who are eligible for payments under the settlement will receive notices by mail, email or text message. More information for drivers is available at the attorney general’s website.
Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.