Uber and Lyft have agreed to settle a landmark wage theft case with a combined payment of $328 million, according to New York’s attorney general, Letitia James. The settlement comes after a multi-year investigation into allegations that the ride-sharing companies systematically cheated drivers out of pay and benefits.
Under the agreement, Uber will pay $290 million, while Lyft will pay $38 million. In addition to the monetary settlement, the companies have agreed to implement measures to ensure fair treatment of drivers. These include guaranteeing minimum hourly rates, providing paid sick leave, and offering in-app chat support for drivers to address any questions or concerns about their earnings and working conditions.
The settlement will benefit more than 100,000 current and former drivers in the state of New York, who will receive settlement funds and related benefits. Attorney General James described the settlement as the largest wage theft settlement in her office’s history and emphasized that drivers will finally receive what they have rightfully earned and are owed under the law.
The allegations against Uber and Lyft include improper deductions of sales taxes and fees for a workers’ compensation fund from drivers’ payments, as well as the denial of sick leave to drivers. Drivers in New York City already receive minimum pay and some paid time off, as required by the city’s Taxi and Limousine Commission. As part of the settlement, drivers outside of New York City will receive a minimum hourly rate of $26 for rides and sick leave, adjusted annually for inflation. In New York City, Uber and Lyft drivers will receive $17 per hour for sick leave, with inflation adjustments.
The investigation was prompted by concerns raised by the New York Taxi Workers Alliance, which represents various types of drivers. Both Uber and Lyft have faced similar claims across the country, with drivers alleging that they are being shortchanged in terms of pay and benefits. These claims often revolve around the classification of drivers as independent contractors instead of employees.
While the settlement marks a significant resolution to the wage theft case, it also highlights ongoing debates surrounding the labor rights of gig economy workers. By guaranteeing minimum pay rates and paid sick leave, the settlement sets a precedent for how ride-sharing companies should treat their drivers. It remains to be seen whether this settlement will impact similar cases or legislation in other states.
Overall, the settlement between Uber, Lyft, and the New York attorney general is seen as a significant step towards ensuring fair treatment of drivers and addressing wage theft within the ride-sharing industry. With the provision of guaranteed minimum rates and paid sick leave, drivers in New York can expect improved working conditions, setting an example for other states and potentially influencing the treatment of gig economy workers across the country.
