Topline
Uber and Lyft have agreed to pay New York drivers a more than $300 million settlement and increase drivers’ benefits after an investigation into the ride-sharing apps found they withheld wages and benefits from drivers, New York Attorney General Letitia James’ office said Thursday.
Uber and Lyft drivers in New York will now be guaranteed paid sick leave under the settlement.
Key Facts
Uber will pay $290 million and Lyft will pay $38 million to current and former drivers after James’ office spent years investigating a wage-theft complaint against the companies, her office said Thursday.
Under the agreement, drivers will now be able to see compensation breakdowns for each of their rides that detail how much a rider paid for each ride, as well as earning statements that will detail their compensation for each pay period, James’ office said.
Uber and Lyft will be required to pay drivers outside of New York City a minimum of $26 per hour which will be adjusted for inflation each year—New York City drivers have had guaranteed minimum earnings since 2019, according to James’ office.
Drivers will also receive guaranteed paid sick leave after James’ investigation found both companies failed to give their employees sick leave, which is required under state and New York City law.
Moving forward, for every 30 hours a driver works they’ll be able to earn one hour of paid sick leave in the state, James’ office said, with a maximum of 56 hours of sick leave a year.
In a statement, Lyft called the agreement “historic” and said it would grant drivers “new benefits” and allow them “to keep their flexibility.”
Big Number
More than 100,000. That’s how many drivers in New York could be eligible to get the benefits and funds under the agreement, James’ office said.
Key Background
Beginning in 2014, Uber began deducting sales taxes and Black Car Fund fees—which contributes to a fund that provides drivers with worker compensation benefits—from drivers’ paychecks without disclosing those deductions, James’ office alleged. Those fees should have been paid by passengers and not taken out of drivers’ payments. Meanwhile, Lyft took an 11.4% “administrative charge” form customers between 2015 and 2017 that equaled the Black Car Fund and sales tax combined, according to James’ office. This “administrative charge” also should have been paid by riders, not by drivers.
Tangent
In 2020, California’s Labor Commissioner’s Office filed lawsuits against both companies accusing them of committing wage theft by misclassifying their drivers as independent contractors instead of employees.
Further Reading
Uber Reportedly Sues New York City Taxi Commission To Block Fare Increase (Forbes)
Source: https://www.forbes.com/sites/anafaguy/2023/11/02/uber-and-lyft-agree-to-pay-new-york-drivers-328-million-after-wage-theft-allegations/