New York Attorney General Letitia James announced this Thursday a historic settlement totaling $328 million with ride-sharing companies Uber and Lyft for “defrauding” drivers out of hundreds of millions of dollars.
The settlement resolves years-long investigations into Uber and Lyft, which found that the companies’ policies withheld drivers’ hard-earned wages and prevented them from receiving valuable benefits available under New York labor laws.
The platforms will return $328 million in back wages to drivers and institute a “minimum earnings floor” for drivers, paid sick leave, adequate hiring and earnings notices, and other improvements to drivers’ working conditions. Uber will pay $290 million and Lyft will pay $38 million in two separate settlement funds that will be distributed entirely to current and former drivers.
“Rideshare drivers work at all hours of the day and night to take people where they need to go,” prosecutor James said in a statement. “For years, Uber and Lyft systematically scammed their drivers out of hundreds of millions of dollars in wages and benefits while they worked long hours under difficult conditions. These drivers mostly come from immigrant communities and depend on these jobs to support their families,” added the state official.
James assured that this agreement will ensure that they finally get what they have rightfully earned and what they are owed under the law.
For her part, Governor Kathy Hochul highlighted: “This agreement sends a powerful message to workers: New York has your back.”
To file a claim
Eligible drivers can file a claim to receive the funds they are owed. Notices regarding distribution will be delivered to drivers via mail, email and/or text message. Information on filing, reviewing, and distributing claims is also available on the OAG website https://ag.ny.gov/lyft-uber-settlement.
According to the Prosecutor’s Office, from 2014 to 2017, Uber deducted sales taxes and Black Car Fund fees from driver payments when those taxes and fees should have been paid by passengers.
“Uber misrepresented the deductions made from drivers’ pay in its terms of service, telling them that the company would only deduct its commission from drivers’ rates and that drivers had the right to collect [al pasajero] any tolls, taxes or fees incurred. Although no method was ever provided to do so through the Uber Driver application,” it was stated.
Lyft also used a similar method to defraud drivers from 2015 to 2017, deducting an 11.4% “administrative fee” from driver payments in New York, equal to the amount of sales tax and Black Car Fund fees. that the passengers should have paid.
As established by the Prosecutor’s Office, from now on Uber and Lyft agreed to a “minimum of profits”, guaranteeing that drivers throughout the state receive a minimum rate from the beginning to the end of the trip. Drivers outside of New York City will receive a minimum of $26 per hour, adjusted annually for inflation, ensuring for the first time that the thousands of Uber and Lyft drivers who primarily work outside of New York City will be guaranteed a minimum wage.
Drivers operating in New York City already receive minimum pay under regulations established by the Taxi and Limousine Commission (TLC) in 2019.
sick leave
Drivers will earn one hour of sick pay for every 30 hours worked, up to a maximum of 56 hours per year. Drivers making trips outside of New York City will receive a minimum pay of $26 per hour for sick leave, adjusted annually for inflation. To reflect New York City’s minimum driver pay rules that already include an amount for paid time off, drivers who complete trips covered by the TLC’s minimum driver pay rules will be compensated $17 per hour for sick leave, adjusted annually for inflation.
Uber and Lyft will also update their apps to allow drivers to request sick leave through the apps.
Uber and Lyft will also provide drivers with appropriate hiring notices and earnings statements. The companies will provide in-app chat support to drivers in multiple languages so they can easily ask questions about their income or other working conditions. Additionally, drivers will now be able to appeal all deactivations from the Uber and Lyft platforms.
More than 100,000 drivers across New York will receive settlement funds and the benefits provided to them under these historic agreements. They will also have a significant impact on the economic lives of rideshare drivers, who are predominantly immigrants and often the main source of income for their families. Surveys have shown that in New York City, nine out of ten drivers are immigrants, two-thirds work full-time as drivers, and more than half are the primary breadwinners in their homes.
“These agreements mark a critical step in ensuring fair treatment for self-employed workers across our state,” said Assemblywoman Michaelle Solages, Hispanic, Asian and Black Minority Chair.