Thousands of rideshare drivers in New York may be eligible to receive significant back pay from Uber and Lyft as part of a settlement announced by the state attorney general on Thursday.
New York Attorney General Letitia James announced two settlement funds totaling $328 million with rideshare companies Uber and Lyft for allegedly “cheating drivers out of hundreds of millions of dollars” in earnings, according to a statement from her office.
The settlements come as the result of multi-year investigations from the state attorney general’s office into Uber and Lyft, which found the companies’ policies withheld certain pay from drivers and prevented them from receiving some benefits available under New York labor laws.
As part of the settlements, Uber will pay some $290 million and Lyft will pay some $38 million into two separate funds that will be distributed as back pay to current and former drivers. Also as part of the agreement, the rideshare companies will institute improvements in drivers’ working conditions, including a minimum driver “earnings floor,” the attorney general’s office said. While drivers operating in New York City already receive minimum driver pay under current regulations, this means that drivers outside of New York City will receive a minimum rate. Rideshare drivers will now also receive guaranteed paid sick leave.
“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,” Attorney General James said in a statement accompanying the announcement.
“These drivers overwhelmingly come from immigrant communities and rely on these jobs to provide for their families,” James added. “This settlement will ensure they finally get what they have rightfully earned and are owed under the law.”
James’ office accused Uber of deducting sales tax and Black Car Fund fees from drivers’ payments from 2014 to 2017, when those taxes and fees should have been paid by passengers. (The Black Car Fund is a New York state-backed surcharge to cover workers’ compensation and insurance). The investigation also accuses Uber of misrepresenting deductions made to drivers’ pay in their terms of service. James’ office, meanwhile, accuses Lyft of similarly deducting an “administrative charge” from drivers’ payments from 2015 to 2017 in New York that was equal to the amount of sales tax and Black Car Fund fees that should have been paid by riders.
More than 100,000 drivers in New York stand eligible to receive settlement funds and expanded benefits. Citing surveys, the attorney general’s office said nine out of 10 drivers in New York City are immigrants, two-thirds work full-time as drivers and more than half are the primary breadwinners in their households.
Eligible drivers can file a claim to receive the funds from the settlements.
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