Rideshare companies Uber and Lyft will pay a combined $328 million to settle claims by New York’s attorney general that the two firms systematically cheated drivers out of their pay and benefits, according to Reuters.
Attorney General Letitia James said Uber will have to pay the bulk of the fine, $290 million, and Lyft will pay $38 million to end the AG’s multi-year investigation into the companies. She reportedly said it was the largest wage theft settlement in her office’s history. On top of the settlement, drivers will now be guaranteed minimum hourly rates and paid sick leave. They will also have in-app chat support to address questions about their earnings and other working conditions.
Under the settlement, drivers outside New York City will receive a minimum of $26 per hour for rides and sick leave, which will be adjusted annually for inflation, according to Reuters. Drivers in the city already get minimum pay and some time off, which is required by the Taxi and Limousine Commission. Now, Uber and Lyft drivers will also get $17 per hour for sick leave, with inflation adjustments.
James’ probe addressed claims that Uber and Lyft improperly collected some taxes and fees from New York drivers rather than passengers.
It also addressed the companies’ practices of classifying drivers as independent contractors instead of employees.
More than 100,000 current and former drivers in the state are eligible to benefit from the settlements.
“These settlements will ensure they finally get what they have rightfully earned and are owed under the law,” James said in a statement.
Interestingly, both Uber and Lyft seem happy with the decision, according to ABC News. Why they didn’t treat their employees fairly in the first place is beyond me, though.
The “historic” agreement “builds on the benefits and protections that drivers already enjoy through the state’s Black Car Fund,” Lyft said in a statement. The agreement amounted to a “win” for drivers, Jeremy Bird, the company’s chief policy officer, said.
“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,” Bird said in a statement.
The “landmark, first-of-its-kind agreement” will bring Uber closer to its goal of allowing drivers to choose “flexibility” in their work without giving up protections, the company said in a statement.
“For years, we have advocated to change the status quo to allow those who choose platform work to have both the ability to work when, where and how often they want, as well as receive important benefits,” Uber said.
$328 million may sound like a lot of money — and it is — but it also equals a bit under one percent of the two companies’ annual revenue, according to Reuters.
James accused both Uber and Lyft of improperly deducting sales taxes and fees for a workers compensation fund through drivers’ payments. Uber’s alleged violation occurred between November 2014 and May 2017, and Lyft’s happened from October 2015 to July 2017, Reuters says. James added that both companies have denied drivers sick leave that state and city employees are legally entitled to receive.
The probe reportedly first stemmed from concerns from the New York Taxi Workers Alliance, which says it represents about 21,000 yellow taxi, green cab, app-based, livery and corporate drivers.
