NEW YORK (Reuters) – Uber and Lyft will pay a combined $328 million to settle claims by New York’s attorney general that the ride-sharing companies systematically cheated drivers out of pay and benefits.
Attorney General Letitia James said Uber will pay $290 million and Lyft will pay $38 million to resolve her office’s multi-year investigation.
Drivers will also be guaranteed minimum hourly rates and paid sick leave, and be given notices and in-app chat support to address their questions about earnings and other working conditions.
More than 100,000 current and former drivers in the state stand to receive settlement funds and related benefits.
“This settlement will ensure they finally get what they have rightfully earned and are owed under the law,” James said in a statement.
She called the accord with the San Francisco-based companies the largest wage theft settlement in her office’s history.
Uber and Lyft have long defended against claims nationwide that they shortchange drivers, many of whom are immigrants, out of pay and benefits, sometimes by classifying them as independent contractors instead of employees.
James accused Uber and Lyft of improperly deducting sales taxes and fees for a workers compensation fund from drivers’ payments, though passengers should have paid those amounts.
Uber’s alleged violations occurred from 2014 to 2017, and Lyft’s from 2015 to 2017.
James said both companies also denied drivers sick leave that state and New York City employees are legally entitled to receive.
The probe arose 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 car drivers.
Under the settlement, drivers outside New York City will receive a minimum $26 per hour for rides and sick leave, adjusted annually for inflation.
Drivers in New York City already receive minimum pay and some paid time off, as required by the city’s Taxi and Limousine Commission. James said Uber and Lyft drivers there will receive $17 per hour for sick leave, with inflation adjustments.
(Reporting by Jonathan Stempel in New York; Editing by Chris Reese)
