Uber, Lyft to pay $328 million in wage theft settlement

Rideshare drivers face many challenges, from reports of threats and harassment from customers to known incidents of assault and allegedly having their pay withheld. The New York Attorney General’s Office announced Thursday, Nov. 2, that Uber and Lyft have agreed to pay a combined $328 million to settle allegations saying they illegally withheld wages from drivers and did not offer mandatory sick leave.

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New York Attorney General Letitia James said Uber will pay $290 million and Lyft will pay $38 million in what she called the largest wage-theft settlement in her history.

The record settlement equates to less than 1% of both Uber and Lyft’s annual revenue. Last quarter, Uber reported $9.3 billion in revenue and Lyft reported $1.02 billion.

The settlement stems from a multi-year investigation by James’ office which accused the two companies of withholding pay from drivers and preventing drivers from receiving benefits, like sick leave, required under New York state labor laws.

From 2014 to 2017, James said, Uber deducted sales taxes and fees from drivers’ pay that should have been paid by riders. Similarly, from 2015 to 2017, Lyft allegedly took an 11.4% administrative fee from some New York drivers.

Uber and Lyft have denied wrongdoing.

Uber’s Chief Legal Officer Tony White said in a statement that the agreement, “helps put to rest the classification issue in New York and moves us forward with a model that reflects the way are increasingly choosing to work.”

Jeremy Bird, Lyft’s chief police officer, called the agreement a “win” for rideshare drivers.

“For years, Uber and Lyft systemically cheated their drivers out of hundreds of millions of dollars in pay and benefits while they worked long hours in challenging conditions,” James said in a statement following the settlement. “These drivers overwhelmingly come from immigrant communities and rely on these jobs to provide for their families.”

In addition to paying a combined $328 million in back pay to drivers, Uber and Lyft have agreed to pay a minimum rate per ride. Drivers operating outside of New York city will now earn $26 per hour.

According to James’ office, more than 100,000 rideshare drivers in New York could be eligible to receive settlement funds and benefits. James added that drivers who are eligible will be notified via mail, email or text about how to file a claim.