Uber and Lyft to pay New York drivers $328 million in settlement

  • In a significant win for Uber and Lyft drivers in New York City, both platforms need to pay drivers in a wage theft settlement.
  • The settlement comes after an investigation by the New York attorney’s general into the company’s policies.
  • The AG says Uber and Lyft “systematically cheated their drivers” in terms of pay and benefits.

In February of last year, Uber and Lyft drivers in New York City received a bump to their minimum pay rate, but now the ridesharing platforms will need to shell out even more money as part of a settlement following an investigation by the attorneys general in the region.

This as Uber and Lyft have agreed to pay a combined $328 million in the settlement to more than 100 000 current and former drivers operating in New York City.

New York AG Letitia James, who led the wage theft investigation, stated that the policies of Uber and Lyft “systematically cheated their drivers out of hundreds of millions of dollars in pay and benefits.”

“These drivers overwhelmingly come from immigrant communities and rely on these jobs to provide for their families. These settlements will ensure they finally get what they have rightfully earned and are owed under the law. My office will continue to make sure that companies operating in the so-called ‘gig economy’ do not deprive workers of their rights or undermine the laws meant to protect them,” the AG added in a statement.

As part of the settlement, both ridesharing platforms will need to offer drivers minimum hourly pay rates and paid sick leave.

It is a big win for drivers in the region, and potentially serves as a precedent for a pair of companies that still refuse to acknowledge drivers as employees, despite it being the key sticking point for those who make use of the platforms in order to earn money.

Breaking down the settlement, Engadget points out that Uber will be fitting the larger portion of the payout at $290 million, while Lyft is accountable for $38 million.

Unpacking the elements of the wage theft, the AG noted that, “From 2014 to 2017, Uber deducted sales taxes and Black Car Fund fees from drivers’ payments when those taxes and fees should have been paid by passengers. Uber misrepresented the deductions made to drivers’ pay in their terms of service, telling drivers that Uber would only deduct its commission from the drivers’ fare, and that drivers were ‘entitled to charge [the passenger] for any tolls, taxes or fees incurred,’ though no method to do this was ever provided via the Uber Driver app.”

As for Lyft, the attorney’s general pointed out that Lyft employed a similar method to shortchange drivers from 2015 to 2017, deducting a 11.4 percent ‘administrative charge’ from drivers’ payments in New York equal to the amount of sales tax and Black Car Fund fees that should have been paid by riders.”

The settlement is rather damning for both ridesharing companies, and serves as proof that the woes of those utilising gig platforms in order to earn money, are not being treated fairly.

[Image – Photo by Mariia Shalabaieva on Unsplash]


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