Uber and Lyft in settlement over payment issues with New York drivers

New York Attorney General Letitia James announced settlements involving the rideshare companies Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) totaling $328 million that will resolve claims the companies failed to pay their drivers properly.

According to James’ office, Uber deducted sales taxes and Black Car Fund fees from drivers’ payments between 2014 and 2017 when those taxes and fees should have been paid by passengers, while Lyft deducting a 11.4% “administrative charge” from drivers’ payments in New York between 2015 and 2017 that was equal to the amount of sales tax and Black Car Fund fees that should have been paid by riders. Uber and Lyft also failed to provide drivers with paid sick leave available to employees, as per state and New York City law.

Uber will pay $290 million and Lyft will pay $38 million into two separate settlement funds which will be entirely distributed to current and former drivers – eligible drivers can file a claim with James’ office to receive the funds they are owed. Uber and Lyft drivers will now also receive guaranteed paid sick leave and the companies will provide proper hiring notices and earnings statements to their drivers.

“Rideshare drivers work at all hours of the day and night to take people wherever they need to go,” said James. “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. 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.”