MANHATTAN (CN) — The two major ride-hailing apps, Uber and Lyft, have reached a pair of landmark settlements with New York labor regulators totaling $328 million over claims of systematically cheating drivers out of hundreds of millions of dollars, New York Attorney General Letitia James announced Thursday.
Uber will pay $290 million and its smaller ride-hailing rival Lyft will pay $38 million into two separate settlement funds that will be entirely distributed to more than 100,000 current and former drivers in the state of New York.
“Rideshare drivers work at all hours of the day and night to take people wherever they need to go,” James said in a statement on Thursday. “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.”
Lyft will make payments to eligible drivers for back pay owed from between Oct. 11, 2015, and July 31, 2017, while the San Francisco-based Uber will compensate eligible drivers for back pay for the period between Nov. 10, 2014, and May 22, 2017.
The respective settlement agreements were signed by Uber general counsel Randall Haimovici and Lyft general counsel Lindsay Llewellyn.
Acknowledging the global diversity of ride-hailing app drivers in New York, the companies will now provide in-app chat support for drivers in multiple languages so they can easily ask questions about their earnings or other work conditions.
The settlements resolve multi-year investigations into Uber and Lyft, which found that the companies improperly collected sales tax and the Black Car Fund surcharges from New York drivers rather than passengers.
The settlements will return $328 million in back pay to drivers and institute a minimum driver “earnings floor,” guaranteed paid sick leave, proper hiring and earnings notices, and other improvements in drivers’ working conditions.
Eligible drivers can file a claim to receive the funds they are owed.
Rust Consulting will serve as the claims administrator and to notify the class.
Drivers outside of New York City will receive a minimum of $26 per hour, adjusted annually for inflation, ensuring for the first time that the thousands of Uber and Lyft drivers working primarily outside of New York City will be guaranteed minimum pay.
Drivers operating in New York City already receive minimum driver pay under regulations established by the Taxi & Limousine Commission in 2019.
In February 2022, Mayor Eric Adams, freshly elected and championing New York City as a home for tech companies, announced a 5% pay increase for Uber and Lyft drivers.
New York taxi advocates applauded the historic settlements on Thursday.
“For years, our union has been fighting to recover stolen wages for New York City Uber and Lyft drivers who were cheated out of better living conditions, timely meals, rest, and leisure,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in a statement.
Desai added: “We congratulate NYTWA’s legal team that uncovered the wage theft and pursued legal action, the Attorney General’s Labor Bureau who worked diligently on the settlements, Attorney General Letitia James whose leadership brought us to triumph, and our members whose refusal to give up made this day possible.”
New York state’s investigation into Uber and Lyft’s wage theft was handled by the New York’s Labor Bureau, part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.
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