Uber, Lyft to pay $328m to drivers after New York state probe

NEW YORK: Uber and Lyft will pay $328 million to settle a New York probe alleging that the companies “cheated” drivers, in an accord that also establishes paid sick leave, state officials announced on Thursday.

The agreement follows state investigations that concluded the companies improperly deducted sums from drivers that should have been charged to passengers, according to New York Attorney General Letitia James, whose office brought the case.

“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,” said James in a statement.

“These settlements will ensure they finally get what they have rightfully earned and are owed under the law.” Uber praised the agreement as a “landmark” that would advance the company´s flexible employment system, while Lyft characterized it as a welcome “win” for drivers that “we are proud to have achieved with the New York Attorney General´s Office.”

“That´s $328 million back into the pockets of drivers!” said the New York Taxi Workers Alliance on X. “We´ve waited eight long years to see justice for our members, a workforce that was cheated out of better living conditions, and timely meals and rest and leisure because the earnings that would have provided for that life were stolen by multi-billion dollar corporations!”

The companies were required to collect state and local tax for 8.9 percent of the sales price of the trip from riders, plus 2.5 percent of the cost for the Black Car Fund program for drivers, according to the settlement documents.

But the companies “deducted” the sums from the driver´s pay, in violation of the law, said the documents. From 2014 to 2017, Uber “misrepresented” deductions for sales taxes and for the Black Car Fund program for drivers. Lyft employed a similar system to “shortchange” drivers, the statement from James said. The companies, further, “did not provide drivers with notices that accurately explained what drivers would earn,” said the settlement document.