U.S. News
Uber, Lyft to pay $328M to settle NY wage theft claims
By Jake Beardslee · November 2, 2023
In brief…
- Uber to pay $290 million, Lyft to pay $38 million to settle NY wage theft probe
- Over 100K drivers to receive compensation from settlement funds
- NY AG accused companies of improperly deducting taxes and fees from driver pay
- Settlement includes minimum hourly pay, paid sick leave for drivers going forward
- Largest wage theft settlement secured by NY Attorney General's office
Rideshare giants Uber and Lyft have agreed to pay a combined $328 million to settle allegations of wage theft from drivers in New York State, according to an announcement from Attorney General Letitia James on Thursday.
Over 100,000 current and former Uber and Lyft drivers in New York will receive compensation from the settlements. Uber will pay $290 million and Lyft will pay $38 million after being accused of improperly deducting taxes and fees from driver earnings over several years.
Attorney General James said the companies had “systematically cheated” drivers out of pay and benefits. She stated that Uber’s violations occurred from 2014-2017, while Lyft’s spanned 2015-2017.
James accused the companies of deducting sales taxes and fees for a workers’ compensation fund from driver payments instead of adding them to passenger fares as required. As a result, “these drivers overwhelmingly come from immigrant communities and rely on these jobs to provide for their families,” said James.
The attorney general called the resolution the “largest wage theft settlement” her office has secured. In addition to the payout, Uber and Lyft have agreed to provide hourly pay rates, paid sick leave, and better communication to drivers about earnings and working conditions moving forward.
James alleged that Uber and Lyft denied drivers sick leave they were entitled to under state and New York City laws by classifying them as independent contractors instead of employees.
Under the settlement, drivers outside NYC will now receive a minimum of $26 per hour for rides and sick leave with annual inflation adjustments. NYC drivers already get minimum pay and some paid time off. They will receive $17 per hour for sick leave with inflation adjustments.
Bhairavi Desai, Executive Director of the New York Taxi Workers Alliance, said in a statement that the union had 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.” The alliance represents over 21,000 drivers in the state.