Uber, Lyft to pay $328 mn to drivers in wage-theft settlement

In a significant development, Uber and Lyft on Thursday agreed to pay a combined $328 million to settle charges that the ride-hailing platforms “unlawfully withheld wages from drivers”, and failed to provide mandatory paid sick leave to them.

In the settlement with New York Attorney General Letitia James, Uber will pay $290 million and Lyft will pay $38 million, touted as the largest wage-theft settlement for the AG’s office, reports CNBC.

“For years, Uber and Lyft systemically cheated their drivers out of hundreds of millions of dollars in pay and benefits while they worked long hours in challenging conditions,” James said in a statement.

“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,” she added.

In a blog post, Uber said that the agreement is a win for drivers across New York State who can now enjoy both the flexibility that is so important to them, “while also having new benefits and protections like a minimum earnings standard and paid sick leave”.

Drivers outside of NYC will earn at least $26/hour while en route to a rider or with a rider in the vehicle (NYC drivers have had an earnings standard for many years, which will remain in place). Drivers in New York will receive up to 56 hours of paid sick leave per year, said the company.

Lyft said in a statement that it expects to pay about $20 million of the settlement in its fourth quarter, with the rest in 23 monthly payments. “New York has long been a leader in providing drivers portable benefits through flexible earning opportunities with its Black Car Fund, and this agreement expands upon that foundation,” Lyft Chief Policy Officer Jeremy Bird said.