Lyft and Uber Agree for Wage Theft Settlement in New York and Will Pay $328 Million

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Uber and Lyft are blamed for failing to provide mandatory sick leave with payment and withholding the salaries of drivers. In a statement from the office of Attorney General, Letitia James, both riding-hailing companies agreed to pay $328 million to settle the wage theft allegations.

In today’s latest BNN News, Lyft and Uber agreed to pay $38 million and $290 million, respectively. In a communiqué, AG’s office said it is the biggest wage theft settlement it has won so far. Over 100,000 affected drivers will receive the payment unlawfully withheld by ride-sharing companies. They are also eligible to receive other benefits agreed upon under the settlement pact. The affected drivers will receive communication via text, email, or mail about how to submit a claim for the withheld wages and benefits.

The settlement agreement ensures the payment of withheld payments to drivers

In a statement released from the James office, both Lyft and Uber have systematically cheated the drivers, who worked under challenging working conditions for several years. These companies have unlawfully withheld several hundreds of millions of dollars. The new wage theft settlement ensures payment and benefits for what they have earned so far. James will make sure that those working in companies contributing to the gig economy are protected and receive their benefits and wages as per their rights.

Resolves multi-year investigations

Multi-year investigations led to the settlement of benefits due to the drivers. In a standoff with US regulators, Uber and Lyft have resisted efforts to reclassify them as employees. Both companies even projected that most employees are opposed to classifying them as contractors or employees.

Uber will pay 3% of its revenues in the last quarter

According to information posted on the US news website, Uber has agreed to pay 3% of its revenues ($9.23 billion) earned in the last quarter to the drivers as per the new settlement. Lyft will pay 4% of the revenues ($1.02 billion) it earned in the past quarter. According to allegations from the AG office, the ride-sharing companies have deducted charges from the wages of drivers incorrectly instead of collecting them from passengers.

Uber wrongly deducted Black Car Fund fees and sales tax from the paychecks of drivers during 2014 and 2017. It misrepresented those deductions in terms of service. On the other hand, Lyft has collected administrative charges (11.4%), which are equal to black car fund fees and sales taxes, during 2015 and 2017 from the paychecks of drivers. As required under New York City and state law, Uber and Lyft failed to offer sick leaves with payment to the drivers.

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Guaranteed minimum hourly wages of $26 

The drivers from outside New York City will receive a minimum hourly pay of $26 from ridesharing companies as per the new agreement. The hourly pay may increase every year, adjusting for inflation. According to a statement from the office of the Attorney General, the minimum wage would apply from the start of the ride to its completion. As per the new regulations, drivers hailing from New York City will also be eligible for minimum guaranteed wages. The drivers in New York are also eligible for sick leave with pay.

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