Uber and Lyft, two major ride-sharing giants, have reached a historic settlement of $328 million in response to allegations of wage withholding and benefit denial, including mandatory paid sick leave for drivers. The groundbreaking resolution, announced by the New York State Attorney General’s office, follows a prolonged investigation prompted by a complaint lodged by the New York Taxi Workers Alliance (NYTWA) union. The union had accused these companies of engaging in wage theft and shifting tax burdens onto drivers rather than passengers. Notably, this settlement stands as the largest wage-theft resolution ever secured by the attorney general’s office.
Within this substantial settlement, Uber will bear the majority, contributing $290 million, while Lyft will provide $38 million to both current and former drivers. Moreover, as part of the agreement, Uber and Lyft have committed to establishing an “earnings floor,” guaranteeing a minimum hourly wage of $26 for drivers outside of New York City. Drivers within the city limits already have a minimum pay rate set due to New York City Taxi & Limousine Commission (TLC) regulations. Furthermore, the earnings floor will be subject to annual adjustments for inflation for all drivers.
In addition to the financial settlement and the introduction of a minimum pay rate, Uber and Lyft have pledged to offer guaranteed paid sick leave to their drivers. The companies are also promising enhanced transparency regarding hiring and earnings by informing drivers of the fares paid by riders after each trip, providing in-app chat support for drivers who are proficient in multiple languages, and establishing a mechanism for appealing deactivations from Uber and Lyft platforms.
The New York State Attorney General, Letitia James, stated, “For years, Uber and Lyft systematically deprived their hardworking drivers of hundreds of millions of dollars in wages and benefits, despite their relentless dedication under challenging conditions. These drivers predominantly hail from immigrant communities and rely on these jobs to support their families. These settlements will finally ensure they receive what is rightfully theirs under the law.”
Drivers will be notified through various channels, including mail, email, or text messages, about the distribution of funds and instructions on how to file claims.
Bhairavi Desai, the executive director of NYTWA, who had been instrumental in advocating for loan forgiveness for cab drivers with medallions, celebrated the Uber and Lyft settlement as “a historic victory.” She expressed, “For years, our union has fought to recover the wages stolen from New York City Uber and Lyft drivers, who were denied better living conditions, timely meals, rest, and leisure. We are proud to be the union that champions the rights of New York City drivers and grateful to Attorney General Letitia James for her unwavering support, belief in our complaint, and understanding of the urgency of this recovery.”
Jeremy Bird, Lyft’s Chief Policy Officer, hailed the payout as “a victory for drivers” in a statement , emphasizing the expansion of portable benefits for drivers in New York.
This landmark settlement signifies a significant step towards rectifying longstanding issues within the ride-sharing industry, ensuring that drivers receive fair compensation and benefits.