Investigation leads to Uber, Lyft agreement to pay $328M to New York drivers

(The Center Square) — Uber and Lyft will pay $328 million to resolve allegations that they improperly charged New York drivers taxes and fees that passengers should have picked up, Attorney General Letitia James announced Thursday.

The agreement will also set a minimum earnings floor for drivers, provide paid sick leave, hiring and earnings notices and other improvements in drivers' working conditions. Uber will pay $290 million, and Lyft will pay $38 million into two separate settlement funds distributed to drivers, the AG's office said.

James said an investigation by the AG's office determined that 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."

"These drivers overwhelmingly come from immigrant communities and rely on these jobs to provide for their families," she said in a statement. "These settlements will ensure they finally get what they have rightfully earned and are owed under the law."

Under the settlement terms, drivers will earn one hour of sick pay for every 30 hours worked, up to a maximum of 56 hours per year. Drivers outside of New York City will be paid $26 per hour under the deal. Uber and Lyft drivers in the Big Apple already get a $17.96 minimum wage under a 2019 city ordinance.

"We are thrilled that our members won this historic victory to recover their stolen income," Bhairavi Desai, executive director of the New York Taxi Workers Alliance said in a statement.

"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," he said.

Under the settlement, the AG's office will drop its investigation of Uber's and Lyft's classification of drivers as independent contractors instead of employees, which has been the subject of numerous lawsuits in New York and dozens of states.

Tony West, Uber's chief legal officer, called the agreement a "win" for the company's New York drivers "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."

"This helps put to rest the classification issue in New York and moves us forward with a model that reflects the way people are increasingly choosing to work."

Lyft issued a statement saying the agreement "prioritizes the benefits drivers want without sacrificing the independence and flexibility they need."