Uber and Lyft have agreed to pay a total of $328 million in what is being called the largest settlement for wage theft in New York. The prosecution accused both ride-hail platforms of systematically scamming their drivers for years.
New York Attorney General Letitia James announced the settlement on Thursday. Uber will pay $290 million, while Lyft will pay $38 million. The money will be returned to over 100,000 drivers who were affected by the wage theft.
In addition to the monetary compensation, drivers for these apps in New York will now receive several benefits, including paid sick days and minimum wage.
According to the Prosecutor’s Office statement, Uber deducted sales taxes and fees from driver payments between 2014 and 2017 that should have been paid by passengers. Lyft, on the other hand, used a similar method to defraud drivers in New York by deducting an 11.4% “administration fee” from their payments from 2015 to 2017.
The investigation conducted by the Prosecutor’s Office revealed that these practices allowed the platforms to withhold drivers’ hard-earned wages and prevent them from receiving valuable benefits under New York labor laws.
Many of the affected drivers come from immigrant communities and rely on these jobs to support their families. Attorney General James emphasized that these agreements will ensure that drivers finally receive what they rightfully earned and are owed under the law.
Furthermore, she asserted that her office will continue to safeguard the rights of workers and prevent companies in the so-called “collaborative economy” from depriving their employees of their rights or undermining labor laws meant to protect them.
This settlement serves as a significant victory for the drivers and highlights the ongoing need for continued vigilance to ensure fair treatment and compensation within the gig economy.