New York’s Attorney General, Letitia James, has announced that ride-sharing giants Uber and Lyft will pay a combined total of $328 million to settle allegations of systematic wage theft and benefits violations against their drivers. This settlement marks the largest of its kind in the history of the Attorney General’s office, reported Reuters.
Uber has agreed to pay $290 million, while Lyft will pay $38 million to resolve the multi-year investigation into their labor practices. As part of the settlement, drivers will now be entitled to minimum hourly rates and paid sick leave. Additionally, they will receive improved support through notices and in-app chat services to address any questions or concerns about their earnings and working conditions.
According to Reuters, the investigation led by Attorney General Letitia James also tackled claims of improper tax and fee collection from New York drivers instead of passengers. Moreover, the companies’ practice of classifying drivers as independent contractors, rather than employees, came under scrutiny. Over 100,000 current and former drivers in the state will benefit from these settlements.
In response to the settlement, Letitia James stated, “These settlements will ensure they finally get what they have rightfully earned and are owed under the law.”
Uber and Lyft, both headquartered in San Francisco, have consistently denied any wrongdoing and consider these settlements a victory for drivers. Uber’s Chief Legal Officer, Tony West, called the settlement a model for other states and believes it helps resolve the classification issue. Lyft also maintained that it has always correctly classified its drivers as independent contractors.