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Uber, Lyft to pay $328M settlement to drivers for 'taking earnings'

Uber and Lyft settled investigations into whether they took pay from drivers for a price tag of $328 million.
Uber, Lyft to pay $328M settlement to drivers for 'taking earnings'
Posted at 6:22 PM, Nov 03, 2023

Hundreds of thousands of Uber and Lyft drivers may be eligible for a piece of a $328 million pie after the two companies agreed to what New York's state attorney general called the largest wage-theft settlement her office has ever secured.

Attorney General Letitia James announced the two "landmark" settlements Thursday, saying this resolves multi-year investigations into whether the companies cheated drivers out of hundreds of millions of dollars. 

In those investigations, James' office alleged that from 2014 to 2017 Uber deducted sales tax and Black Car Fund — New York's surcharge to provide workers benefits — fees from driver payments when they should have been paid for by passengers. It also alleges Lyft deducted 11.4% "administrative charges" from drivers' payments from 2015 to 2017 that amount to fees riders should have paid.

Now Uber will pay $290 million and Lyft $38 million into two separate settlement funds, which will be distributed to current and former drivers of the companies. 

The settlement also establishes paid sick leave, proper hiring and earnings notices, improved driver working conditions and a minimum driver "earnings floor," James' office said. This means drivers across the state will be paid a minimum rate from dispatch to completion of the ride.

SEE MORE: Uber raises driver minimum age in this state because of insurance cost

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

More than 100,000 New York drivers are expected to receive funds from the settlement. 

Eligible drivers can file a claim to receive the back paid funds, though notices are expected to be delivered by phone or mail to them, too.

In a statement, Lyft's chief policy officer, Jeremy Bird, said, "This is a win for drivers, and one we are proud to have achieved with the New York Attorney General's Office." Uber's chief legal officer also called it a "win for drivers" and their flexibility across the state.

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