Uber CEO Dara Khosrowshahi is interviewed on the buying and selling flooring on the New York Inventory Change (NYSE) in New York, August 2, 2022.
Andrew Kelly | Reuters
Uber and Lyft agreed to pay a mixed $328 million to settle allegations the ride-hailing firms unlawfully withheld wages from drivers and failed to offer necessary paid sick depart in New York state, Lawyer Normal Letitia James’ workplace mentioned Thursday.
Uber pays $290 million and Lyft pays $38 million. The state AG’s workplace mentioned it is the most important wage-theft settlement it is gained.
The cash will go to drivers affected by the businesses’ alleged practices. Greater than 100,000 drivers in New York could possibly be eligible to obtain the funds and advantages secured beneath the agreements, James’ workplace mentioned. Drivers will likely be notified by mail, e mail or textual content about methods to file a declare.
“For years, Uber and Lyft systemically cheated their drivers out of a whole lot of thousands and thousands of {dollars} in pay and advantages whereas they labored lengthy hours in difficult situations,” James mentioned in a press release. “This settlement will guarantee they lastly get what they’ve rightfully earned and are owed beneath the legislation. My workplace will proceed to be sure that firms working within the so-called ‘gig financial system’ don’t deprive staff of their rights or undermine the legal guidelines meant to guard them.”
The settlements, which resolve multiyear investigations, mirror the businesses’ newest concessions in a standoff with regulators throughout the nation concerning the stage of oversight they need to obtain and what they owe their drivers. Uber and Lyft have beforehand fought efforts to reclassify their staff from contractors to workers, for instance, a change they mentioned most of their staff opposed.
Uber’s settlement represents greater than 3% of the $9.23 billion in income it generated final quarter. And Lyft’s settlement comes to just about 4% of the $1.02 billion in income it reported.
The businesses additionally agreed to ongoing modifications in how they pay drivers and supply advantages within the Empire State.
The AG’s workplace alleged the businesses incorrectly deducted prices from drivers’ wages that ought to have as an alternative been charged to passengers. For instance, the workplace mentioned that from 2014 to 2017 Uber deducted gross sales taxes and Black Automobile Fund charges from drivers’ paychecks and misrepresented that it will achieve this in its phrases of service. And Lyft, the AG alleged, deducted an 11.4% administrative cost that equaled the quantity of the gross sales tax and Black Automobile Fund charges between 2015 and 2017.
Each firms additionally failed to offer paid sick depart as required beneath state and New York Metropolis legislation, James alleged.
Beneath the agreements, Uber and Lyft will likely be required to offer drivers outdoors of New York Metropolis a assured incomes minimal of $26 per hour, which will likely be adjusted annually for inflation. The minimal charge would apply from “dispatch to completion of the journey,” in line with a press launch from the AG’s workplace. Drivers in New York Metropolis already obtain assured minimal earnings beneath native rules.
Drivers additionally will get assured paid sick depart in New York state. For each 30 hours labored, they’re going to be capable to earn one hour of sick pay as much as 56 hours per yr, the AG’s workplace mentioned. Each firms will make updates so drivers can request sick depart via the apps, in line with the press launch.
Uber and Lyft additionally agreed to offer drivers compensation breakdowns, the AG’s workplace mentioned. The businesses must notify drivers how a lot a rider paid for every journey and provides drivers an in-app chat instrument to debate earnings and work situations. Uber and Lyft additionally should permit drivers to attraction deactivation from their platforms.
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