Uber, Lyft to pay $328 million in New York settlement

Following an investigation from Letitia James, the attorney general of New York , Uber and Lyft will have to pay a settlement of $328 million. Uber owes more than Lyft, with their share of the settlement being $290 million, and Lyft’s share being $38 million. The purpose of the settlement is to rectify the wage theft and lack of benefits that drivers have had to cope with while working as independent contractors under the ride-share companies.

The attorney general’s investigation started when the New York Taxi Workers Alliance provided concerns of Uber and Lyft exploiting their drivers as contract workers, rather than paying drivers as employees, since there are different regulations depending on how they are categorized. The group represents around 21,000 Uber, Lyft, cab, taxi, and company car drivers. Both companies were accused of forcing their drivers to pay for their passenger’s sales tax by deducting it from their income. Drivers were also denied sick days, despite the legal requirement under New York state and city law. While their actions have not occurred recently, the violations were carried out over years; Uber’s spanned from Nov. 2014 to May 2017, and Lyft’s from Oct. 2015 to July 2017.

Drivers for Lyft and Uber will be paid more than before, a minimum of $17 an hour in New York City, and $26 an hour in the rest of New York. Additionally, Uber guarantees paid sick leave for up to 56 hours per year, meanwhile Lyft has not disclosed their paid leave. “[This settlement] will serve as a model for other states, demonstrating that when we work together with legislators and regulators, we can resolve these issues in a way that benefits workers and consumers alike,” Tony West, Uber’s Chief Legal Officer, said in a blog post.