Uber, Lyft To Pay $328 Million To Workers For Stealing Their Earnings

Uber – which provides ride-hailing services, food delivery, and freight transport – and Lyft – an American company offering ride-hailing services, vehicles for hire, motorized scooters, a bicycle-sharing system, and food delivery – have agreed to pay $328 Million under the largest wage-theft settlement. 

New York Attorney General Letitia James announced that the two companies unlawfully withheld wages from drivers. He announced two settlement funds totaling $328 million, saying that Uber and Lyft allegedly “cheated their drivers out of hundreds of millions of dollars” in earnings. 

The two companies allegedly withheld certain pay from drivers and prevented them from receiving benefits available to workers under New York labor laws. 

What can Uber and Lyft drivers expect?

Uber will pay $290 million and Lyft will pay $38 million to workers under the settlement. The money will be transferred to Uber and Lyft workers affected by the companies’ alleged practices. More than 100,000 drivers in New York could be eligible to receive the money under the settlement. 

The drivers can claim their money. The money will be distributed as back pay to current and former drivers of Uber and Lyft. 

The attorney general’s office said that Uber and Lyft drivers will now also receive guaranteed paid sick leave. Attorney General James said in a statement, “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’ office accused Uber of deducting sales tax and Black Car Fund fees from drivers’ payments and accused Lyft of similarly deducting an “administrative charge” from drivers’ payments. The two companies also failed to provide paid sick leave to drivers.

Uber and Lyft drivers living outside of New York City will also receive a guaranteed earning minimum of $26 per hour. For every 30 hours the drivers worked, they’ll be able to earn one hour of sick pay up to 56 hours per year. The drivers can request sick leave through the apps.

In June this year, Uber layoffs affected over 200 HRs. The job cuts affected less than 1% of Uber’s massive and international workforce. Uber’s decision to cut back on its recruitment division was also consistent with its overall cost-cutting plan.