New York state to receive $328 million in settlement from Uber and Lyft over wage-theft allegations.

• In New York state, Uber and Lyft reached a $328 million settlement with authorities over accusations that they violated wage laws and did not provide required sick leave to drivers.
• In addition to the initial agreement, the companies also committed to continuous modifications in their driver compensation and benefit packages in the state.
• The largest wage-theft settlement won by the attorney general's office was recently announced.

The ride-hailing companies have agreed to pay a combined $328 million to settle allegations that they unlawfully withheld wages from drivers and failed to provide mandatory paid sick leave in New York state, according to Attorney General Letitia James' office.

The largest wage-theft settlement won by the state AG's office is $290 million, paid by Uber, and $38 million, paid by Lyft.

Over 100,000 drivers in New York may be eligible to receive funds and benefits under the agreements, as announced by James' office. Notifications about how to file a claim will be sent via mail, email, or text to the affected drivers.

James stated that for years, Uber and Lyft systematically cheated their drivers out of hundreds of millions of dollars in pay and benefits while working long hours in challenging conditions. The settlement will ensure that they finally receive what they are owed under the law. My office will continue to ensure that companies operating in the gig economy do not deprive workers of their rights or undermine the laws meant to protect them.

The settlements, which end long-standing investigations, show Uber and Lyft's latest concessions in their ongoing battle with regulators nationwide over the level of supervision they should receive and the compensation their drivers deserve. These companies have previously resisted efforts to reclassify their workers as employees, a change that many of their workers opposed.

Uber's settlement accounts for over 3% of its $9.23 billion revenue in the last quarter, while Lyft's settlement is close to 4% of its $1.02 billion revenue.

In addition to the initial agreement, the companies also committed to continuous modifications in their driver compensation and benefit packages in New York.

The AG's office claimed that the companies incorrectly deducted charges from drivers' wages that should have been charged to passengers. For instance, the office stated that from 2014 to 2017, Uber deducted sales taxes and Black Car Fund fees from drivers' paychecks and misrepresented that it would do so in its terms of service. Additionally, the AG alleged that Lyft deducted an 11.4% administrative charge that equaled the amount of the sales tax and Black Car Fund fees between 2015 and 2017.

James alleged that both companies failed to provide paid sick leave as mandated by state and New York City law.

Under the agreements, Uber and Lyft will be mandated to ensure that drivers outside of New York City receive a guaranteed minimum hourly wage of $26. This rate will be adjusted annually for inflation. The minimum wage would apply from the moment a ride is dispatched until its completion, as stated in a press release from the AG's office. Drivers in New York City already receive guaranteed minimum earnings under local regulations.

In New York state, drivers will receive guaranteed paid sick leave. For every 30 hours worked, they can earn one hour of sick pay, up to a maximum of 56 hours per year, as stated by the AG's office. Both companies will update their apps to allow drivers to request sick leave.

Uber and Lyft have agreed to provide drivers with compensation breakdowns, notify them of the amount a rider paid for each ride, and offer an in-app chat tool for discussing earnings and work conditions. Additionally, the companies must allow drivers to appeal deactivation from their platforms.

Both Uber and Lyft declared the agreements with the AG as a victory in their statements after the announcement, and both maintained their innocence.

The New York Attorney General's Office has agreed to expand the benefits provided to drivers through the Black Car Fund, which is a leader in providing portable benefits. This agreement is a win for drivers and one that Lyft is proud to have achieved. The company's chief policy officer, Jeremy Bird, stated in a statement that the agreement expands upon the foundation of providing drivers with flexible earning opportunities. He added that the company looks forward to continuing this work to provide New York drivers with the independence and full range of benefits available to those in other states, such as California and Washington.

Drivers in New York State will benefit from a new agreement that offers flexibility, as well as new advantages and safeguards, including a minimum wage and paid sick leave, according to Uber's blog post.

Lyft stated in a blog post that the event is not expected to have a significant impact on its profit and loss statement, and the settlement agreement was accrued in Q2 of 2023. The company anticipates paying approximately $20 million of the settlement in the fourth quarter, with the remaining amount paid in 23 monthly installments.

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