Internet taxi companies Uber and Lyft will pay a combined $328 million to settle a lawsuit over wage theft in New York, state Attorney Letitia James said Thursday.
James said this resolves investigations into companies that improperly charged drivers sales taxes and other costs that customers should rightfully pay.
Uber will pay $290 million and Lyft $38 million. The money will be distributed between active and retired drivers, she said. The companies have also agreed to provide drivers outside of New York City with paid sick leave and a minimum wage of $26 an hour.
“Drivers work at all hours of the day and night to get people where they need to go,” James said in a statement. “For years, Uber and Lyft systematically defrauded their drivers by depriving them of hundreds of millions of dollars in wages and benefits while they worked long hours in unsafe conditions.”
Tony West, legal manager for Uber, said the agreement “resolves the classification problem in New York and moves us forward with a model that reflects the way more and more people choose to work.”
On behalf of Lyft, director Jeremy Bird said that “this is a victory for drivers and we are proud to have achieved it with the New York Attorney’s Office.”
Uber and Lyft have become a presence in New York in recent years, as user-friendly apps have largely replaced the iconic yellow taxis. Companies have been slow to adapt to rules governing taxi services in cities like New York and have been reluctant to give drivers basic job protections and benefits.
New York was the first city in the country to establish a minimum wage for these drivers, classified as independent contractors in the so-called collaborative economy (gig economy). The city has also mandated a minimum wage for food delivery services like Uber Eats.
“We have waited eight long years to get justice for our members, a workforce that was deceitfully deprived of better living conditions, meal times and rest because the profits that would have given them that life were stolen by multi-billion dollar corporations,” said the New York Taxi Workers Alliance executive director Bhairavi Desai said in a statement.
