Uber CEO Dara Khosrowshahi is interviewed on the buying and selling flooring on the New York Stock Exchange (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, Attorney General Letitia James’ workplace stated Thursday.
Uber can pay $290 million and Lyft can pay $38 million. The state AG’s workplace stated it is the most important wage-theft settlement it is received.
The cash will go to drivers affected by the businesses’ alleged practices. More than 100,000 drivers in New York could possibly be eligible to obtain the funds and advantages secured beneath the agreements, James’ workplace stated. Drivers will likely be notified by mail, e mail or textual content about how you can file a declare.
“For years, Uber and Lyft systemically cheated their drivers out of hundreds of millions of dollars in pay and benefits while they worked long hours in challenging conditions,” James stated in an announcement. “This settlement will ensure they finally get what they have rightfully earned and are owed under the law. My office will continue to make sure that companies operating in the so-called ‘gig economy’ do not deprive workers of their rights or undermine the laws meant to protect them.”
The settlements, which resolve multiyear investigations, mirror the businesses’ newest concessions in a standoff with regulators throughout the nation in regards to the stage of oversight they need to obtain and what they owe their drivers. Uber and Lyft have beforehand fought efforts to reclassify their employees from contractors to workers, for instance, a change they stated most of their employees 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 almost 4% of the $1.02 billion in income it reported.
The firms additionally agreed to ongoing adjustments in how they pay drivers and provide advantages within the Empire State.
The AG’s workplace alleged the businesses incorrectly deducted fees from drivers’ wages that ought to have as a substitute been charged to passengers. For instance, the workplace stated that from 2014 to 2017 Uber deducted gross sales taxes and Black Car Fund charges from drivers’ paychecks and misrepresented that it will accomplish that 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 Car Fund charges between 2015 and 2017.
Both firms additionally failed to offer paid sick depart as required beneath state and New York City legislation, James alleged.
Under the agreements, Uber and Lyft will likely be required to offer drivers outdoors of New York City a assured incomes minimal of $26 per hour, which will likely be adjusted annually for inflation. The minimal price would apply from “dispatch to completion of the ride,” in line with a press launch from the AG’s workplace. Drivers in New York City 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 of earn one hour of sick pay as much as 56 hours per yr, the AG’s workplace stated. Both firms will make updates so drivers can request sick depart by the apps, in line with the press launch.
Uber and Lyft additionally agreed to offer drivers compensation breakdowns, the AG’s workplace stated. The firms should notify drivers how a lot a rider paid for every journey and provides drivers an in-app chat device to debate earnings and work situations. Uber and Lyft additionally should enable drivers to enchantment deactivation from their platforms.
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