NY Reclaims $328M Of Earnings 'Cheated' From Drivers By Uber, Lyft

NEW YORK — New York Attorney General Letitia James has secured $328 million from Uber and Lyft for taking earnings from drivers. The companies have also agreed to new protections and benefits for their drivers.

James today announced two landmark settlements totaling $328 million with rideshare companies Uber and Lyft for cheating drivers out of hundreds of millions of dollars.

The settlements resolve multi-year investigations into Uber and Lyft, which determined that the companies' policies withheld pay from drivers and prevented them from receiving valuable benefits available under New York labor laws.

The settlements announced today will return $328 million in back pay to drivers and institute a minimum driver "earnings floor," paid sick leave, proper hiring and earnings notices, and other protections for drivers.

Uber will pay $290 million and Lyft will pay $38 million into two separate settlement funds which will be entirely distributed to current and former drivers, according to the AG.

"Rideshare drivers work at all hours of the day and night to take people wherever they need to go," 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. These drivers overwhelmingly come from immigrant communities and rely on these jobs to provide for their families. These settlements 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."

Eligible drivers can file a claim to receive the funds they are owed. Notices concerning the distribution will be delivered to drivers by mail, email and/or text message, the Office of the Attorney General said. Information on the submission, review, and distribution of claims is also available on the Office of the Attorney General’s (OAG) website.

From 2014 to 2017, Uber deducted sales taxes and Black Car Fund fees from drivers' payments when those taxes and fees should have been paid by passengers, the AG said. Uber misrepresented the deductions made to drivers' pay in their terms of service, telling drivers that Uber would only deduct its commission from the drivers' fare, and that drivers were "entitled to charge [the passenger] for any tolls, taxes or fees incurred," though no method to do this was ever provided via the Uber Driver app.

Lyft employed a similar method to shortchange drivers from 2015 to 2017, deducting a 11.4 percent "administrative charge" from drivers' payments in New York equal to the amount of sales tax and Black Car Fund fees that should have been paid by riders.

Both Uber and Lyft also failed to provide drivers with paid sick leave available to employees under New York City and New York state law.

"I’m the father of four beautiful children and I started driving for Uber in 2011 because it seemed like a good way to support my family," Ishtiaq Ahmed, a NYTWA member and Uber driver, said of the settlement. "At first the money was good and Uber only took a small commission. Then Uber started taking more and more from our pay and my income got lower and lower. I noticed that something didn’t look right and that Uber was taking sales tax and another customer surcharge from my pay — making the drivers pay instead of customers. I showed my pay receipts to fellow drivers at my mosque, we shared with each other in Facebook groups and on WhatsApp. When we realized Uber was taking this money from all of us, we brought it to our union, the New York Taxi Workers Alliance. That’s when we started our fight to win back the millions Uber stole from drivers. Now, with the help of Attorney General Letitia James, we’re finally seeing justice."

In addition to paying a total of $328 million in back pay to former drivers, under the settlements, Uber and Lyft have agreed to an "earnings floor," guaranteeing drivers across the state are paid a minimum rate from dispatch to completion of the ride. Drivers outside of New York City will receive a minimum of $26 per hour, adjusted annually for inflation, ensuring for the first time that the thousands of Uber and Lyft drivers working primarily outside of New York City will be guaranteed minimum pay. Drivers operating in New York City already receive minimum driver pay under regulations established by the Taxi & Limousine Commission (TLC) in 2019.

Political leaders outside of the state's largest city said the new rules will make an immediate impact in workers' lives.

"Through this settlement, Attorney General James has shown a commitment to hardworking rideshare drivers who were cheated out of their rightful earnings," Westchester County Executive George Latimer said. "These settlements not only provide much-needed compensation but also introduce essential benefits, including paid sick leave and minimum pay. Letitia James continues to be a champion for workers' rights, and we applaud her relentless pursuit of justice on behalf of New Yorkers."

According to the settlement, Uber and Lyft drivers will now also receive guaranteed paid sick leave. Drivers will earn one hour of sick pay for every 30 hours worked, up to a maximum of 56 hours per year. Drivers completing rides outside of New York City will be paid a minimum of $26 per hour for sick leave, adjusted annually for inflation. To reflect the New York City minimum driver pay rules that already include an amount for paid time off, drivers completing trips covered by the TLC minimum driver pay rules will be compensated at $17 per hour for sick leave, adjusted annually for inflation. Uber and Lyft will also make updates to their apps to allow drivers to request sick leave through the apps.

Uber and Lyft will also provide drivers with proper hiring notices and earnings statements. The hiring notices will accurately explain the earnings to which drivers are entitled for their work, and the earnings statements will accurately detail the compensation earned for each pay period. The companies will also notify drivers after each ride of the amount paid by the rider. The companies will provide in-app chat support for drivers in multiple languages so they can easily ask questions about their earnings or other work conditions. In addition, drivers will now be able to appeal all deactivations from the Uber and Lyft platforms.

"New Yorkers deserve every dollar they have worked for, plus the benefits they are legally entitled to," said State Senator Pete Harckham. "That includes drivers for ride share companies, who were systematically deprived of income, benefits, and important information about their employment. This settlement Attorney General James has won for rideshare drivers shows New York stands for fair wages and proper treatment of its hard-working residents."

More than 100,000 drivers throughout New York stand to receive settlement funds and the benefits afforded to them under these historic settlements. As a result, these agreements will have a major impact on the economic lives of rideshare drivers, who are predominantly immigrants and often the main source of income for their families. Surveys have shown that in New York City, nine out of ten drivers are immigrants, two-thirds work full-time as drivers, and more than half are the primary breadwinners in their households.

"I applaud Attorney General James for the tenacious and principled efforts that brought about this settlement," Assemblymember Chris Burdick said, praising the settlement. "This brings justice to New York's Uber and Lyft drivers, many of whom work an untold number of hours to make better lives for themselves and their families."