(qlmbusinessnews.com Tues, 7th Nov, 2023) London, UK —
Uber and Lyft, the ride-sharing giants, have agreed to pay a significant sum of £269 million to settle allegations of systematically underpaying New York drivers. This settlement marks the resolution of a lengthy investigation by the New York attorney general, and she has described it as the largest wage theft settlement in her office's history. Notably, the agreement also means that drivers in the state will receive guaranteed paid sick leave.
Uber, in particular, has celebrated this settlement, referring to it as a “landmark,” while Lyft, its counterpart, stated that it was “a win for drivers.” Importantly, neither company is required to admit fault as part of this agreement, with Uber agreeing to pay £290 million and Lyft agreeing to pay £38 million. Both companies have denied any wrongdoing and have praised the announcement.
The issues at the heart of this settlement relate to the debate over whether ride-sharing apps operating within the “gig economy” should classify drivers as employees or self-employed workers. The New York attorney general, Letitia James, expressed her concerns regarding how Uber and Lyft had allegedly cheated their drivers out of pay and benefits over many years. Her office conducted an investigation into claims that these companies had improperly deducted taxes and fees from New York drivers, rather than their passengers, between 2014 and 2017. The investigation also highlighted allegations that both companies had failed to provide drivers with paid sick leave, which employees are entitled to under New York law.
These allegations impacted over 100,000 individuals, primarily from immigrant communities, who relied on these driving jobs to support their families. The settlement is now set to ensure that they receive what they have rightfully earned and are owed under the law.
Uber also disclosed that it would contribute an undisclosed amount to New York State's unemployment insurance fund, ensuring that drivers and delivery workers have access to unemployment benefits if they are out of work. The agreement will implement rules where New York City drivers receive up to 56 hours of paid sick leave annually. For Uber drivers outside of New York, they will be entitled to one hour of sick leave at full pay for every 30 hours worked, and a minimum wage of at least £26 per hour will be in place.
Lyft drivers outside of New York City will also earn a minimum of £26 per hour for “engaged time,” and all New York Lyft drivers will be eligible to accrue paid sick leave. Both companies consider this settlement to be a victory for their drivers, and the implications of this landmark agreement are likely to resonate within the ride-sharing industry and beyond.
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