By NYAG Pres | November 2, 2023
Uber to Pay $290 Million and Lyft to Pay $38 Million in Largest Wage Theft Settlement
As Part of the Settlement, Drivers Will Also Receive
NEW YORK – New York Attorney General Letitia 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 found that the companies’ policies withheld hard-earned 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 improvements in drivers’ working conditions. 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.
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. Information on the submission, review, and distribution of claims is also available on the Office of the Attorney General’s (OAG) website.
“Rideshare drivers work at all hours of the day and night to take people wherever they need to go,” said Attorney General James. “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.”
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. 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. Uber and Lyft also failed to provide drivers with paid sick leave available to employees under New York City and New York state law.
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.
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.
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.
“We are thrilled that our members won this historic victory to recover their stolen income,” said New York Taxi Workers Alliance (NYTWA) Executive Director Bhairavi Desai. “For years, our union has been fighting to recover stolen wages for New York City Uber and Lyft drivers who were cheated out of better living conditions, timely meals, rest, and leisure. We’re proud to be the union that fights for New York City drivers, and we’re thankful to Attorney General Letitia James, who stood by workers, believed in our complaint, and understood the urgency of this recovery. We congratulate NYTWA’s legal team that uncovered the wage theft and pursued legal action, the Attorney General’s Labor Bureau who worked diligently on the settlements, Attorney General Letitia James whose leadership brought us to triumph, and our members whose refusal to give up made this day possible.”
“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,” said Ishtiaq Ahmed, a NYTWA member and Uber driver. “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.”
“I feel so blessed that Attorney General Letitia James pursued these settlements and that my union, the New York Taxi Workers Alliance, fought so long and hard to protect drivers from these bully companies,” said Malang Gassama, NYTWA member and former Uber and Lyft driver. “I’ve calculated that Uber and Lyft took at least $25,000 from my pay that they shouldn’t have in the form of sales tax and the Black Car Fund surcharge. With that money I could have helped my wife open the business she dreamed about. I could have bought property and sent more money to my family back home in Africa. I could have kept my kids in the karate lessons they loved that we had to pull them from because we couldn’t afford the expense. Uber and Lyft stole those opportunities from my family and from the families of thousands of other New York City drivers.”
“I commend our New York State Attorney General Letitia James for ensuring Uber and Lyft fairly compensate their drivers,” said State Senator Monica R. Martinez. “These rideshare companies have systematically taken advantage of their workers by withholding wages and denying basic needs such as fair pay and paid sick leave. These settlements ensure the protection of workers’ rights and provides thousands of hardworking New Yorkers with the means to live and support their families without the worry of unscrupulous behavior by management.”
“In holding Uber and Lyft accountable for exploitative policies, today’s settlements mark a significant victory for our gig economy workers who are too often overlooked,” said State Senator Kevin Thomas. “I applaud Attorney General James for securing improvements to driver working conditions that’ll guarantee an earnings floor and paid sick leave as part of these settlements. This is a resounding win for the hardworking drivers that are equally as entitled to the fair labor practices and benefits afforded to all workers in New York.”
“These settlements mark a pivotal step forward in ensuring fair treatment for gig workers across our state,” said Assemblymember Michaelle Solages, Chair of the Black, Puerto Rican, Hispanic, and Asian Legislative Caucus. “An earnings floor, paid sick leave, and addressing withholding practices demonstrate our commitment to prioritizing the welfare of hardworking drivers. “I commend Attorney General Letitia James for her dedication to the people and for taking a stand on behalf of these drivers, who play a critical role in our economy. This is a big win for drivers, and it sets a precedent for the rideshare industry.”
“All workers deserve dignity, equity, and the opportunity to succeed,” said Assemblymember Harry B. Bronson, Chair of Assembly Committee on Economic Development, Job Creation, Commerce, and Industry. “Through these landmark settlements and provisions secured from Uber and Lyft, Attorney General James has sent a strong message about the importance of economic justice. Workers deserve protections against wage theft and unfair practices, and here in New York we are committed to ensuring that every worker has the same opportunity to succeed.”
“The announcement of these landmark settlements by Attorney General James is a great day for the hardworking drivers of Uber and Lyft in the state of New York,” said Assemblymember Taylor Darling. “No one should ever have to work hard every week to only be cheated by their employer. These settlements mark a victory for ride-share drivers, and sets a precedent for fair pay and treatment for those drivers in the transportation industry.”
“I applaud the diligent efforts of Attorney General Letitia James and her team in securing these significant settlements with Uber and Lyft,” said Assemblymember Kimberly Jean-Pierre. “These are landmark agreements that not only rectify the wrongs committed against drivers, but also set a new standard for fairness and respect in the gig economy. By guaranteeing a minimum earnings floor, paid sick leave, and improved working conditions, we are ensuring that the couriers who have been undervalued can enjoy the respect and economic security they deserve. We are all sending a powerful message: New York state stands firmly behind workers’ rights, regardless of their employment model. This is a testament to the strength of our labor laws and the commitment of our state to protecting the interests of hardworking New Yorkers, and I’m looking forward to continuing this work with my colleagues in the legislature and the Attorney General’s office.”
“Thank you to Attorney General Letitia James for negotiating these settlements with Uber and Lyft,” said Assemblymember Charles Lavine. “It ensures that drivers not only receive the pay and benefits they had been denied but will additionally have better opportunities to make a living and experience improved working conditions.”
“For far too long companies like Uber and Lyft have taken advantage of their workers by improperly deducting fees from their drivers and avoiding minimum driver pay,” said Assemblymember Gina Sillitti. “The settlements announced today by the Attorney General are crucial steps toward addressing the long-standing issue of inadequate compensation for rideshare drivers, ensuring they receive fair and equitable pay for their hard work. These settlements not only promotes economic justice but also enhances the quality of service for passengers by attracting and retaining skilled and motivated drivers.”
Attorney General James would like to thank the New York Taxi Workers Alliance for bringing this matter to the office.
This matter was handled by Labor Bureau Chief Karen Cacace, Deputy Bureau Chief Young Lee, Civil Enforcement Section Chief Fiona Kaye, Assistant Attorneys General in the Labor Bureau Mary Hughes, Lawrence Reina, Jessica Agarwal, Eric Eingold, Erika Vera Livas, Attorney General Fellow Abigail Ramos, Deputy Director of Research and Analytics Gautam Sisodia, as well as former Assistant Attorney General Amanda Meyer, former Civil Enforcement Section Chief Ming-Qi Chu, former Data Scientist Chansoo Song, and former legal interns. Attorney General James would also like to acknowledge the invaluable work of the late Jonathan Werberg, former Director of Research and Analytics, without whose assistance this resolution would not have been possible. The Labor Bureau is a part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.