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Uber Technologies, Inc. and Lyft, Inc. agreed to settle the dispute over alleged wage theft involving drivers in New York. The ride-hailing companies will pay a combined total of $328 million to settle the case.
New York's attorney general filed the case against Uber and Lyft after claiming that the two systematically cheated their respective drivers out of pay and benefits.
Attorney General Letitia James shared that Uber is set to pay $290 million while Lyft will settle the rest, amounting to $38 million for the resolution of her office's multiple-year investigation into the firms. James said this case is the largest wage theft settlement in her office.
The Issue with Wage, Driver Classification, and Fees Collection
According to Reuters, aside from the settlement, drivers are also guaranteed minimum hourly rates plus paid sick leave. They will also be provided with notices and in-app chat support that will allow them to easily address any concerns or questions about their earnings and working conditions.
"These settlements will ensure they finally get what they have rightfully earned and are owed under the law," the attorney general said in a statement.
James' office looked into the claims of Uber and Lyft drivers and worked to address the allegations that the firms improperly collected taxes and fees from drivers working in New York. These fees are supposed to be paid by passengers, but the drivers were charged instead. The AG also tackled the issue of the companies' practice of listing drivers as independent contractors rather than employees.
Benefits and Distribution of the Settlement
With the settlement, it was reported that more than 100,000 current and former drivers in New York are eligible to benefit from the settlements with Uber and Lyft.
"Rideshare drivers work at all hours of the day and night to take people wherever they need to go," the attorney general explained. "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."
Associated Press News further reported that New York Gov. Kathy Hochul said Uber also agreed to start quarterly payments to the territory's unemployment trust fund. Additionally, the company will make a retroactive payment to the fund to offset dues it owed since 2013. The funds are for the benefit of unemployed workers.
Photo by: Thought Catalog/Unsplash
