Uber, Lyft to hand back $328M of stolen wages to NY drivers
So much for appy cabbies being 'partners' - Big U kept fares low by making 'em pay fees that riders should have picked up
Uber and Lyft will hand over $328 million in back pay to more than 100,000 New York drivers, the state's Attorney General Letitia James announced on Thursday.
The settlements mark an end to multi-year probes launched by the Office of the New York State Attorney General that found both companies unlawfully withheld wages from workers.
"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."
The $328 million will cover two payments that the rideshare companies imposed on their drivers, instead of their passengers.
One was the 2.5 percent levy charged to passengers by the Black Car Fund, a non-profit organization that arranges workers compensation insurance for drivers. Uber and Lyft deducted Black Car Fund fees directly from the drivers' pockets instead of levying the fee on riders. The other was a sales tax of 8.875 percent that purchasers were supposed ot cover but that instead got pulled from drivers' wages.
Instead of adding those fees to fares, Uber took them from drivers’ wages for between 2014 to 2017 and Lyft face similar charges for operations between 2015 and 2017.
A reminder: Uber describes drivers as “partners”.
“The new Driver app helps you earn smarter and supports you – like a partner – at every turn,” states an Uber blurb - using the term partner instead of driver. Another part of the ride-share biz's lure for drivers is the promise it offers “support at every turn.”
“If there’s anything that you need, you can reach us anytime 24/7. We offer in-app and phone support to all our earner-partners.” But not fair pay in New York it seems.
The settlement means over 100,000 “partners” are eligible to file claims to recoup those taxes and fees, with the sums considered backpay. Uber has agreed to cough up $290 million, whilst Lyft will hand over $38 million.
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"This is a win for drivers, and one we are proud to have achieved with the New York Attorney General's Office," Lyft's Chief Policy Officer Jeremy Bird told The Register in a statement. "New York has long been a leader in providing drivers portable benefits through flexible earning opportunities with its Black Car Fund, and this agreement expands upon that foundation."
"We look forward to continuing this work in order to provide New York drivers the independence and full range of benefits available to those in other states, like California and Washington," he added.
Under the settlement, both ride-hailing companies have agreed to guarantee wages at the minimum rate of $26 per hour to drivers operating outside of New York City. Workers will also be allowed to accrue paid sick leave. They will earn one hour of sick pay for every 30 hours on the job and can collect a maximum of 56 hours per year.
"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," said New York Uber driver Ishtiaq Ahmed, in a canned quote.
The Register has asked Uber for comment. ®