NEW YORK, Nov 02 (Reuters): Uber and Lyft will pay a combined $328 million to settle claims by New York's attorney general that the ride-sharing companies systematically cheated drivers out of pay and benefits.
Attorney General Letitia James said Uber will pay $290 million and Lyft will pay $38 million to resolve her office's multi-year investigation into the companies, including their practice of classifying drivers as independent contractors.
The settlements also guarantee drivers minimum hourly rates and paid sick leave, and require that the companies provide them with notices and in-app chat support to address their questions about earnings and other working conditions. More than 100,000 current and former drivers in the state stand to receive settlement funds and related benefits.
"This settlement will ensure they finally get what they have rightfully earned and are owed under the law," James said in a statement.
She called the accord with the San Francisco-based companies the largest wage theft settlement in her office's history. Uber and Lyft denied wrongdoing in agreeing to settle.
Both companies have long defended against claims nationwide that they shortchange drivers, many of whom are immigrants, out of pay and benefits, sometimes by classifying them as independent contractors instead of employees.
In a statement, Uber set its settlement "helps put to rest" the classification issue, and will be a model for other states.
Lyft said in a separate statement it believes it has always properly classified drivers as independent contractors. It also said its current practices were not at issue.
James accused Uber and Lyft of improperly deducting sales taxes and fees for a workers compensation fund from drivers' payments, though passengers should have paid those amounts.
Uber's alleged violations occurred from 2014 to 2017, and Lyft's from 2015 to 2017.
James said both companies also denied drivers sick leave that state and New York City employees are legally entitled to receive.
The probe arose from concerns from the New York Taxi Workers Alliance, which says it represents about 21,000 yellow taxi, green cab, app-based, livery and corporate car drivers.
Under the settlement, drivers outside New York City will receive a minimum $26 per hour for rides and sick leave, adjusted annually for inflation.
