Ride-sharing companies Uber and Lyft will pay a total of US$328 million to settle wage theft claims in New York, Attorney General Letitia James announced Thursday.
James said the settlements resolve investigations into companies improperly charging drivers sales taxes and other fees when the costs should have been paid by customers.
Uber will pay US$290 million and Lyft US$38 million. The money will be distributed to current and former drivers, she said. The companies also agreed to give drivers outside New York City paid sick leave and to give drivers outside New York City a minimum wage of $26 an hour.
“For years, Uber and Lyft systematically defrauded their drivers out of hundreds of millions of dollars in wages and benefits while they worked long hours in harsh conditions,” James said in a statement.
Tony West, Uber’s chief legal officer, said the deal “helps solve the classification problem in New York and moves us toward a model that reflects the way people increasingly choose to work.”
Lyft Chief Policy Officer Jeremy Bird said in a statement: “This is a victory for drivers, and we are proud to have achieved this victory with the New York Attorney General’s Office.”