LYFT Lyft Inc

By Dean Seal

Uber and Lyft have agreed to pay a combined $328 million to resolve the New York attorney general's allegations that the ride-hailing giants cheated drivers out of their wages.

Attorney General Letitia James said Uber will pay $290 million while Lyft will pay $38 million to resolve claims that the companies' policies withheld pay from drivers and prevented them from receiving valuable benefits available under New York's labor laws.

The settlement funds will be transferred to current and former drivers in the form of back pay.

The resolution also provides for a minimum driver "earnings floor," along with paid sick leave, proper hiring and earnings notices, and other improvements to driver working conditions, the AG's office said.

Representatives for Uber and Lyft didn't immediately respond to requests for comment.

The drivers affected by the alleged misconduct largely came from immigrant communities and rely on their driving jobs to provide for their families, James said in a statement.

James' office alleges that between 2014 and 2017, Uber deducted sales taxes and certain fees from drivers' earnings when they should have been paid by passengers. Between 2015 and 2017, Lyft similarly deducted an 11.4% "administrative charge" from drivers' payments that was equal to the amount of sales tax and fees that should have been paid by riders, the AG's office said.

Both ride-hailing companies also failed to provide drivers with paid sick leave, according to the attorney general.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

November 02, 2023 08:26 ET (12:26 GMT)

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