Landmark Settlement: Uber and Lyft Resolve $328 Million Wage Dispute

Uber and Lyft Settle Monumental $328 Million Wage Dispute, Revolutionizing Gig Work

In a game-changing resolution, Uber and Lyft have agreed to a groundbreaking $328 million settlement, officially closing the chapter on allegations of withholding wages and failing to provide mandatory paid sick leave for their drivers in New York state. Attorney General Letitia James’ office announced this monumental settlement on Thursday, marking it as the largest wage-theft settlement ever achieved by the state.

Uber has committed to pay a substantial $290 million, while Lyft follows suit with a payment of $38 million. These colossal sums will be channeled directly to the drivers who have been affected by what’s been described as unlawful employment practices. Astoundingly, over 100,000 drivers in the state of New York are eligible to claim their well-deserved funds and benefits, firmly secured under these pivotal agreements. The notification process for drivers to file claims will occur through various channels, such as mail, email, or text.


In a resolute statement, Attorney General Letitia James declared, “For an extended period, Uber and Lyft systematically deprived their dedicated drivers of hundreds of millions of dollars in rightful compensation and benefits, despite their enduring commitment to demanding work conditions. This settlement guarantees that they will at last receive the just rewards they are entitled to under the law. My office remains steadfast in its commitment to safeguarding the rights of workers in the evolving ‘gig economy’ and upholding the very laws designed to shield them.”

These monumental settlements, which resolve extensive investigations spanning multiple years, mark a significant shift in the ongoing stand-off between ride-hailing giants and regulators nationwide. This conflict primarily revolves around the level of oversight the companies should receive and the obligations they owe their drivers. Notably, both Uber and Lyft have staunchly opposed reclassifying their workers from contractors to employees, a change they asserted was opposed by the majority of their workforce.

Uber’s settlement, which totals more than $290 million, represents over 3% of the $9.23 billion in revenue generated in the last quarter. In parallel, Lyft’s commitment of nearly $38 million accounts for almost 4% of the $1.02 billion in revenue reported during the same period.

In an endeavor to reshape the landscape, both companies have also consented to ongoing changes in driver compensation and benefits in the Empire State.


The Attorney General’s office alleged that the ride-hailing companies incorrectly deducted charges from drivers’ wages that should have been borne by passengers. For instance, between 2014 and 2017, Uber deducted sales taxes and Black Car Fund fees from drivers’ paychecks, misrepresenting this practice in its terms of service. Lyft, on the other hand, was alleged to have deducted an 11.4% administrative charge equivalent to the sales tax and Black Car Fund fees between 2015 and 2017.

Furthermore, both companies failed to meet the required standards for providing paid sick leave, as mandated by state and New York City law, according to the allegations presented by Attorney General Letitia James.

Under the terms of the settlement, Uber and Lyft are compelled to offer drivers outside New York City a guaranteed earning minimum of $26 per hour, adjusted annually for inflation. This minimum rate encompasses earnings from the moment a ride is dispatched until its completion, as specified by the Attorney General’s office. It’s noteworthy that drivers within New York City already receive guaranteed minimum earnings in accordance with local regulations.

Additionally, drivers across New York state will now enjoy guaranteed paid sick leave. For every 30 hours worked, drivers will accumulate one hour of sick pay, with a cap of 56 hours per year, as highlighted by the Attorney General’s office. Both companies are committed to updating their apps to enable drivers to request sick leave and engage in discussions about earnings and working conditions through an in-app chat tool.

Another crucial facet of the settlement encompasses drivers’ access to compensation breakdowns. Uber and Lyft are required to provide drivers with detailed information about how much passengers paid for each ride. Furthermore, they must facilitate an in-app chat tool for drivers to communicate about their earnings and working conditions. Both companies are also obligated to permit drivers to appeal any deactivation from their platforms, thereby enhancing the transparency and accountability in the ride-hailing sector.


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