Uber, Lyft to pay $328 million to settle wage-theft allegations in New York state

Uber and Lyft agreed to pay a combined $328 million to settle allegations the ride-hailing companies unlawfully withheld wages from drivers and failed to provide mandatory paid sick leave in New York state, Attorney General Letitia James’ office said Thursday.

Uber will pay $290 million and Lyft will pay $38 million. The state AG’s office said it’s the largest wage-theft settlement it’s won.

The money will go to drivers affected by the companies’ alleged practices. More than 100,000 drivers in New York could be eligible to receive the funds and benefits secured under the agreements, James’ office said. Drivers will be notified by mail, email or text about how to file a claim.

“For years, Uber and Lyft systemically cheated their drivers out of hundreds of millions of dollars in pay and benefits while they worked long hours in challenging conditions,” James said in a statement. “This settlement will ensure they finally get what they have rightfully earned and are owed under the law. My office will continue to make sure that companies operating in the so-called ‘gig economy’ do not deprive workers of their rights or undermine the laws meant to protect them.”

The settlements, which resolve multiyear investigations, reflect the companies’ latest concessions in a standoff with regulators across the country about the level of oversight they should receive and what they owe their drivers. Uber and Lyft have previously fought efforts to reclassify their workers from contractors to employees, for example, a change they said most of their workers opposed.

Uber’s settlement represents more than 3% of the $9.23 billion in revenue it generated last quarter. And Lyft’s settlement comes to nearly 4% of the $1.02 billion in revenue it reported.