Uber, Lyft to pay total of USD 328 million to drivers for this reason
Uber Lyft
Uber and Lyft have agreed to pay a total of USD 328 million in order to settle New York attorney general's claims that the digital cab-hailing platforms systematically cheated drivers and kept them away from receiving pay and benefits that they ought to have got.
Attorney General Letitia James said Uber will have to pay USD 290 million and Lyft will have to pay USD 38 million as her office resolves multi-year investigation into both companies.
The attorney general called this the largest wage theft settlement in her office's history.
She said that cab drivers will also get a guaranteed minimum hourly rate along with paid sick leave.
The drivers will also get notices and chat-support in the app to answer their questions about their earnings and also their queries about their working conditions.
The investigation by the attorney general's office looked into claims that both companies improperly collected some taxes and fees from drivers in New York rather than from passengers.
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The probe also looked into Uber and Lyft's practices of classification of the drivers as independent contractors rather than employees.
Reuters has reported that more than 100,000 current as well as former drivers in New York State are eligible to gain from the settlements.
"This is huge," said Shannon Liss-Riordan, a lawyer representing thousands of Uber and Lyft drivers who challenged the companies' practices.
"This settlement could help advance other states' efforts to reach a recovery for drivers whose rights have been violated." Liss-Riordan added. She was quoted by Reuters.
Both Uber and Lyft, have denied wrongdoing. They have termed the settlements a "win" for drivers.
After the settlement, shares of both the companies rose. Uber gained more than 6 per cent and Lyft gained more than 9 per cent.
Both Uber and Lyft have long denied that they cheat drivers, many of them immigrants. The companies say that their drivers prefer working as independent contractors.
(With inputs from agencies)