The New York State Court has reached an agreement with the Uber and Lyft platforms. The result will be compensation for drivers, amounting to 328 million dollars. The State Prosecutor's Office emphasized that this is the largest settlement ever obtained in the case of irregularities in the area of compensation.
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Despite assurances of no fraud against thousands of drivers, the practices conducted by Uber and Lyft companies were not in accordance with the regulations of the New York labor market. As stated in her official statement by the New York State Attorney, Letitia James - the platforms agreed to pay substantial sums of money based on the settlement in the case of "wage theft". Uber for the amount of 290 million dollars, and Lyft - 38 million dollars.
Court documents revealed that in recent years Uber and Lyft have committed irregularities in the area of tax and fee settlements. Both companies deducted them from driver's wages, justifying it with the provided contract. At the same time, Uber in the years 2014-2017 deducted taxes that should be paid by passengers. The same situation occurred with Lyft drivers in 2015-2017. The company deducted 11.4% of the so-called administrative fee, corresponding to the amount of sales tax and Black Car Fund fees.
Jakub Rusak
The imposed financial penalties are not everything. In addition to compensation for drivers, Uber and Lyft platforms are obliged to introduce new guidelines regarding minimum wage, paid sick leave, remuneration, and recruitment. The companies agreed to establish a minimum hourly rate, which will guarantee drivers a minimum wage throughout the state.
"Uber has gained a collective agreement for the first time. Drivers from New York State can now enjoy the flexibility that is so important to them, while gaining new benefits and protection" - we read in Uber's statement.
The agreement clearly indicates that drivers will not only receive a refund of arrears, but also both platforms will introduce new rules that will be in accordance with the labor code regulations. This is a step towards a more sustainable and fair transport industry, which will benefit all interested parties - drivers and passengers.
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