In a major development for rideshare drivers in New York, Attorney General Letitia James announced on Thursday that Uber and Lyft have agreed to pay a combined settlement amount of $328 million. The settlements are a result of extensive investigations conducted by the state attorney general's office, which revealed that the rideshare companies had been withholding earnings from drivers and denying them certain benefits protected under New York labor laws.

Under the terms of the settlements, Uber will contribute $290 million, while Lyft will pay $38 million into two separate funds. These funds will be distributed as back pay to both current and former drivers who were affected by the violations. Additionally, as part of the agreement, both companies are committed to implementing improvements in drivers' working conditions, including the establishment of a minimum driver earnings floor. While New York City already has regulations in place to ensure minimum driver pay, this settlement will extend the protection to drivers operating outside the city. Furthermore, rideshare drivers will now be entitled to guaranteed paid sick leave.

Attorney General Letitia James stated, "For years, Uber and Lyft systematically cheated their drivers out of hundreds of millions of dollars in pay and benefits while they worked long hours in challenging conditions." She emphasized that a significant portion of these drivers come from immigrant communities and rely on these jobs to support their families. The settlement aims to rectify the situation and ensure that drivers receive the compensation they are rightfully owed.

The investigation by James' office revealed specific misconduct by both Uber and Lyft. Uber was found to have deducted sales tax and Black Car Fund fees from drivers' payments between 2014 and 2017, even though these charges should have been paid by passengers. The investigation also exposed Uber's misleading representations regarding deductions made to drivers' pay in their terms of service. On the other hand, Lyft was accused of deducting an "administrative charge" from drivers' payments between 2015 and 2017, which was equivalent to the amount of sales tax and Black Car Fund fees that should have been paid by riders.

More than 100,000 drivers in New York are eligible to receive settlement funds and improved benefits as a result of this agreement. Surveys conducted by the attorney general's office revealed that 90% of drivers in New York City are immigrants, two-thirds work full-time, and over half are the main breadwinners in their households.

To receive their share of the settlement funds, eligible drivers can file a claim. Despite the settlements, both Uber and Lyft maintain their denial of any wrongdoing.

Uber's Chief Legal Officer, Tony West, hailed the agreement as a "win for drivers across New York State," highlighting the flexibility and new benefits that will be provided going forward. Lyft's Chief Policy Officer, Jeremy Bird, also welcomed the settlement, recognizing the importance of providing drivers with independence and comprehensive benefits.

The settlement announcement initially accused the companies of "stealing earnings" from drivers, but the statement was later updated to say "taking earnings" without further comment from the attorney general's office.