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Uber and Lyft To Pay $328 Million in Wages To Drivers

New York Attorney General Letitia James investigated Uber and Lyft for unlawfully charging its drivers sales taxes and other fees when customers should have borne those costs.

From 2014 to 2017, Uber took sales taxes and Black Car Fund fees (a support organization for drivers) out of drivers' wages rather than charging passengers. Uber misrepresented what it was doing to the drivers, telling them it was deducting only Uber's commission and that drivers were "entitled to charge [the passenger] for any tolls, taxes, or fees incurred." However, the app did not allow drivers to charge these additional amounts. Lyft operated similarly, deducting an 11.4% administrative charge that equaled the sales tax and Black Car fund fees. Both companies did not provide drivers with the required state and city sick leave. Under the settlement agreement, Uber and Lyft will pay $290 million and $38 million respectively to harmed drivers.

In her statement, AG James said the companies "systemically cheated their drivers out of hundreds of millions of dollars in pay and benefits while they worked long hours in challenging conditions." Uber and Lyft also agreed to an "earnings floor," guaranteeing drivers across the state receive a minimum rate. Drivers outside NYC will receive a minimum of $26 per hour. In addition, the drivers will receive guaranteed paid sick leave for every 30 hours worked.