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💰 How Does Uber & Lyft's $328 Million Settlement With NY State Impact NYC TLC Drivers?
Uber & Lyft reached a historic $328 million labor settlement with New York State. What happened & how does it impact NYC TLC drivers?
Uber & Lyft agreed to pay $328 million to New York State drivers (including NYC) after attorney general investigated a wage-theft complaint
Funds will be transferred to current and former drivers (estimated to be ~100,000) in the form of back pay
Uber & Lyft deny any wrongdoing
Complaint stemmed from New York Taxi Workers Alliance (NYTWA) noticing companies collected certain taxes and fees from drivers vs. passengers
Uber will also start making payments to the unemployment insurance fund
Drivers across New York State, including NYC TLC-licensed drivers, will still be classified as independent operators
NYC TLC-licensed drivers already have minimum pay protection, but will see other notable benefits including paid sick leave & ability to appeal deactivations
Many NYC TLC-licensed drivers received a message yesterday from Uber (see below) and also read about a $328 million 👀 Uber/Lyft settlement with New York State. Some were understandably confused about what was happening and how it may impact them.
Specifically, does the decision only impact non-NYC New York State rideshare drivers or does it also impact NYC TLC-licensed drivers? Short answer, instituting a statewide minimum pay standard impacts only non-NYC New York drivers, as NYC already has such protections in place. However, the decision around unemployment contributions, paid sick leave and deactivation appeals does impact NYC TLC-licensed drivers. It also appears some NYC TLC drivers that worked for Uber/Lyft from 2014 to 2017 might be receiving backpay.
We quickly break down some specifics below.
Quick Background
According to Wall Street Journal reporting, New York State Attorney General (AG) Letitia James’ office alleges that between 2014 and 2017, Uber deducted sales taxes and Black Car Fund fees from drivers’ earnings when they should have been paid by passengers.
During that time period, we believe the total percent incorrectly deducted would have been 8.875% NYS sales tax + 2.5% Black Car Fund fees = 11.375%! In addition, the AG states between 2015 and 2017, Lyft similarly deducted an 11.4% administrative charge from drivers’ payments that was equal to the amount of sales tax and fees that should have been paid by riders.
The original complaint was brought to the attention of the AG by the New York Taxi Workers Alliance (NYTWA). NYTWA members were quoted in the AG’s official press release several times.
“We congratulate NYTWA’s legal team that uncovered the wage theft and pursued legal action, the Attorney General’s Labor Bureau who worked diligently on the settlements, Attorney General Letitia James whose leadership brought us to triumph, and our members whose refusal to give up made this day possible.”
“We’re thrilled…This was an eight-and-a-half-year pursuit for us.”
- Bhairavi Desai, Executive Director, New York Taxi Workers Alliance (NYTWA)
“When we realized Uber was taking this money from all of us, we brought it to our union, the New York Taxi Workers Alliance. That’s when we started our fight to win back the millions Uber stole from drivers. Now, with the help of Attorney General Letitia James, we’re finally seeing justice.”
- Ishtiaq Ahmed, NYTWA member and Uber driver
“Attorney General James would like to thank the New York Taxi Workers Alliance for bringing this matter to the office.”
- Official New York State Attorney General Office Statement
There were also many New York State political leaders who were quoted and supported the decision in the AG’s press release. Interestingly, Uber and Lyft publicly supported the settlements, as it seemed to resolve longstanding litigation with New York State.
“Today, Uber reached a landmark, first-of-its-kind agreement with New York Attorney General Letitia James, that gets us closer to achieving that goal. The agreement is a win for drivers across New York State who can now enjoy both the flexibility that is so important to them, while also having new benefits and protections like a minimum earnings standard and paid sick leave.
This helps put to rest the classification issue in New York and moves us forward with a model that reflects the way people are increasingly choosing to work. It also will serve as a model for other states, demonstrating that when we work together with legislators and regulators, we can resolve these issues in a way that benefits workers and consumers alike.”
- Tony West, Uber’s Chief Legal Officer
“This is a win for drivers, and one we are proud to have achieved with the New York Attorney General’s Office. New York has long been a leader in providing drivers portable benefits through flexible earning opportunities with its Black Car Fund, and this agreement expands upon that foundation. We look forward to continuing this work in order to provide New York drivers the independence and full range of benefits available to those in other states, like California and Washington”
- Jeremy Bird, Lyft’s Chief Policy Officer
Settlements
There are essentially two significant monetary settlements related to the announcement(s) above.
$328 million backpay settlement: Uber’s share is $290 million & Lyft’s share is $38 million. This settlement will be put into two funds that will pay out claims that roughly 100,000 current and former drivers in New York State are eligible to file. (New York Times)
Uber Agreement to Make Unemployment Insurance Contributions: Uber will begin making quarterly payments into the New York State Unemployment Insurance Trust Fund and make a retroactive payment to the UI Trust Fund for payments owed since 2013. Note, Lyft is not mentioned in the official announcement, only Uber. (NY Governor Kathy Hochul’s Office)
If you are you a NYC TLC Driver (or New York State Driver) who might be owed money, what’s the next step?
According to the AG’s office, notices concerning the distribution will be delivered to drivers by mail, email and/or text message. Information on the submission, review, and distribution of claims is also available on the Office of the Attorney General’s (OAG) website.
New NYS & NYC TLC Driver Benefits
Uber’s Chief Legal Officer Tony West nicely lays out the new benefits for both New York State and NYC Uber drivers as part of this settlement. We think the paid sick leave and the ability to appeal deactivations are very notable.
⭐= AutoMarketplace highlighting very noteworthy developments for NYC TLC-licensed drivers.
From Uber’s newsroom.
As part of this agreement, Uber will provide drivers across the state with the following:
Minimum Earnings Floor for Working Time: Drivers outside of NYC will earn at least $26/hour while en route to a rider or with a rider in the vehicle (NYC drivers have had an earnings standard for many years, which will remain in place).
Paid Sick Leave (PSL): Drivers in New York will receive up to 56 hours of paid sick leave per year:
In NYC ⭐, drivers will now receive an hour of PSL for every 30 hours en route to a rider or with a rider in the vehicle, at a rate of $17/hour (on top of the 6% of the existing earnings standard which includes paid time off)
Drivers in the rest of the State will be entitled to an hour of PSL for every 30 hours en route to a rider or with a rider in the vehicle, at the rate of at least $26/hour.
In-App Support: Support for drivers in English, Spanish, French, Russian, Bengali, and Chinese.
Appeal Options ⭐: Drivers can appeal all decisions by Uber to deactivate a Driver’s access to the app.
Driver Training: Paid training and education about driving on the app.
⭐= AutoMarketplace highlighting very noteworthy developments for NYC TLC-licensed drivers.
Lyft’s blog laid out the following.
Under the terms of the deal:
New York drivers outside New York City will have a minimum earnings standard of $26 per hour for engaged time (the time they accept a ride through when they complete it), adjusted over time for inflation.
NYC drivers will continue to earn under the Taxi & Limousine Commission’s Minimum Driver Pay Rules.
All New York drivers will be eligible to, among other things, accrue paid sick leave ⭐, receive a one-time payment to view educational resources, and more easily appeal deactivations ⭐ via a new feature in the driver app.
As always, let us know your thoughts (or if you think we made a mistake) in the comments section below or by emailing us at info@automarketplace.com.
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