Uber agrees to major settlements on unemployment insurance and wage theft in New York

November 2, 2023 Rob Abruzzese

Attorney General Letitia James and Gov. Kathy Hochul made separate announcements on Thursday that involved significant financial agreements with rideshare giant Uber.
Photo: Holly Pickett/AP

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In a pair of groundbreaking settlements, Uber Technologies Inc. has reached agreements with both the New York State Department of Labor (NYSDOL) and New York Attorney General Letitia James, addressing unemployment insurance contributions and alleged wage theft, respectively.

The first agreement marks a transformative step in the “gig economy.” Gov. Kathy Hochul announced that Uber will begin making quarterly payments into the New York State Unemployment Insurance Trust Fund. Additionally, the company will make a retroactive payment covering owed amounts since 2013. This agreement sets a precedent, with New York being the first state in which Uber has settled over past and future unemployment insurance liabilities.

Governor Hochul said, “This unprecedented settlement with Uber sends a powerful message to working people: New York has your back.” While the exact dollar amount of this settlement remains confidential due to regulatory limitations, the move is seen as a significant victory for the state’s gig workers.

The second settlement announced by Attorney General James involves both Uber and Lyft. Following investigations that spanned multiple years, it was determined that the rideshare companies withheld pay and benefits from their drivers in violation of New York labor laws. As a result, Uber will pay $290 million and Lyft $38 million, all of which will be distributed to affected current and former drivers.

“Rideshare drivers work at all hours of the day and night to take people wherever they need to go,” said Attorney General James. “For years, Uber and Lyft systematically cheated their drivers out of hundreds of millions of dollars in pay and benefits.”

The probe revealed that, from 2014 to 2017, Uber improperly deducted sales taxes and Black Car Fund fees from driver payments — costs that should have been covered by passengers. Lyft engaged in similar practices between 2015 and 2017.

Besides the financial restitution, the settlements with Uber and Lyft introduce numerous benefits and protections for drivers. These include a minimum “earnings floor,” paid sick leave, proper hiring notices and earnings statements. The agreements guarantee minimum pay rates for drivers, both inside and outside New York City, and the introduction of an in-app chat support for drivers in multiple languages.

The settlements will significantly impact over 100,000 drivers throughout New York, many of whom are immigrants and the primary earners for their families.

New York Taxi Workers Alliance (NYTWA) Executive Director Bhairavi Desai said, “We are thrilled that our members won this historic victory to recover their stolen income.”

Multiple drivers, including Ishtiaq Ahmed and Malang Gassama, echoed these sentiments, expressing gratitude for the support from Attorney General James and the NYTWA in their long fight for justice against the rideshare giants.