Ride-hailing giants Uber and Lyft have reached a $328 million settlement with the New York attorney general's office over allegations of wage theft. The settlement comes after an investigation into claims that the companies collected taxes and fees from drivers instead of passengers. Under the settlement, Uber will pay $290 million, while Lyft will contribute $38 million to two funds that will compensate around 100,000 current and former drivers in New York State. However, neither company admitted fault in the settlement.

The investigation by the attorney general's office also examined whether Uber and Lyft failed to provide drivers with paid sick leave, a benefit available to employees in the state. As part of the settlement, drivers will now be entitled to one hour of sick pay for every 30 hours worked, with a maximum of 56 hours per year. Additionally, both companies will update their apps to allow drivers to request sick leave directly through the platforms.

Drivers located outside of New York City will also benefit from a guaranteed minimum pay rate of $26 per hour, although this figure only applies to the time between dispatch and completion of a ride. Drivers within the city already receive minimum driver pay thanks to regulations established by the Taxi and Limousine Commission in 2019.

New York Attorney General Letitia James hailed the settlement as a victory for drivers, stating that it would ensure they finally receive what they are rightfully owed. She also emphasized her office's commitment to protecting the rights of workers in the gig economy. The settlement is the largest wage-theft settlement ever secured by the attorney general's office.

Uber's settlement represents over 3% of the company's revenue for the last quarter, which amounted to $9.23 billion. Lyft's settlement, on the other hand, accounts for nearly 4% of the $1.02 billion in revenue the company reported. These settlements mark the latest concessions from the ride-hailing companies in an ongoing battle with regulators nationwide regarding their level of oversight and their obligations towards drivers.

In addition to the financial settlement, both companies have agreed to ongoing changes in how they compensate drivers and provide benefits in New York State. The attorney general's office alleged that Uber and Lyft wrongly deducted charges from drivers' wages that should have been charged to passengers. For example, Uber deducted sales taxes and fees from drivers' paychecks between 2014 and 2017, while Lyft deducted an administrative charge equivalent to sales taxes and fees between 2015 and 2017.

Furthermore, both companies were accused of failing to provide paid sick leave as required by state and New York City law. As part of the settlement, drivers will now have access to guaranteed paid sick leave. They will earn one hour of sick pay for every 30 hours worked, up to a maximum of 56 hours per year.

The agreements also include measures to improve transparency and communication between the companies and drivers. Uber and Lyft will provide drivers with compensation breakdowns, including the amount a rider paid for each trip. They will also implement an in-app chat tool for drivers to discuss earnings and work conditions. Additionally, both companies will allow drivers to appeal against deactivation from their platforms.

The settlement marks a significant victory for drivers in New York State, who will finally receive compensation for alleged wage theft and gain access to paid sick leave. It also serves as a reminder of the ongoing regulatory challenges faced by Uber and Lyft as they navigate the gig economy landscape.