Lyft Pays Millions in New York Class Action Settlement

Company
Lyft

Why
Underpaying drivers

Total Settlement Amount
$38M

Maximum Individual Claimant Award
Varies

Claim Deadline

January 31, 2025

A groundbreaking Uber and Lyft lawsuit has resulted in an extraordinary $328 million settlement for rideshare drivers in New York. This Uber and Lyft class action lawsuit has witnessed Uber agreeing to pay $290 million, while Lyft will contribute $38 million to compensate more than 100,000 eligible drivers in this significant rideshare lawsuit.

Specifically, this Lyft settlement addresses years of improper deductions from driver earnings between 2014 and 2017. Furthermore, our investigation revealed that both companies had wrongfully made sales tax deductions and Black Car Fund fees from drivers' payments - costs that should have been covered by passengers. As a result, New York Attorney General Letitia James has secured not just back payments but also established new protections for drivers, including guaranteed minimum earnings and paid sick leave benefits.

Historic Settlement Details

The Uber Lyft settlement stems from systematic deductions made by both companies during specific timeframes. Primarily, Uber's violations occurred between November 2014 and May 2017, whereas Lyft's improper practices took place from October 2015 through July 2017.

Moreover, the investigation revealed detailed patterns of unauthorized deductions. Uber misrepresented their payment terms, claiming drivers could charge passengers for taxes and fees, yet never provided a mechanism to do so. Subsequently, the company wrongfully deducted sales taxes and Black Car Fund fees from drivers' earnings. Notably, Lyft implemented an 11.4% "administrative charge" that matched the amount of sales tax and Black Car Fund fees that should have been passenger responsibilities.

The settlement administrator, Rust Consulting, will oversee the distribution of funds, with Uber allocating up to $1 million for administrative costs. The claims process for this settlement opened recently and will remain accessible until January 31, 2025. Eligible drivers must complete claim forms either online or through mail to receive their portion of the settlement.

Driver Compensation and Claims

The claims process for the Uber Lyft lawsuit settlement in NYC is currently active, with eligible drivers having until January 31, 2025 to submit their driver compensation claims. Primarily, drivers who completed trips in New York between November 2014 and May 2017 for Uber, or October 2015 through July 2017 for Lyft, qualify for compensation.

Rust Consulting has established multiple channels for claim submissions. Drivers receive unique Claim ID numbers through mail, email, and text messages. Consequently, they can submit claims either online through dedicated settlement portals or via mail-in forms.

The settlement introduces significant new benefits for current drivers, including:

• Guaranteed paid sick leave, earning one hour for every 30 hours worked

• Minimum payment of $26.00 per hour for drivers outside NYC

• In-app chat support in multiple languages

• Right to appeal any deactivation decisions

Particularly noteworthy is the implementation timeline for these benefits. The changes began taking effect with Uber in February 2024 and Lyft in January 2024. Additionally, drivers will receive new documentation explaining their earnings, including detailed hiring notices and earnings statements.

Presently, more than 88,000 claims have already been filed. For deceased drivers' claims, representatives must contact Rust Consulting by January 31, 2025, though the documentation submission deadline may extend beyond this date. The settlement fund distribution is scheduled to commence through 2025, with complete funding expected by November 2025.

New Driver Benefits

Under the terms of this landmark Uber Lyft compensation lawsuit, drivers receive substantial workplace improvements. Initially, a new minimum earnings floor establishes $26.00 per hour for drivers outside New York City. This earnings floor increased to $26.39 on March 2, 2024, and reached $26.78 in June 2024.

Meanwhile, a comprehensive sick leave program grants drivers one hour of paid sick leave for every 30 hours worked. In accordance with the agreement, NYC drivers receive sick pay at $17.00 per hour, which increased to $17.25 in March 2024.

The settlement mandates enhanced transparency in earnings reporting. Both companies must now provide:

• Detailed hiring notices explaining expected earnings

• Clear statements for each pay period

• Immediate notifications of rider payments per trip

Significantly, drivers gain protection through a formal deactivation appeals process for platform deactivations. This system allows drivers to present evidence, including dash cam footage and police reports, to contest permanent removal decisions.

In November 2024, both platforms expanded their driver support services. Uber now offers chat support in six languages: English, Spanish, French, Russian, Bengali, and Chinese. Similarly, Lyft provides support in English, Spanish, and Canadian French. These improvements mark a substantial shift in driver protections within New York's rideshare industry.