Uber, Lyft Withheld Billions in Pay, Drivers Say. California Settlement Talks Are Underway

Updated 12 p.m. Monday

Nearly half a decade after public officials sued Uber and Lyft, alleging that the companies were withholding what drivers say could amount to billions of dollars in wages and compensation, negotiations with the state are set to begin Monday and continue for two weeks.

Drivers are demanding that the state push for a settlement that adequately recoups what they say are years of lost wages, improves workplace conditions — such as protections against drivers being deactivated from the apps — and raises wages moving forward.

More than 250,000 drivers who worked with Uber and Lyft between 2016 and 2020 could be eligible for the settlement, according to Rideshare Drivers United, an organization based in California. Roughly 5,000 drivers filed claims with the state labor commissioner’s office in 2020, alleging that they were denied overtime, mileage reimbursement and other benefits employees are entitled to.

That same year, then-California Attorney General Xavier Becerra and the city attorneys of San Francisco, Los Angeles and San Diego sued Uber and Lyft for misclassifying drivers as independent contractors. The labor commissioner’s office also sued the companies, alleging wage theft.

The two actions, in addition to several others filed on behalf of individual drivers, were combined into a single joint case before the San Francisco Superior Court. A closed-door mediation session with Uber is scheduled for Monday, while separate talks with Lyft are set to take place on April 8.

The lawsuits and subsequent negotiations cover a period of time before California voters passed Proposition 22, a ballot initiative that allowed Uber, Lyft and other gig companies to classify their drivers as independent contractors.

The proposition, which received more than $200 million in backing from gig companies, including Uber and Lyft, promised that independent workers would receive better wages and treatment, a stipulation that some drivers allege was not met.

Uber and Lyft “have been doing what they want. They take more than half of our paycheck and then leave us in bad condition and deactivate us unfairly,” said Ibrahim Diallo, a San Francisco resident who started driving for Uber in 2015 before his account was deactivated in 2023. “More than half of the Uber drivers have to drive 12 hours six days a week, sometimes even seven days, to be able to meet the bills.”

Drivers don’t get paid enough to make ends meet, and they also have to deal with maintenance costs, registration fees and paying for gas, Diallo said, adding that the ride-hailing companies are paying their drivers less and less each year.

“Uber and Lyft are useful, but we can do better,” he said. “We have to treat people with dignity. They have to get good pay to allow them to take weekends, at least spend time with their wife, with their children, and be happy.”

According to Uber, drivers earn at least 120% of minimum wage during active hours. The company also said it has invested more than $1 billion into direct benefits, including health care plans and accident insurance for workers.

“Drivers come to Uber precisely because of the unique flexibility that it provides,” an Uber spokesperson said in an email. “Prop 22 safeguarded their choice to work independently while ensuring important new protections. The voters of California have spoken — overwhelmingly — and we look forward to putting these years-old matters behind us.”

According to Veena Dubal, a law professor at UC Irvine who researches the ride-hailing industry and has been critical of Uber and Lyft, studies show drivers are making less money than they did before Proposition 22. Researchers at the UC Berkeley Labor Center found last year that ride-hail drivers in the San Francisco Bay, Los Angeles and three other metro areas made an hourly average wage of $5.97 without tips and $7.63 with tips, after taking into account expenses and wait times.

However, Dubal said it’s unlikely that the companies will concede much in terms of future protections for workers because of how much they invested in Proposition 22.

Drivers “deserve every penny of the billions of dollars that are owed to them,” she said. “It’s tragic that this is primarily about getting workers what they were owed 10 years ago and not ensuring that workers today are at least protected by the minimum wage, at least protected by unemployment insurance. Proposition 22 really precluded all of that.”