Uber and Lyft withheld billions of dollars in wages, according to drivers. A settlement is being negotiated in California.

Uber drivers and advocates rally outside the company's driver support center in South San José on June 25, 2024. (Joseph Geha/KQED)

Uber and Lyft Withheld Billions of Dollars in Wages, Drivers Say. Settlement Negotiations Underway in California

By: Samantha Lim and Farida Jhabvala Romero

Uber drivers and their advocates demonstrate outside the company’s driver support center in South San Jose on June 25, 2024. (Joseph Geha/KQED)

Updated at 12 p.m. Monday

Nearly half a decade after public officials sued Uber and Lyft, alleging the companies withheld what drivers say could amount to billions of dollars in wages and severance pay, negotiations with the state will begin Monday and continue for two weeks.

The drivers are demanding that the state push for a settlement that adequately recovers what they say are years of lost wages, improves working conditions—such as protection against driver deactivation from the apps—and raises wages going forward.

More than 250,000 drivers who worked for Uber and Lyft between 2016 and 2020 may be eligible for the settlement, according to Rideshare Drivers United, a California-based organization. Approximately 5,000 drivers filed lawsuits with the state labor commissioner's office in 2020, alleging they were denied overtime pay, mileage reimbursement, and other benefits to which employees are entitled.

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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 lawsuits, along with several others filed on behalf of individual drivers, were consolidated into a single case in San Francisco Superior Court. A closed-door mediation session with Uber is scheduled for Monday, while separate talks with Lyft will take place on April 8.

Members of Rideshare Drivers United protest against Uber and Lyft during a demonstration in Los Angeles, California, on February 14, 2024. (Frederic J. Brown/AFP via Getty Images)

The lawsuits and subsequent negotiations cover a period prior to California voters' approval of Proposition 22, a ballot initiative that allowed Uber, Lyft, and other ride-hailing companies to classify their drivers as independent contractors.

The proposition, which garnered more than $200 million in support from ride-hailing companies like Uber and Lyft, promised that independent contractors would receive better pay and treatment—a stipulation that some drivers allege was not honored.

Uber and Lyft “have been doing whatever they want. They take more than half of our pay, leave us in bad shape, and unfairly deactivate us,” 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 Uber drivers have to drive 12 hours a day, six days a week, sometimes even seven days, just to be able to pay the bills.”

Members of Rideshare Drivers United protest against Uber and Lyft in Los Angeles, California, on February 14, 2024, demanding better rights for drivers.

Drivers aren't earning enough to make ends meet, and they also have to deal with maintenance costs, registration fees, and gas expenses, Diallo said, adding that ride-hailing companies are paying their drivers less and less each year.

All VTA bus routes are still operating after the strike; some light rail services are returning on Monday.

“Uber and Lyft are useful, but we can do better,” he said. “We have to treat people with dignity. They need to be paid a decent wage so they can take weekends off, at least spend time with their spouse and children, and be happy.”

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

“Drivers come to Uber precisely because of the unique flexibility it offers,” an Uber spokesperson said in an email. “Proposition 22 protected her choice to work independently, while also guaranteeing important new protections. California voters have spoken, overwhelmingly, and we look forward to putting these long-standing issues behind us.”

According to Veena Dubal, a law professor at the University of California, Irvine, a ride-hailing industry researcher, and a critic of Uber and Lyft, studies show that drivers are earning less than before Proposition 22. Researchers at the University of California, Berkeley's Center for Labor Studies found last year that ride-hailing drivers in the San Francisco Bay Area, Los Angeles, and three other metropolitan areas earned an average hourly wage of $5.97 without tips. They also earned $7.63 with tips. After accounting for expenses and waiting time.

However, Dubal stated that the companies are unlikely to make many concessions regarding future worker protections because of the investment they made in Proposition 22.

The drivers “deserve every penny of the billions of dollars they are owed,” she said. “It’s tragic that this is primarily about giving workers back what they were owed 10 years ago and not about ensuring that workers today are at least protected by the minimum wage, at least protected by unemployment insurance. Proposition 22 actually prevented all of that.”