U.S. ride-hailing service companies Uber and Lyft have decided to pay a settlement worth 430 billion won to drivers for deducting the service fees that passengers should pay by passing them on to drivers and deducting them from their income. Uber and Lyft have maintained that there is no legal problem with this practice, but as the prosecution investigation began in earnest, they reached an agreement with the drivers.
According to the New York Times (NYT) on the 2nd (local time), Uber and Lyft decided to create a fund totaling $328 million (about 433 billion won) to pay out a settlement to current and former drivers with addresses in New York State. . Uber decided to contribute $290 million (about 383 billion won), and Lyft decided to contribute $38 million (about 50 billion won). It is reported that there are more than 100,000 drivers in New York State who will receive settlement money.
Previously, the New York Taxi Workers’ Association (NYTWA) raised the issue, saying that Uber and Lyft were engaging in illegal activities, such as deducting the 11.4% service fee payable by passengers from drivers’ income. There were also claims that paid leave guaranteed by New York State law was not properly provided. Accordingly, New York State prosecutors began a related investigation in 2020. The New York State Prosecutor’s Office reportedly determined that Uber was suspected of charging illegal fees from November 2014 to May 2017, and Lyft from October 2015 to July 2017.
In addition to the settlement, Uber and Lyft agreed to give drivers one hour of paid leave for every 30 hours worked, up to 56 hours per year. “We believe this agreement will serve as a model for other states,” Uber Chief Legal Officer Tony West said in his statement. The New York State Prosecutor’s Office closed the investigation into the two companies following an agreement between the two parties.
Kakao Mobility, Korea’s No. 1 mobility calling platform, also recently announced that it would completely revamp the 3-5% service fee charged to taxi drivers amid intense pressure from regulatory authorities.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.