United States of America: Announced settlement in Attorney General investigation into Lyft over alleged misclassification of drivers as independent contractors and illegal retention of benefits

On 2 November 2023, the New York Attorney General (AG) announced that it had reached a settlement in the investigation into Lyft over alleged misclassification of drivers as independent contractors and illegal retention of benefits. Lyft agreed to pay a USD 38 million fine, which will be distributed to drivers, establish a minimum driver “earnings floor”, change its hiring and earnings policies, improve working conditions and pay sick leave. The AG stated that the investigation was opened due to Lyft's classification of its drivers as contractors not subject to Article 6 of the Labor Law, outlining requirements regarding the frequency of payments, benefits and deductions, and Lyft’s deductions of sales tax and Black Car Fund fees from Drivers’ earnings. The AG found Lyft non-compliant with Article 6 of the Labor Law and noted that the taxes and fees should have been deducted from the passengers' pay.