Uber settles New York state claims related to unemployment benefits for drivers

By Jonathan Stempel

NEW YORK (Reuters) – Uber Technologies has reached a settlement with the New York State Department of Labor to help ensure that eligible drivers and couriers can obtain unemployment benefits, New York Governor Kathy Hochul said on Thursday.

The ride-sharing company agreed to begin making quarterly payments to the New York State Unemployment Insurance Trust Fund, which funds benefits for unemployed workers, and a retroactive payment for sums owed since 2013.

While the size of the payments were not disclosed, Hochul said the “transformative” settlement made New York first U.S. state to resolve claims against Uber to address past and future unemployment insurance liability.

The settlement arose from the long-simmering issue over whether Uber and rivals such as Lyft should classify drivers as employees or independent contractors.

New York’s labor agency believes Uber’s drivers and couriers are employees for purposes of unemployment insurance, while Uber believes they are independent contractors.

Thursday’s settlement does not resolve that dispute, but Hochul said Uber agreed that drivers eligible for unemployment benefits should get them.

Tony West, Uber’s chief legal officer, said in a statement that the accord “will ensure drivers continue to enjoy the independence and flexibility they value, while having access to important protections.”

Separately, Uber and Lyft on Thursday separately agreed to pay a combined $328 million to settle claims by New York Attorney General Letitia James that they systematically cheated drivers out of pay and benefits.

Uber will pay $290 million, and Lyft will pay $38 million.

(Reporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama)