A New York labor organization is calling for an investigation of Lyft and other ride-hailing services for allegedly cheating drivers on their fares.
The Independent Drivers Guild (IDG), which formed last year as an affiliate of an existing labor union, said Wednesday that Lyft has been engaged in “large-scale deception” by improperly deducting more than 11 percent from drivers’ fares on interstate trips. In effect, the ride-hailing company is stealing some of the drivers’ wages by collecting taxes and surcharges on trips out of state that should apply only to in-state trips, and then disguising those charges as administrative fees, the labor group says.
New York State Assembly member Robert Rodriguez backed the IDG’s request for a full investigation in a letter addressed to the state’s attorney general and the Department of Taxation and Finance.
Drivers have also accused Uber, Juno and other ride-hailing services of being less than upfront in their dealings with their citizen drivers.
“There is no merit to this allegation,” Lyft spokesman Adrian Durbin said Wednesday afternoon. “Our driver agreement lays out what commissions and fees apply to driving on the Lyft platform, and we’ve consistently abided by the agreement since entering the New York market in 2014.”
Ride-hailing drivers in New York have discovered that Lyft appears to be deducting a state sales tax on out-of-state trips that should be applied only to rides that begin and end in New York, the drivers guild says. The ride-hailing service also appears to be improperly collecting a surcharge for the Black Car Fund that shouldn’t apply to out-of-state trips.
When the drivers complained to Lyft, however, they were told that the charges were administrative fees. Those fees also happen to mimic the rates of the 8.875 percent state sales tax and the 2.5 percent surcharge for the Black Car Fund, which funds workers’ compensation for the drivers, according to the drivers group.
“This is an egregious and deliberate tax scam that amounts to wage theft affecting thousands of our members. By disguising these pay deductions as state taxes, Lyft willfully deceived drivers in order to rob them of their earnings and further enrich the company,” Ryan Price, executive director of the IDG, said in a written statement.
About 16,000 Drivers Guild members drive for Lyft every week, completing about 60,000 trips in New York City alone. Nearly all of them are immigrants, and most make less than $50,000 a year before expenses driving for the ride-hailing services, the guild says. The IDG, which is an affiliate of the International Association of Machinists (IAM) District 15, formed last May.
This report has been updated.
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