Uber and Lyft have finally settled a long-standing legal dispute with the Massachusetts attorney general, reaching an agreement that will benefit their drivers in the state. This groundbreaking settlement includes a minimum pay rate and some essential benefits for gig workers.
Under the terms of the settlement, Uber and Lyft will pay a total of $175 million to resolve claims of violating state labor laws. The majority of this sum will go directly to drivers in Massachusetts. However, the companies succeeded in maintaining the classification of drivers as independent contractors, rather than employees.
One of the key victories for gig workers in this agreement is the introduction of a health insurance plan for drivers clocking in at least 15 hours a week. Additionally, drivers will receive expanded accident insurance and a guaranteed minimum pay rate of $32.50 per hour spent on a ride.
This settlement mirrors similar provisions put in place in other states like New York, California, Washington State, and most recently, Minnesota. Uber and Lyft have faced significant pushback from workers and labor groups seeking fairer wages, leading to substantial spending on local government lobbying.
Andrea Joy Campbell, the attorney general of Massachusetts, expressed satisfaction with the agreement, highlighting the long-overdue benefits for drivers. She stated, “For years, these companies have underpaid their drivers and denied them basic benefits. Today’s agreement holds Uber and Lyft accountable, providing drivers in Massachusetts with guaranteed minimum pay, paid sick leave, occupational accident insurance, and health care stipends.”
The lawsuit against Uber and Lyft was initially filed in 2020 by Maura Healey, the former attorney general. In response to the settlement, both companies emphasized the importance of maintaining independent contractor status for driver flexibility.
Uber’s chief legal officer, Tony West, commented, “This agreement exemplifies independent, flexible work with dignity in the 21st century.” Similarly, Jeremy Bird, Lyft’s executive vice president of driver experience, expressed enthusiasm, stating, “We’re thrilled to reach an agreement that benefits everyone and builds on progress made in states like New York, California, Minnesota, and Washington.”
Thanks to this settlement, Uber and Lyft have sidestepped a potential fight over driver classification in Massachusetts scheduled for November’s ballot initiative.
