Uber and Lyft have settled a legal dispute with the attorney general of Massachusetts, agreeing to pay their drivers in the state a minimum rate with benefits. The companies will pay $175 million to resolve claims of violating state labor laws, with most of the money going to gig workers. Despite this, drivers will still be classified as independent contractors, not employees.
The settlement includes benefits such as a health insurance plan for drivers working at least 15 hours a week, expanded accident insurance, and a minimum pay rate of $32.50 per hour for time spent on a ride. This follows similar pay and benefit provisions enacted in other states like New York, California, and Washington.
Massachusetts attorney general Andrea Joy Campbell stated, “For years, these companies have underpaid their drivers and denied them basic benefits.” Both Uber and Lyft praised the settlement, with Uber’s chief legal officer Tony West calling it an example of “independent, flexible work with dignity.”
The lawsuit against Uber and Lyft was originally filed in 2020 by former attorney general Maura Healey. The settlement will prevent a potential ballot initiative fight in Massachusetts over driver classification in November.
Overall, the agreement is seen as a positive step towards ensuring fair pay and benefits for gig workers, while also allowing companies like Uber and Lyft to maintain the independent contractor status that they argue provides flexibility for their drivers.
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