Uber and Lyft have agreed to offer a minimum wage, paid sick leave and other benefits for drivers as part of a $175 million settlement resolving a multi-year legal battle with the state of Massachusetts.
The rideshare companies will be required to pay drivers a minimum of $32.50 an hour, provide one hour of paid sick leave for every 30 hours worked, offer a stipend to buy into the state’s paid family and medical leave program and allow drivers to pool their hours across companies to receive a health care stipend.
Uber must also pay the state $148 million to resolve alleged labor violations, while Lyft must pay $27 million.
“For years, these companies have underpaid their drivers and denied them basic benefits,” Massachusetts Attorney General Andrea Joy Campbell said in a statement.
“I want to thank my team, whose hard work has secured a standard of dignity for every driver across the state, and our labor allies and the drivers themselves for the tireless work and advocacy,” she added.
Uber and Lyft also touted the settlement as a win, emphasizing that the agreement grants drivers new benefits while maintaining flexibility.
"This agreement is an example of what independent, flexible work with dignity should look like in the 21st century,” Tony West, Uber’s chief legal officer, wrote in a press release.
“In taking this opportunity, we’ve resolved historical liabilities by constructing a new operating model that balances both flexibility and benefits,” he added. “This allows both Uber and Massachusetts to move forward in a way that reflects what drivers want and demonstrates to other states what’s possible to achieve.”
The settlement comes shortly after the Massachusetts Supreme Judicial Court cleared the way for a ballot measure that would have allowed voters to decide whether rideshare and delivery drivers should be classified as employees or independent contractors.
However, the agreement eliminates the need for the November ballot measure, both the attorney general and Lyft noted in their press releases.
“This is a huge win for Massachusetts drivers that secures their freedom to earn when, where, and however long they want,” Jeremy Bird, Lyft’s executive vice president of driver experience, said in a statement.
