Uber and Lyft have reached a settlement in a lawsuit brought by the state of Massachusetts, agreeing to pay drivers a minimum of $32.50 per hour and a total of $175 million to resolve allegations of violating state wage and hour laws. Current and former drivers will receive the majority of this payment. The settlement also includes various benefits and protections for drivers, such as paid sick leave, occupational accident insurance, and paid family medical leave insurance.
One significant aspect of the settlement is that Uber and Lyft have agreed to stop supporting a proposed ballot initiative that would redefine drivers as independent contractors. This measure, similar to one passed in California in 2020, is currently facing ongoing litigation. While drivers will continue to be classified as independent contractors, this settlement marks a victory for the ride-hailing companies.
The litigation against Uber and Lyft began in 2020 when the state accused them of improperly treating drivers as independent contractors rather than employees. The companies argued that they are technology platforms facilitating connections between drivers and riders, rather than transportation companies. However, the Massachusetts attorney general’s office maintained that the drivers had been underpaid and denied basic benefits for years.
State Attorney General Andrea Joy Campbell expressed her satisfaction with the settlement, stating that it holds Uber and Lyft accountable for their actions and ensures a standard of dignity for every driver across the state. Governor Maura Healey also commended the settlement, emphasizing that it is about fairness for drivers.
Uber acknowledged the agreement’s significance, highlighting that it provides drivers with new protections and benefits while maintaining their ability to work independently. The company sees this as an opportunity to resolve historical liabilities and create a new operating model that balances flexibility and benefits. Lyft’s Executive Vice President of Driver Experience, Jeremy Bird, called the settlement a “huge win” for Massachusetts drivers, securing their freedom to earn on their own terms.
This settlement is an important step forward for Uber and Lyft in Massachusetts. It builds on progress made in other states like California, Minnesota, New York, and Washington. The companies are demonstrating their commitment to addressing driver concerns and improving working conditions. By providing drivers with higher wages, benefits, and protections, Uber and Lyft are working towards a more equitable and fair relationship with their drivers.
