Uber and Lyft agreed to provide drivers with a minimum wage, paid sick leave and other benefits as part of a $175 million settlement that resolves a years-long legal battle with the state of Massachusetts.
Ride-share companies would be required to pay drivers a minimum wage of $32.50 an hour, provide one hour of paid sick leave for every 30 hours worked, offer benefits for participating in state paid family and medical leave programs, and allow drivers to pool their hours between companies to receive medical benefits.
Uber must pay $148 million to the state to settle alleged labor law violations, while Lyft must pay $27 million.
“For years, these companies paid their drivers low wages and denied them basic benefits,” Massachusetts Attorney General Andrea Joy Campbell said in a statement.
“I would like to thank my team who have worked so hard to ensure a standard of dignity for all drivers across the state, and to the unions and the drivers themselves for their tireless efforts and support,” she added.
Uber and Lyft also touted the settlement as a win, highlighting that the agreement gives drivers new benefits while maintaining flexibility.
“This agreement is an example of what dignified, independent and flexible work should look like in the 21st century,” Uber’s chief legal officer Tony West said in a press release.
“We’ve taken this opportunity to resolve our existing liabilities by building a new operating model that balances both flexibility and profit,” he added. “This will enable Uber and Massachusetts to move forward in a way that reflects what drivers want and shows other states what can be accomplished.”
The settlement comes shortly after the Massachusetts Supreme Court approved passage of a ballot measure that would allow voters to decide whether ride-share and delivery drivers should be employees or independent contractors.
But the agreement eliminates the need for a vote in November, the attorneys general and Lyft noted in a press release.
“This is a big win for Massachusetts drivers, ensuring the freedom to earn as much as they want, when and where they want,” Jeremy Byrd, Lyft executive vice president of Driver Experience, said in a statement.
