Uber and Lyft agreed to a settlement with the Massachusetts Office of the Attorney General, resolving the office’s multiyear litigation against the ridesharing companies.
The settlement includes rules on wages, benefits and protections for drivers, the office said in a Thursday (June 27) press release. It also ends a ballot initiative concerning state employment law that Uber and Lyft supported.
The litigation focused on allegations that the companies violated the state’s wage and hour laws, according to the release.
“For years, these companies have underpaid their drivers and denied them basic benefits,” Attorney General Andrea Joy Campbell said in the release. “Today’s agreement holds Uber and Lyft accountable and provides their drivers, for the very first time in Massachusetts, guaranteed minimum pay, paid sick leave, occupational accident insurance and healthcare stipends.”
The lawsuit was filed in 2020 by Campbell’s predecessor, Maura Healey, who is now governor of Massachusetts.
Under the settlement agreement, drivers will receive a minimum of $32.50 per hour for time spent traveling to pick up riders and transporting them to their destinations; guaranteed paid sick leave; a paid stipend to buy into Massachusetts’ paid family and medical leave program; a pooled health insurance benefit that includes hours spent driving for either or both rideshare companies; and eligibility for occupational accident insurance, according to the release.
In addition, Uber will pay $148 million, Lyft will pay $27 million and most of that money will be distributed as restitution to drivers — both current and former — who were underpaid by the companies, the release said.
Uber said in a Thursday press release that the settlement delivers flexibility and benefits for Massachusetts drivers, preserving their ability to work independently, and that the company hopes to forge similar agreements with policymakers around the world.
“This agreement is an example of what independent, flexible work with dignity should look like in the 21st century,” Uber Chief Legal Officer Tony West said in the release. “We are thrilled to see more policymakers supporting portable benefits and innovative frameworks to improve independent work.”
Lyft said in a Thursday press release that the agreement gives drivers the flexibility they currently enjoy and some, but not all, of the benefits that an employee would receive. It added that 35,000 drivers in Massachusetts use rideshare to supplement their income.
“We’re thrilled to reach an agreement that works for everyone and builds on similar progress we’ve made in states like New York, California, Minnesota and Washington,” Jeremy Bird, executive vice president of driver experience at Lyft, said in the release.
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