Drivers in Massachusetts are set to receive a minimum wage of $32.50 per hour, along with new provisions for benefits and job protections, after Attorney General Andrea Campbell reached a $175 million settlement on Thursday. The settlement marks the conclusion of a nearly four-year-old lawsuit against Uber and Lyft.
The Long-Standing Litigation's Resolution
The yearlong litigation started when now-Governor Maura Healey filed a lawsuit accusing Uber and Lyft of wage and hour law violations in 2020. The lawsuit revolves around a critical section of state law known as the "ABC test."
Campbell's office argues that Uber and Lyft fail to meet all three criteria for classifying workers as independent contractors rather than employees, asserting that the on-demand rides offered by drivers constitute the core of the companies' operations, WBUR reported.
Uber and Lyft "have gotten a free ride for far too long," depriving drivers of essential workplace protections and benefits while making substantial profits, the then-Attorney General Maura Healey asserted.
Finally, Holding The Ride-Hailing Companies Accountable
Today's agreement ensures that Uber and Lyft are held accountable. Campbell touted that it marks the first time in Massachusetts that their drivers receive guaranteed minimum pay, paid sick leave, occupational accident insurance, and health care stipends.
Uber will be required to pay the state a total of $148 million, and Lyft will pay $27 million, with the majority designated as restitution payments for current and former drivers.
The settlement delivers historic wages and benefits to correct past injustices and ensure fair pay for drivers moving forward, Democratic Governor Healey added.
Instacart and DoorDash, alongside other coalition members seeking changes to driver status in state law, could have pursued further legal efforts independently. Uber and Lyft confirmed on Thursday evening that supporters no longer intend to submit a question for the November 5 ballot.
A Brighter Future for Uber and Lyft Drivers
Uber and Lyft drivers will now get $32.50 per hour spent traveling to pick up passengers and drive them to their destinations. They will also qualify for one-hour sick day pay for every 30 hours worked, which is maxed at 40 hours per year.
Drivers who work over 15 hours weekly can combine hours worked for Uber and Lyft to qualify for a health insurance stipend, which they can use to purchase a plan through Massachusetts Health Connector. They will also be eligible for up to $1 million in occupational accident insurance for work-related injuries, which will be paid by the two companies under this new agreement.
Driver apps must also be updated with in-app chat support in English, Spanish, Portuguese, and French for easier access to sick leave, trip duration, destination, and earnings estimates, as well as the appeals process in cases of deactivation.
Discrimination based on race, religion, national origin, sex, sexual orientation, gender identity, disability, or other protected identities or even retaliation against drivers who file complaints with the Attorney General's Office will also be strictly prohibited.
