Uber and Lyft have settled a long-running legal dispute with the attorney general in Massachusetts by agreeing to pay their drivers a minimum rate and offer some benefits. The $175 million settlement resolves claims that the companies violated state labor laws, with most of the money going to gig workers. Drivers will continue to be classified as independent contractors, not employees.
The settlement includes a health insurance plan for drivers working at least 15 hours a week, expanded accident insurance, and a minimum pay rate of $32.50 per hour for time spent on a ride. This agreement follows similar provisions in other states like New York, California, Washington State, and Minnesota.
Massachusetts Attorney General Andrea Joy Campbell stated that the agreement holds Uber and Lyft accountable for underpaying drivers and denying them basic benefits. Both companies expressed satisfaction with the settlement, emphasizing the importance of maintaining independent contractor status for driver flexibility.
This settlement allows Uber and Lyft to avoid a potential ballot initiative fight over driver classification in Massachusetts, providing a resolution to the ongoing legal battle. It marks a significant step in ensuring fair compensation and benefits for gig workers in the ride-hailing industry, setting a precedent for similar agreements elsewhere in the country.
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