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Uber and Lyft have reached a settlement with the attorney general of Massachusetts, agreeing to pay their drivers in the state a minimum rate with benefits. The $175 million settlement resolves claims that the companies violated state labor laws, with the majority of the money allocated to gig workers. Drivers will continue to be classified as independent contractors, a victory for the ride-hailing companies.

The settlement includes benefits such as health insurance for drivers working at least 15 hours a week, expanded accident insurance, and a minimum pay rate of $32.50 per hour spent on a ride. This agreement follows similar pay and benefit provisions in other states like New York, California, and Washington.

Massachusetts Attorney General Andrea Joy Campbell stated that the agreement holds Uber and Lyft accountable and provides drivers with guaranteed minimum pay, paid sick leave, occupational accident insurance, and health care stipends. Both companies emphasized that the settlement is a win for their drivers and that maintaining independent contractor status was crucial for flexibility.

The lawsuit against Uber and Lyft was originally filed in 2020 by the former attorney general, Maura Healey. The settlement also averts a potential ballot initiative fight over driver classification in Massachusetts in November. This agreement sets a precedent for fair treatment of gig workers and represents progress towards independent, flexible work with dignity in the 21st century.

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