Settlement reached with Uber and Lyft to pay drivers ‘landmark wages, benefits,’ AG says

BOSTON — A “historic” settlement has been reached with Uber and Lyft to pay its drivers a minimum of $32.50 per hour, paid sick leave and “a suite of benefits and protections,” Attorney General Andrea Joy Campbell said Thursday.

The move ensures that tens of thousands of Uber and Lyft drivers in Massachusetts will be guaranteed minimum pay.

Uber and Lyft will also pay a combined total of $175 million to the state to resolve allegations that the company violated Massachusetts wage and hour laws. Campbell said “a substantial majority” of the settlement will be paid as restitution to current and former drivers who were underpaid by the companies.

The settlement resolves the Attorney General Office’s multi-year litigation against Uber and Lyft, Campbell said. It also stops companies from trying to rewrite state employment law through a 2024 ballot initiative which would have resulted in drivers receiving inadequate protections and an earnings standard that would not guarantee minimum wage.

“For years, these companies have underpaid their drivers and denied them basic benefits. 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 health care stipends,” Campbell said in a statement. “I want to thank my team, whose hard work has secured a standard of dignity for every driver across the state, and our labor allies and the drivers themselves for the tireless work and advocacy.”

In a statement Thursday, Uber said the settlement agreement “gives drivers access to new protections and benefits, including the nation’s first portable health insurance benefit fund, while preserving their ability to work independently.”

“This agreement is an example of what independent, flexible work with dignity should look like in the 21st century. We are thrilled to see more policymakers supporting portable benefits and innovative frameworks to improve independent work,” Uber said in its statement.

“In taking this opportunity, we’ve resolved historical liabilities by constructing a new operating model that balances both flexibility and benefits. This allows both Uber and Massachusetts to move forward in a way that reflects what drivers want and demonstrates to other states what’s possible to achieve,” Uber said. “We hope to engage other policymakers, drivers, advocates and stakeholders around the world to forge similar solutions.”

Gov. Maura Healey said in a statement that the lawsuit against Uber and Lyft “was always about fairness for drivers.”

The settlement “delivers historic wages and benefits to right the wrongs of the past and ensure drivers are paid fairly going forward,” Healey said.

“Thanks to Attorney General Campbell, Uber and Lyft’s free ride is over. This settlement includes a comprehensive package of strong wages, benefits and protections for the drivers that these corporations have been exploiting for years. We deeply appreciate AG Campbell’s hard work holding these corporations rightfully accountable to Massachusetts employment laws,” Massachusetts AFL-CIO President Chrissy Lynch said in a statement.

Thursday’s agreement mandates the following:

· Drivers receive a minimum of $32.50 per hour for time spent traveling to pick up riders and driving them to their destination, adjusted annually for inflation.

· Drivers receive guaranteed paid sick leave, earning one hour of sick pay for every 30 hours worked, up to a maximum of 40 hours per year. As part of the agreement, Uber and Lyft must update their driver applications so drivers are able to view and claim their sick leave directly in the app.

· Drivers receive a paid stipend to buy into the state’s paid family and medical leave program.

· Pooled health insurance benefit. For the first time anywhere, Uber and Lyft will allow drivers to pool their hours driving for the two companies to obtain access to a health insurance stipend. Anyone who drives for more than 15 hours per week—for either or both companies—will be able to earn a health insurance stipend to pay for a plan on the Massachusetts Health Connector.

· Drivers are eligible for occupational accident insurance paid by the companies for up to $1 million in coverage for work-related injuries.

The agreement also stipulates the following provisions for Uber and Lyft:

· Provide drivers with information about the length of a trip, the destination, and the expected earnings before they are expected to accept a ride.

· Provide drivers with detailed pay information about their earnings and how much a rider has paid once a trip is completed.

· Cannot discriminate against drivers based on race, religion, national origin, sex, sexual orientation, gender identity, disability or other protected characteristic.

· Cannot retaliate against drivers who have or are perceived to have filed a complaint about the companies with the Attorney General’s Office or sought payment or other benefits under today’s settlement.

· Must offer drivers in-app chat support with a live person in English, Spanish, Portuguese, and French.

· Must perform an annual audit and provide detailed information about compliance with the terms of the settlement agreement to the Attorney General’s Office.

· Must provide drivers with information about why they have been deactivated and create an appeals process that allows drivers to challenge the deactivation.

· Must provide the Attorney General’s Office with the information it needs to ensure compliance.

Drivers Demand Justice, a coalition that has organized thousands of rideshare drivers who are seeking union rights, applauded the settlement.

“Drivers will see improvements thanks to the settlement reached with the rideshare companies today, and we applaud Attorney General Campbell and her team for achieving concessions from the companies. It is essential that drivers have a union to ensure these concessions are protected and improved upon,” Drivers Demand Justice said in its statement.

“The settlement underscores once again that drivers have been chronically exploited by these companies, and demonstrates the urgency of their need for a clear and immediate pathway to form a union, so they can have a voice to promote their well-being and defend their rights,” the statement said. “Rideshare drivers are calling on the Massachusetts legislature to act swiftly to grant union rights to drivers, and in so doing, improve the lives of tens of thousands of families in cities and towns across the Commonwealth.”

The coalition has proposed a bill - the Rideshare Driver Justice bill - to the legislature, and is also supporting a ballot question, either of which would give drivers the right to form a union.

This is a developing story. Check back for updates as more information becomes available.

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