After years of litigation, Uber and Lyft finally reached a settlement with Massachusetts on Thursday, June 27. They agreed to pay their gig drivers a minimum wage plus perks.

According to Massachusetts Attorney General Andrea Joy Campbell, ride-hailing giants have long been underpaying their drivers and denying them basic benefits.

In 2020, former Attorney General Maura Healey was the first to initiate a lawsuit against Lyft and Uber.

Uber, Lyft to Shell Out $175 Million

In a statement from state authorities, the settlement calls for Uber and Lyft to pay $175 million to resolve allegations that the businesses broke state labor rules. The majority of the funds would be given to gig workers. However, drivers will still be seen as independent contractors rather than employees, which is good news for the firms.

In exchange for protecting its gig workers, the state received several perks, including health insurance for drivers working at least 15 hours per week, paid sick leave, increased accident coverage, and a minimum wage of $32.50 per hour.

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Ride-Hailing Giants Laud Drivers' Success

According to the New York Times, both Uber and Lyft issued comments praising the drivers' success in the settlement and stressing the importance of their continued position as independent contractors for the companies' ability to adapt to changing circumstances.

Uber's Chief Legal Officer Tony Wes said this agreement exemplifies the modern ideal of independent, adaptable, and dignified labor.

Lyft's Chief Policy Officer, Jeremy Bird, expressed his excitement at the agreement that works for the business and drivers. He added that this deal expands upon positive developments in Washington, Minnesota, California, and New York.

Minnesota most recently passed a measure with comparable compensation and benefit measures. Lobbying local governments against worker and labor organizations' attempts to raise driver compensation has cost Uber and Lyft tens of millions of dollars.

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