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Uber And Lyft Agree To Pay Massachusetts Drivers Minimum Wage And Benefits
https://www.whatjobs.com/news/usa/us-employment-news/uber-and-lyft-agree-to-pay-massachusetts-drivers-minimum-wage-and-benefits
By Nithya Bose in Business News, posted June 30, 2024
Uber and Lyft have agreed to provide ride-share drivers in Massachusetts with a minimum wage and other benefits while maintaining their status as independent contractors.
This marks a milestone in the companies’ ongoing efforts to uphold their gig-worker models nationwide.
The settlement, reached with the Massachusetts Attorney General’s office, concludes a protracted legal dispute over driver classification.
Under the agreement, drivers earn a guaranteed minimum of $32.50 per active hour on trips.
They will receive additional benefits, such as paid sick leave, based on their working hours.
Massachusetts Attorney General Andrea Joy Campbell said: “For years, these companies have underpaid their drivers and denied them basic benefits. Today’s agreement holds Uber and Lyft accountable.”
Uber and Lyft will also collectively pay $175 million to settle claims of wage and hour law violations.
Uber’s Chief Legal Officer Tony West said: “This agreement is an example of what independent, flexible work with dignity should look like.”
This deal follows similar legislative actions in other states, such as Washington and Minnesota.
These have seen minimum wage laws for ride-hailing app drivers introduced.
The 2020 Massachusetts lawsuit against Uber and Lyft argued drivers should be classified as employees.
This would entitle them to minimum wage, overtime pay, and sick leave.
The companies countered by supporting a ballot measure to let voters decide on the classification issue.
The lawsuit is resolved with this settlement, and the companies will no longer pursue the ballot measure.
The benefits outlined in the Massachusetts agreement mirror those in California.
Proposition 22, an industry-sponsored ballot measure passed in 2020, maintained drivers' independent contractor status while introducing earnings guarantees and other benefits.
"For years, these companies have underpaid their drivers and denied them basic benefits. Today’s agreement holds Uber and Lyft accountable"
Uber riders in California experienced a fare increase of 30 to 80 cents per trip following Prop 22’s implementation.
This is likely to be seen in Massachusetts with the new fees.
Despite ongoing legal challenges to Prop 22 in the California Supreme Court, Uber and Lyft have leveraged the measure to advocate for similar legislation nationwide.
Washington and Minnesota have followed suit, enacting laws that preserve the gig-worker model while offering new benefits to drivers.
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In 2022, a similar agreement in New York saw Uber and Lyft paying a combined $328 million to resolve allegations of wage theft while maintaining the independent contractor model.
This included a minimum earnings guarantee and enhanced working conditions.
Lyft’s Executive Vice President of Driver Experience, Jeremy Bird, said:“We’re thrilled to reach an agreement that works for everyone, and builds on similar progress we’ve made in states like New York, California, Minnesota, and Washington.”
However, Uber Eats and other food-delivery services have reported negative impacts from recent wage increases in cities like New York and Seattle.
Uber Eats introduced a $4.99 fee per order in Seattle, which resulted in a 45 percent drop in orders year over year.
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