Uber and Lyft will pay Massachusetts drivers some of the highest guaranteed wages in the country under a landmark deal with state prosecutors that also brought a halt to a years-long campaign seeking to rewrite how state law defines those workers.
Attorney General Andrea Campbell and the companies agreed on a $175 million settlement Thursday evening that ends the nearly four-year-old lawsuit against Uber and Lyft, lays out a slew of new wage, benefit and job protection requirements, and sidesteps the legal question at the heart of the case.
The deal secures a sizable pay increase for tens of thousands of drivers and guarantees they will soon be able to access paid sick leave, occupational accident insurance and some degree of health benefits — some of which, prosecutors alleged, the companies unfairly failed to provide for years.
Uber and Lyft will no longer face the prospect of a judge declaring that their status quo arrangement with drivers is illegal in Massachusetts, and they can continue to define their drivers as independent contractors.
Both companies plan to continue offering rides in Massachusetts and signaled they expect no major impacts on operations. An Uber official said prices for riders might increase slightly, but added that the company has minimized disruption in other states like New York where the popular apps have been required to begin paying higher wages to drivers.
“For years, these companies have underpaid their drivers and denied them basic benefits,” Campbell said in a statement. “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.”
Altering the political landscape this summer and fall, the settlement also prompted gig economy power players to suspend their campaign for a ballot question that would have defined drivers as independent contractors…