State prosecutors have reached a deal with Uber and Lyft that will require the companies to pay Massachusetts $175 million, increase driver salaries and offer a host of new benefits, officials announced Thursday.
Attorney General Andrea Joy Campbell’s office said her team has reached a settlement with the gig economy giants that resolves a 2020 lawsuit her predecessor, now-Gov. Maura Healey, filed alleging Uber and Lyft violated state labor laws.
The settlement will require Uber to pay the state $148 million and Lyft to pay the state $27 million, most of which will become restitution payments to current and former drivers, Campbell’s office said.
The companies also agreed to start providing drivers with at least $32.50 per hour for the time they spend traveling to pick up passengers and transport them to their destination, which Campbell’s team said is “the first time the dozens of “Thousands of Uber and Lyft drivers in Massachusetts will be guaranteed a minimum wage.”
As part of the settlement, Uber and Lyft agreed not to campaign or fund the ballot issue they have been pursuing for years, which would rewrite state law in their favor by defining drivers as independent contractors.
Uber and Lyft officials confirmed the company will withdraw its support for the measure, which on Thursday survived an eligibility challenge before the state’s highest court.
It’s unclear whether other companies that have backed the ballot issue that were not involved in the attorney general’s lawsuit or settlement, notably DoorDash and Instacart, intend to move forward and put the measure before voters.
