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Uber and Lyft Agree to Pay Drivers $32.50 Per Hour in Massachusetts Settlement

An announcement on June 27, 2024 by Massachusetts Attorney General Andrea Campbell, Uber and Lyft drivers in Massachusetts will now earn a minimum of $32.50 per hour. The agreement was which concludes years of litigation to ensure a higher wage standard for drivers and also incorporates a range of benefits and protections.

Uber and Lyft Agree to Pay Drivers $32.50 Per Hour in Massachusetts Settlement

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Uber and Lyft drivers will earn a minimum of $32.50 per hour. This is an increase compared to previous earnings which often fell below minimum wage after accounting for expenses like fuel and vehicle maintenance.

The companies will pay a combined $175 million. A huge portion of this amount will be distributed to current and former drivers who were allegedly underpaid.

Drivers will accrue one hour of paid sick leave for every 30 hours worked up to a maximum of 40 hours per year.

Drivers will receive coverage of up to $1 million for work-related injuries. Drivers who work more than 15 hours per week will receive stipends to purchase health insurance through the Massachusetts Health Connector.

The settlement resolves legal battles between the Massachusetts Attorney General’s office and Uber and Lyft over wage and hour law violations.

It prevents a proposed 2024 ballot question that sought to reclassify drivers as independent contractors, which could have diminished their rights and protections.

The settlement establishes a model that balances the flexibility desired by drivers with essential benefits. Uber and Lyft will provide detailed trip information including length, destination and expected earnings before ride acceptance.

They will also introduce an appeals process for deactivations and offer in-app chat support in multiple languages.

The companies are prohibited from discriminating against drivers based on race, religion, national origin, sex, sexual orientation, gender identity, disability or other protected identities. The agreement protects drivers from retaliation if they file complaints with the Attorney General’s office.

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Drivers working at least 15 hours a week will now have access to a health insurance plan. The settlement includes expanded accident insurance.

Drivers will accrue up to 40 hours of paid sick leave annually provided at a rate of $20 per hour. This measure makes sure that drivers have a safety net in case of illness.

Starting next year, Uber and Lyft will provide drivers with portable health funds which are cash stipends to help pay for eligible health insurance plans.

This initiative is touted as the nation’s first portable health insurance benefit fund allowing drivers to carry their health benefits across different jobs.

Both companies will procure occupational accident insurance for drivers covering medical expenses and lost wages due to injuries incurred while on the job.

Uber and Lyft will now offer more detailed information about trips and expected earnings before drivers accept a ride.

Enhanced in-app chat support will be available in multiple languages improving communication and support for driver base.

Many drivers experience inconsistent tipping. Some have noted that tips are infrequent, even when they go out of their way to provide excellent service. International passengers often don’t tip possibly due to a lack of understanding of US tipping culture.

Tony West, Uber’s Chief Legal Officer described the settlement as a model for flexible and dignified work arrangements in the modern economy.

Jeremy Bird, Lyft’s Executive Vice President of Driver Experience hailed the agreement as a win for drivers maintaining their freedom to work flexibly while receiving fair compensation and benefits.

The lawsuit was initiated by former Attorney General Maura Healey in 2020 accused Uber and Lyft of misclassifying drivers and denying them rightful wages and benefits.

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