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Uber and Lyft have reached an agreement to compensate drivers $32.50 per hour in a settlement in Massachusetts

A passerby walks past a sign offering directions to an Uber and Lyft ride pickup location (Via Steve Baker/Getty Images)

Drivers working for Uber and Lyft in Massachusetts will now earn at least $32.50 per hour under a settlement announced by Attorney General Andrea Campbell on Thursday. The agreement also includes various benefits and protections for drivers.

As part of the settlement, the two companies will pay a total of $175 million to Massachusetts to resolve allegations of violating state wage and hour laws. A significant portion of this amount will go to current and former drivers.

Campbell highlighted that the settlement ends her office’s lengthy legal battle with Uber and Lyft and prevents their attempt to change state employment laws through a ballot initiative in 2024. She argued that this initiative would have left drivers with insufficient protections and an earnings standard that did not guarantee minimum wage.

Thousands of cars on the highway (Via Hugo Simmons/Shutterstock)

“For years, these companies have paid drivers less than they deserve and denied them basic benefits,” Campbell stated in a press release. “Today’s agreement ensures that Uber and Lyft are held accountable and provides drivers in Massachusetts with guaranteed minimum pay, paid sick leave, occupational accident insurance, and health care allowances for the first time.”

Governor Maura Healey, a Democrat, described the settlement as delivering historic wages and benefits to correct past injustices and ensure fair pay for drivers moving forward.

Lyft acknowledged that the settlement resolves a recently concluded trial lawsuit and avoids the need for a ballot initiative campaign scheduled for November.

Uber also expressed its support for the agreement, portraying it as a model of dignified, independent work in the modern era.

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