In AG’s $175M Uber, Lyft settlement, companies to now pay drivers $32.50 hourly min. wage during rides

State prosecutors agreed to a settlement with Uber and Lyft that will require the companies to pay Massachusetts $175 million, increase wages for drivers and offer a range of new benefits, officials announced Thursday.

Attorney General Andrea Campbell’s office said her team struck a deal with the gig economy giants that resolves a 2020 lawsuit her predecessor, now-Gov. Maura Healey, filed alleging that Uber and Lyft violated state labor laws.

The agreement 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 begin providing drivers at least $32.50 per hour for the time they spend traveling to pick up passengers and transporting them to their destination, which Campbell’s team said is “the first time that the tens of thousands of Uber and Lyft drivers in Massachusetts will be guaranteed minimum pay.”

As part of the settlement, Uber and Lyft agreed not to campaign for or fund the ballot question they have been seeking for years, which would rewrite state law in their favor by defining drivers as independent contractors.

Uber and Lyft officials confirmed that the company will pull its support from the measure, which earlier on Thursday survived an eligibility challenge before the state’s highest court.

It’s not clear if other companies that have backed the ballot question who were not involved in the attorney general’s lawsuit or settlement — especially DoorDash and Instacart — intend to press forward and put the measure before voters.

This is a developing story and will be updated.

This article was originally published on June 27, 2024.