Driving for Change

Enhanced driver benefits

A recent settlement between the state of Massachusetts and two leading transportation platforms, Uber and Lyft, promises a wage increase and enhanced benefits to its drivers.  In addition, the settlement halts the attempt of the two companies to propose an intended 2024 ballot question that would support the classification of drivers as independent contractors, with limited benefits and without the guarantee of minimum wage.  The initiative to essentially change employment laws in the state of Massachusetts was initially countered by the state with its own ballot question that would allow drivers the opportunity to unionize.

With the settlement, Uber and Lyft drivers are now afforded various benefits, such as a minimum payment standard of $32.50 per hour.  Drivers who work for both companies may now pool their hours to acquire a health insurance stipend that would allow them to accept coverage under the Massachusetts Health Connector.  They also have the potential to earn a separate stipend to pay for access to Massachusetts’ paid family and medical leave plan.  Sick time is an additional benefit; and for every 30 hours worked, up to 40 hours a year, drivers may earn one hour of wages in sick time.  Under the settlement, Uber and Lyft are also required to adjust their applications to allow drivers to review and cash in their sick days.

At its origin, the lawsuit intended to rectify the alleged violations against Massachusetts wage and hour laws, committed by both companies.  The opposing parties reached a settlement, which not only affords the aforementioned benefits, but also grants compensation in the amount of $175 million.  A majority of these awarded damages will be paid to both past and current drivers.  In response to the settlement, Uber issued a statement that appeared in favor of the resolution and the impending possibility for a stronger business model that offers flexibility, accommodates the company’s drivers, and adheres to Massachusetts laws.