Uber, Lyft to pay Massachusetts drivers minimum wage, provide other benefits

Uber (UBER) and Lyft (LYFT) reached an agreement with the Massachusetts Attorney General’s Office to pay ride-share drivers in the state a minimum wage and give them other benefits while still classifying them as independent contractors. Starting in March 2025, drivers who average at least 15 hours en route to pick up or with a passenger per week in a quarter will receive a cash stipend towards the cost of a qualifying health plan. Qualifying drivers averaging at least 25 hours per week between the two companies will be eligible for a full stipend, while those averaging between 15 and 25 hours may be eligible for a half stipend. Starting August 15, each Massachusetts driver will be guaranteed minimum earnings of $32.50 per hour for time spent on the way to the pickup and during a ride. For each two week earnings period, Uber will compare the driver’s total earnings against the earnings floor and top up the driver’s pay if it is below the earnings floor. Ensuring the pay guarantee is met over a period of two weeks, rather than on each trip, helps to keep trips affordable for riders. That’s why this same standard was adopted by voters in California, the Attorney General in New York, and the legislature in Minnesota. Uber said it would provide occupational accident insurance and, starting November 1, will allow drivers to accrue a bank of paid sick leave at a rate of one hour of sick pay for every 30 hours spent en route or with a passenger in the vehicle. Lyft, meanwhile, said that al ldrivers will also be eligible to receive, among other things, paid sick leave, paid family and medical leave, occupational accident insurance coverage, and a first-in-the-nation portable healthcare fund. Lyft added that it Lyft has agreed to pay $27M, most of which will go into a driver fund to be distributed by the Massachusetts Attorney General’s Office.