50 hourly minimum pay standard for their drivers in Massachusetts and pay a total of $175 million to settle a lawsuit filed by the state's attorney general. The lawsuit alleged that the companies improperly classified drivers as independent contractors, resulting in lower compensation than what would be legally mandated for employees.

Along with the monetary settlement, Uber and Lyft have also committed to providing additional benefits to their drivers. These include paid sick leave, accident insurance, and healthcare stipends. Furthermore, the companies have agreed to cease funding or supporting a proposed ballot initiative that aimed to solidify the status of app-based drivers as contractors.

Attorney General Andrea Joy Campbell hailed the agreement as a significant step towards holding Uber and Lyft accountable for the treatment of their drivers. Campbell emphasized that the settlement ensures most drivers' desire to work on their own terms while receiving important benefits that are typically guaranteed to employees.

Under the terms of the settlement, Uber will pay $148 million, while Lyft will pay $27 million to the state. At least $140 million of this sum will go directly to the drivers, as stated in a court filing.

The announcement by Campbell comes concurrently with Massachusetts' highest court approving a measure to allow voters to decide on the industry-backed ballot initiative, as well as a labor-backed proposal that would enable drivers to unionize. This development coincides with the closing arguments in a non-jury trial initiated by Campbell's predecessor, Governor Maura Healey, in 2020.

Campbell had been seeking a ruling from the court, designating Uber and Lyft drivers as employees under state law, thereby granting them essential benefits such as a minimum wage, overtime pay, and earned sick time. The settlement marks a substantial victory in Campbell's ongoing efforts to rectify the underpayment and denial of benefits to gig economy drivers by these companies.

Comparatively, the settlement provides drivers with even greater benefits and pay than the previous November settlement with the state of New York, as well as the legislation enacted in Minnesota in May of this year.

During the trial, Uber and Lyft vehemently defended their business models, asserting that Campbell's office had misconstrued their operations. They argued that a ruling in favor of employee status could result in service cuts or even the discontinuation of operations in Massachusetts. Notably, Uber, Lyft, DoorDash, and Instacart were backers of the ballot measure committee called Flexibility and Benefits for Massachusetts Drivers, which sought to secure contractor status for app-based drivers. However, following the settlement, the campaign has announced that it will no longer move forward with the initiative.

It is worth mentioning that the ride-hailing industry's successful $200 million campaign in California in 2020, which passed a similar measure solidifying app-based drivers as independent contractors, is still subject to ongoing litigation. The outcome of these lawsuits will likely have far-reaching implications for the gig economy and the rights and benefits of its workers.

Overall, the settlement between Uber, Lyft, and Massachusetts represents a significant victory for the state's drivers, ensuring fairer pay and improved benefits, while setting a precedent for potential changes in the classification of gig economy workers nationwide.