BOSTON, Nov 6 (Reuters) - Massachusetts voters on

Tuesday approved a ballot measure that would allow ride-share

drivers to unionize, becoming the first U.S. state to allow

drivers for app-based companies like Uber ( UBER ) and

Lyft ( LYFT ) to do so.

With 94% of precincts reporting, 53.9% of voters

endorsed a novel framework that would allow ride-share drivers

who are considered by the companies to be independent

contractors to organize and bargain collectively over pay and

benefits, according to the Associated Press, which called the

vote mid-Wednesday.

Supporters have said the ballot measure could provide a

model for other states to let Uber ( UBER ) and Lyft ( LYFT ) drivers unionize and

inspire efforts to organize them around the United States.

The Massachusetts vote was the latest front in a years-long

battle in the United States over whether ride-share drivers

should be considered to be independent contractors or employees

entitled to benefits and wage protections. Studies have shown

that using contractors can cost companies as much as 30% less

than employees.

Drivers for Uber ( UBER ) and Lyft ( LYFT ), including approximately 70,000 in

Massachusetts, do not have the right to organize under the

National Labor Relations Act, a federal law that covers only

actual employees.

Under the Massachusetts measure, known as Question 3,

drivers could form a union after collecting signatures from at

least 25% of active drivers in Massachusetts. Under the measure,

companies could form associations to allow them to jointly

negotiate with the union during state-supervised talks.

The measure was backed by the Service Employees

International Union and the International Association of

Machinists and was endorsed by several top political leaders,

including Andrea Campbell, the state's Democratic attorney

general.

Campbell in June secured a settlement with Uber ( UBER ) and Lyft ( LYFT )

requiring them adopt a $32.50 hourly minimum pay standard for

Massachusetts drivers and pay $175 million to resolve claims

they had improperly treated drivers as independent contractors,

rather than employees.

The companies as part of the settlement abandoned their

support of a since-dropped ballot measure that would have

codified into law the drivers' status as contractors. But the

settlement stopped short of declaring the drivers employees.

Uber ( UBER ) and Lyft ( LYFT ) opted not to campaign against Question 3,

though both said they had some concerns with certain language in

the measure that they hoped could be addressed by the state

legislature.

Question 3 had been put forward before the industry dropped

its separate ballot proposal, and its supporters argued that it

provided the best path forward for drivers to secure better

working conditions post-settlement.

Question 3 divided the local labor movement, with some

activists saying it did not go far enough. Some opponents also

had argued it may conflict with federal law and be open to a

legal challenge.

(Reporting by Nate Raymond in Boston, Editing by Will Dunham

and Alexia Garamfalvi)