Uber and Lyft Will Now Pay Drivers $32.50 an Hour Under ‘Nation-Leading’ Settlement With Massachusetts

By: Alex Trent | Published: Jun 28, 2024

Drivers for the rideshare companies Uber and Lyft in Massachusetts will now earn a minimum pay standard of $32.50 under a settlement that the state’s attorney general is calling “nation-leading.”

Massachusetts had a multi-year-long case levied against the rideshare companies over allegations that they had violated the state’s wage and hour laws.

Settlement Announcement

A statement released through Massachusetts Attorney General Andrea Joy Cambell’s office on Thursday announced the settlement terms with Uber and Lyft that “secures landmark wages, benefits and protections for drivers.”

Advertisement
A close-up of a judge holding a wooden gavel on a wooden surface.

Source: KATRIN BOLOVTSOVA/Pexels

“[The AG’s Office] has secured a historic settlement in its case against Uber and Lyft that requires a minimum pay standard of $32.50 per hour and a suite of benefits and protections for drivers. Uber and Lyft will also pay a combined total of $175 million to the state to resolve allegations that the companies violated Massachusetts wage and hour laws, a substantial majority of which will be distributed to current and former drivers,” the statement said.

Advertisement

AG Statement

Attorney General Cambell was quoted in the statement on the settlement agreement accusing Uber and Lyft of underpaying their drivers and denying them benefits.

Advertisement
A man on a bike with an Uber Eats bag on his back.

Mak/Unsplash

“For years, these companies have underpaid their drivers and denied them basic benefits. Today’s agreement holds Uber and Lyft accountable, and provides their drivers, for the very first time in Massachusetts, guaranteed minimum pay, paid sick leave, occupational accident insurance, and health care stipends,” said AG Campbell.

Fairness For Drivers

State governor Marua Healey applauded the settlement of the state’s lawsuit and hopes the new concessions will right the wrongs of the past.

Advertisement
3D square icons of the Uber and Lyft logos leaning against each other, Uber on the left in a black square, Lyft on the right in a pink square

Source: Mariia Shalabaieva/Unsplash

“Our lawsuit against Uber and Lyft was always about fairness for drivers. I congratulate Attorney General Campbell and her team for securing this settlement that delivers historic wages and benefits to right the wrongs of the past and ensure drivers are paid fairly going forward,” said Healey.

Free Rides Are Over

President of Massachusetts AFL-CIO Chrissy Lynch, a state labor council, was content with the package of benefits that will be offered to workers, declaring that these companies’ “free ride is over.”

Advertisement
Close-up of vehicles lined up in traffic during twilight, highlighting the glow of tail lights and headlights in a congested urban setting

Source: Nabeel Syed/Unsplash

“This settlement includes a comprehensive package of strong wages, benefits and protections for the drivers that these corporations have been exploiting for years. We deeply appreciate AG Campbell’s hard work holding these corporations rightfully accountable to Massachusetts employment laws,” said Lynch.

Statement From Uber

In a press release published Thursday, Uber emphasized the great opportunity the settlement was to provide flexibility and benefits to its drivers.

A smartphone with the Uber app loading.

Tingey Injury Law Firm/Unsplash

“This agreement is an example of what independent, flexible work with dignity should look like in the 21st century. We are thrilled to see more policymakers supporting portable benefits and innovative frameworks to improve independent work,” said Uber.

Advertisement

Lyft’s Comments

In a statement by Lyft, the company’s Executive Vice President of Driver Experience Jeremy Bird called it a “huge win.”

A person holds a black smartphone that is open to Lyft, a blurry red booth and a white table in the background.

Source: Austin Distel/Unsplash

“This is a huge win for Massachusetts drivers that secures their freedom to earn when, where, and however long they want. On any given day, flexible work on the Lyft platform provides an average 8,500 drivers in Massachusetts the independence to earn while attending school, caring for loved ones, chasing dreams, or providing for their family,” said Bird.

Advertisement

Terms of the Settlement

In addition to guaranteeing that all Massachusetts app-based drivers will be making $32.50 per hour, Lyft has agreed to pay $27 million into a driver fund that the AG’s office will distribute.

A row of $100 dollar bills pictured on top of one another.

Source: Engin Akyurt/Unsplash

Uber as part of the agreement will pay $148 million into this fund, bringing the grand total to a combined $175 million extracted from these companies in the settlement.

Advertisement

Purpose of the Fund

According to the AG’s office, the fund will serve “as restitution to current and former drivers who were underpaid by the companies.”

View from inside a Kia electric vehicle, showing a person's hands on the steering wheel, with the car's digital dashboard displayed in the background

Source: Eugene Chystiakov/Unsplash

In the coming weeks, the state will announce more information about who can qualify for restitution payments and how the filing process will work.

Advertisement

Guaranteed Sick Leave

Another huge win for rideshare drivers secured in the agreement is guaranteed sick leave based on their hours worked.

A woman coughing into her hand while she sits on a couch.

Source: Annie Spratt/Unsplash

“Drivers receive guaranteed paid sick leave, earning one hour of sick pay for every 30 hours worked, up to a maximum of 40 hours per year. As part of the agreement, Uber and Lyft must update their driver applications so drivers are able to view and claim their sick leave directly in the app,” said the AG’s office.

Advertisement

Insurance Coverage

In what the AG’s office is describing as a first, Uber and Lyft will now provide a stipend for health insurance from a pool for any driver who works more than 15 hours per week.

A man writing on a piece of paper.

Scott Graham/Unsplash

This insurance stipend can be used to pay for an insurance plan on the Massachusetts Health Connector.

Advertisement

Numerous Protections

The state also managed to secure a litany of protections for drivers that protect them against discrimination and retaliation from the companies.

A gray car with an illuminated Uber sign on its roof, captured in a street scene at dusk. The car is part of a line of vehicles in traffic

Source: Viktor Avdeev/Unsplash

Uber and Lyft are also required to comply with an annual audit and provide detailed pay information to drivers about their earnings before they are required to accept a ride from a customer.

Advertisement