FX.co ★ Uber, Lyft Settle With Massachusetts AG To Pay $175 Mln, Minimum Pay To Drivers

Uber Technologies, Inc. and Lyft, Inc. have reached a landmark settlement with the Massachusetts Attorney General, agreeing to establish a minimum pay rate of $32.50 per hour for their drivers. This settlement also ensures a range of benefits and protections for the drivers.

The two companies have consented to a total payment of $175 million to the state to address allegations of violating Massachusetts wage and hour laws. The majority of this sum will be distributed among current and former drivers, with Uber contributing $148 million and Lyft $27 million.

Attorney General Andrea Joy Campbell heralded the settlement as a historic victory in the case initiated in 2020, which sought to grant Uber and Lyft drivers access to fundamental benefits and protections.

Effective August 15, every driver in Massachusetts will be assured a minimum earning of $32.50 per hour for the time spent traveling to pick-ups and during rides.

From March 2025 onwards, drivers who average at least 15 hours per week en route to pick-up or with passengers, combining their time between both Uber and Lyft, will receive a cash stipend to assist with the costs of a qualifying health plan. Those averaging at least 25 hours per week will qualify for a full stipend.

Both companies will offer occupational accident insurance at no additional cost to the drivers. This policy will provide $1 million in coverage for medical expenses and disability payments if drivers are injured while working on the platform. This insurance coverage will commence on October 1.

Starting November 1, drivers will accrue paid sick leave at a rate of one hour for every 30 hours spent on the job, capped at 40 hours per year. Uber and Lyft are also required to update their driver applications to allow drivers to view and claim their sick leave directly within the app.

Additionally, beginning October 1, all drivers will be eligible for a quarterly payment that covers half the cost of enrolling in the state's Paid Family Medical Leave insurance program.

This settlement resolves the multi-year litigation against Uber and Lyft, who had sought to alter state employment laws through a 2024 ballot initiative. Had they succeeded, drivers would have faced substandard protections and an earnings standard that failed to guarantee the minimum wage.

AG Campbell stated, "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."