Uber, Lyft Settle With Massachusetts AG To Pay $175 Mln, Minimum Pay To Drivers

(RTTNews) - Rideshare and delivery network companies Uber Technologies, Inc. and Lyft, Inc. have agreed to a minimum pay standard of $32.50 per hour to its drivers, in a lawsuit settlement with Massachusetts Attorney General. The drivers are also entitled to a suite of benefits and protections.

The companies also agreed to pay a combined total of $175 million to the state to resolve allegations that they violated Massachusetts wage and hour laws. A substantial majority of the settlement payment would be distributed to current and former drivers. In the combined amount, Uber said it will pay $148 million, while Lyft will pay $27 million.

In a statement, AG Andrea Joy Campbell announced that her Office has secured the historic settlement in the case, which was filed in 2020 seeking a determination to consider Uber and Lyft drivers to basic benefits and protections.

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.

Further, 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, combining time spent driving with Uber and/or Lyft, 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.

The companies will provide occupational accident insurance at no cost to drivers. This insurance will provide drivers with $1 million in coverage for medical expenses, as well as disability payments if they are injured while driving on the platform and are unable to continue working. Coverage will begin October 1.

Beginning November 1, drivers will accrue a bank of paid sick leave at a rate of 1 hour of sick pay for every 30 hours spent en route or with a passenger in the vehicle, up to a maximum of 40 hours per year. As part of the deal, Uber and Lyft are required to update their driver applications so drivers are able to view and claim their sick leave directly in the app.

In addition, starting October 1, all drivers will be eligible for a quarter-end payment equal to half the cost of enrolling in the state's Paid Family Medical Leave insurance program.

The Office said the settlement resolves its multi-year litigation against Uber and Lyft, which were attempting to rewrite state employment law through a 2024 ballot initiative. If successful, the change would have resulted in drivers receiving inadequate protections and an earnings standard that would not guarantee minimum wage.

AG Campbell said, "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."