Massachusetts is home to tens of thousands of Uber and Lyft drivers, who are essential to the state’s transportation system and economy. For years, these companies have underpaid their drivers and denied them any opportunity to earn benefits like health care coverage and paid leave. But now that changes.
Thanks to litigation brought by the state attorney general’s office, Uber and Lyft will now have to fairly compensate every driver and provide them with essential benefits and protections. Going forward, Massachusetts Uber and Lyft drivers will make at least $32.50 per hour traveling to or with a passenger. This accounts for driver expenses like gas and maintenance, and it will increase annually as the cost of living rises.
Drivers will also be eligible for a health insurance subsidy, tied to their hours of work; for paid sick leave and family leave; and for free insurance coverage for injuries that they might suffer on the job. Additionally, the companies must pay $175 million, at least $140 million of which will go straight into the pockets of drivers who have been underpaid.
The settlement also guarantees greater transparency on rides before they are accepted — notably including how much the driver will be paid. And if a company deactivates a driver, that driver now has the right to an appeal.
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Uber and Lyft drivers disproportionately hail from poorer, more diverse neighborhoods. They are stretching every dollar to pay bills or put food on the table. The terms of this settlement are unprecedented in the United States, and it helps ensure that drivers can support themselves and their families.
The AG’s office pushed for and secured the best deal for drivers to ensure that they are compensated for past wrongdoing and provided with the pay and benefits they deserve moving forward.
Uber and Lyft had suggested that they were eager to meet the moment when the state demanded fairness from them, but their actions tell a different story.
In 2020, then-Attorney General Maura Healey initiated the lawsuit, alleging that Uber and Lyft were failing to comply with the state’s wage and hour laws. In response, the companies proposed a ballot initiative, which was on track to appear before voters in November and would have created a carve out to the wage and hour laws.
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Specifically, it would have permanently classified drivers as independent contractors and locked in a minimum pay well below minimum wage. But our settlement put an end to the ballot initiative and guarantees drivers about $10 per hour more than what the companies offered on the ballot.
The agreement ensures robust protections and benefits for drivers that should be available to every worker. And it is only the floor. State law should allow drivers to negotiate even greater protections. That’s why I support an initiative on the 2024 ballot that would give drivers the right to form a union and collectively bargain with Uber and Lyft for greater pay, benefits, and improved conditions of work.
The Commonwealth is better when the tens of thousands of drivers can work together toward these improvements, as the ballot initiative will allow. The settlement provides a strong foundation on which to build.
In the meantime, the attorney general’s office will continue to hold Uber and Lyft accountable through the enforcement provisions laid out in this agreement. All the while, Uber and Lyft drivers will be guaranteed the fairness, respect, and dignity they deserve.
Andrea Joy Campbell is attorney general of Massachusetts.
