Here’s Why Uber & Lyft Boosted Massachusetts Drivers’ Minimum Wage Pay To $32.50 An Hour

FILE – A passerby walks past a sign offering directions to an Uber and Lyft ride pickup location at an airport, Feb. 9, 2021, in Boston. Drivers for Uber and Lyft will earn a minimum pay standard of $32.50 per hour under a settlement announced, Thursday, June 27, 2024, by Massachusetts Attorney General Andrea Campbell, a deal that also includes a suite of benefits and protections. (AP Photo/Steven Senne, File)

Uber and Lyft drivers in Massachusetts will soon see a boost in their paychecks. According to the Associated Press, the state’s attorney general won a case that drove the minimum wage pay per hour to $32.50.

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Massachusetts AG Andrea Campbell led the litigation on behalf of the state, which will receive $175 million in combined funds from Uber and Lyft. AP reports that Campbell alleged both companies violated the state’s wage and labor laws. A “substantial majority” of the multi-million settlement will end up in the pockets of current and former drivers.

“For years, these companies have underpaid their drivers and denied them basic benefits,” AG Campbell said in a statement. “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.”

How Will Massachusetts Drivers Benefit?
The settlement—announced on Thursday (June 27)—also targets other driver benefits and protections.

For example, drivers will now earn one hour of sick day pay for every 30 hours worked and can track and claim their sick leave in their app. Both companies will also provide stipends to help drivers purchase the state’s paid family and medical leave program.

The new deal will also benefit drivers working for both rideshare companies. For example, a driver working 15 or more hours a week with Lyft, Uber, or both will be eligible for a health insurance stipend to pay for a Massachusetts Health Connector.

Another benefit is allowing drivers to see critical information, such as trip length, destination, and expected earnings, before accepting a ride. Additionally, the companies must provide live in-app support for their drivers with English, Spanish, Portuguese, and French speakers.

If either company deactivates a driver’s account, they must inform the driver of the reason and create an appeals process.

Uber & Lyft Release Statements About Massachusetts Settlement
Both rideshare companies released statements following last week’s ruling. Uber acknowledged that the agreement is “an example of what independent, flexible work with dignity should look like in the 21st century.” 

The company also said, “In taking this opportunity, we’ve resolved historical liabilities by constructing a new operating model that balances both flexibility and benefits. This allows both Uber and Massachusetts to move forward in a way that reflects what drivers want and demonstrates to other states what’s possible to achieve.”

Lyft also embraced the minimum wage terms, calling it a “historic” change to “right the wrongs of the past and ensure drivers are paid fairly going forward.” 

“More importantly, it is a major victory in a multiyear campaign by Bay State drivers to secure their right to remain independent while gaining access to new benefits,” Lyft shared.

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