MASSACHUSETTS – Uber and Lyft drivers in Massachusetts are now among the best paid in the country after the state enacted a new minimum wage following a lawsuit against the companies.
Starting Thursday, rideshare drivers will earn at least $32.50 per hour of “work time” — that is, when drivers pick up, transport and drop off passengers. The pay rate includes the time they spend driving to a pickup location, as well as the time they spend waiting for a passenger to board. The pay rate will increase by 3% annually, or the rate of inflation, starting in January.
The new wage rate is part of a larger compensation agreement with Uber and Lyft brokered this year by Attorney General Andrea Campbell. Governor Maura Healey filed the original 2020 lawsuit against the companies when she was attorney general, accusing the ride-sharing companies of violating state wage laws.
“While they try to take credit for this in their ads, we need to be clear: They are paying because they have to, not because they want to,” Attorney General Andrea Campbell said Thursday. “My office has sued Uber and Lyft, held them accountable for exploiting their drivers, and secured an unprecedented package of benefits and protections for drivers, including a minimum wage, paid sick leave, health insurance subsidies and paid vacation.”
Rideshare drivers will also receive nearly four years of back pay totaling $140 million, as well as other benefits such as accident insurance, paid sick leave, health insurance and the right to appeal when the apps disable drivers. These benefits will take effect between September and March.
The agreement also ended a ballot initiative supported by the rideshare companies that addressed whether drivers should remain independent contractors or full-time employees. The companies have long fought to keep drivers independent contractors so they don’t have to worry about pay and benefits.
Campbell’s settlement will keep the drivers classified as independent contractors. The agreement also does not apply to other app-based employees who work for companies like DoorDash, Instacart and GrubHub.
