$175M Uber, Lyft Driver Settlement Resolves Wage and Hour Lawsuit in Massachusetts

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Uber Technologies, Inc. and Lyft, Inc. have agreed to pay a combined $175 million settlement to resolve a 2020 lawsuit filed by the Office of the Massachusetts Attorney General (AGO) that asserted that drivers are employees under the state’s wage and hour laws and thus entitled to certain wages, benefits and protections.

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The court-authorized website for the Massachusetts Attorney General settlement with Uber and Lyft can be found at UberLyftMASSAGOSettlement.com.

According to a Mass.gov FAQ page about the settlement agreement, Uber will pay $148 million and Lyft will pay $27 million for a combined $175 million settlement fund. The official Uber and Lyft settlement website says that, among other new benefits, at least $140 million of this fund will be distributed in back pay to drivers who used the Uber and Lyft Driver apps to provide rides in Massachusetts between July 2020 and July 2024.

The deal covers certain drivers who completed rides using the Uber or Lyft Driver apps between July 14, 2020 and July 2, 2024 in Massachusetts. The website specifies that only drivers who drove “more than casually” within that period and earned less than minimum wage after accounting for expenses are eligible for a settlement payment.

“Casual drivers who drove (on average) less than 8 miles per week from July 2020-July 2024 may not be eligible for restitution,” the site notes.

Those eligible for an Uber and Lyft settlement payout will receive a personalized notice by mail or email from the settlement administrator, Rust Consulting, the website relays.

According to the site, eligible individuals do not need to do anything to receive an Uber and Lyft driver settlement payment. Checks will be issued to each driver’s address by early fall of this year, the website says.

Drivers who need to update or confirm their mailing address must do so on this page by August 31, 2025. This requires the last four digits of a driver’s Social Security number or employer identification number and a unique access code, which can be found on the settlement notice issued about the deal.

Payment amounts will be determined based on how much an individual drove and a formula set by the Massachusetts AGO, which will ensure that eligible drivers who were paid less than the state’s minimum wage (after expenses) receive more, the Mass.gov FAQ page shares.

“Drivers who on average earned less than $33.48 will get 10 cents per mile, and drivers who on average earned $33.48 or more will get 6 cents per mile in restitution,” the site says.

On top of providing settlement payments, the deal establishes a minimum “earnings floor” of $33.48 per hour, adjusted annually for inflation, for time spent traveling to pick up passengers and transporting them to their destination, Mass.gov reports. This will “[ensure] for the first time that the tens of thousands of Uber and Lyft drivers in Massachusetts will be guaranteed minimum pay,” the website states.

In addition, Mass.gov says the agreement requires that drivers receive guaranteed paid sick leave, an automatic stipend to cover the cost of buying into the state’s paid family and medical leave program, access to a pooled health insurance benefit and occupational accident insurance for up to $1 million in coverage for work-related injuries.

The settlement website points out that eligible Uber and Lyft drivers will not have to pay taxes on any payout they receive from the deal.

As part of the deal, Uber and Lyft must also give drivers data about the length of a trip, the destination and the expected earnings before they accept a ride, and provide detailed pay information once a trip has been completed. Additionally, the companies must offer in-app chat support with a live representative in English, Spanish, Portuguese and French, the website relays.

Moreover, the settlement agreement—which resolves the Massachusetts AGO’s lawsuit against Uber and Lyft—establishes certain requirements with respect to addressing complaints or deactivating a driver and bars the companies from discriminatory or retaliatory practices, Mass.gov adds.

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