Lyft reached a major agreement with the Massachusetts Attorney General’s Office to protect driver independence and grant new driver benefits.
Last year, over 35,000 drivers in Massachusetts relied on flexible work through the Lyft platform. Drivers in the Commonwealth choose rideshare to support their small business, earn extra money while living as a family caretaker, or supplement their income as teachers or MBTA bus drivers. Today’s agreement gives these drivers the benefits they want, while maintaining the independence that brings them to the Lyft platform in the first place.
Drivers were at the heart of this agreement, with 91% of Massachusetts drivers on the Lyft app supporting a similar proposal where they remain independent contractors, maintain the flexibility they currently enjoy, and gain some, but not all, of the benefits that an employee would receive.
Under the terms of the agreement:
All Massachusetts app-based rideshare drivers will have a minimum earnings standard of $32.50 per hour for engaged time (from the time they accept a ride through when they complete it), adjusted over time for inflation.
All drivers will also be eligible to receive, among other things, paid sick leave, paid family and medical leave, occupational accident insurance coverage, and a first-in-the-nation portable healthcare fund.
Lyft has agreed to pay $27M, most of which will go into a driver fund to be distributed by the Massachusetts Attorney General’s Office.
This agreement resolves a lawsuit that recently went to trial, and avoids the need for a ballot initiative campaign on this issue in November. 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 — we’re excited to help keep drivers earning and Massachusetts moving.
“This is a huge win for Massachusetts drivers that secures their freedom to earn when, where, and however long they want. On any given day, flexible work on the Lyft platform provides an average 8,500 drivers in Massachusetts the independence to earn while attending school, caring for loved ones, chasing dreams, or providing for their family. Rideshare is truly part of the economic and social fabric of the Commonwealth. We’re thrilled to reach an agreement that works for everyone, and builds on similar progress we’ve made in states like New York, California, Minnesota, and Washington,” said Jeremy Bird, Lyft Executive Vice President of Driver Experience.
Financial Disclosure:
Lyft accrued $19.1M for this matter in Q1’24, and the remaining $7.9M will be expensed in Q2’24. This settlement will have no material impact on Lyft’s expectations for 2024. We expect to make a full payment of $27 million by Q1 of 2025.
Forward-Looking Statements:
Certain statements contained in this announcement are “forward-looking statements” about Lyft within the meaning of the securities laws, including statements about our operations, strategies, markets, and business, including our operations in Massachusetts and financial outlook. Such statements, which are not of historical fact, involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in Lyft’s filings with the Securities and Exchange Commission. Lyft disclaims any obligation to update any forward-looking statements to reflect future events, except as required by applicable law.