Opinion: MA AGO Settlement With Uber, Lyft Does Not Go Far Enough

Jul 3, 2024 | Labor, Working Mass


The views expressed in this article are the authors’ own and do not represent the official position of Working Mass.

Members of Massachusetts Drivers United write that the recent settlement fails to enforce full employee rights for all app-based workers

By Kelly Cobb-Lemire, Ryan Francis, and Henry De Groot

Last week, the Massachusetts Attorney General’s Office (AGO) announced a settlement with Uber and Lyft in its lawsuit against them. The $175 million settlement includes a Lyft restitution payment of $21.6 million and Uber restitution payment of $148 million which will largely be used for back pay claims and reimbursement for rideshare drivers, as well as a series of improvements in working conditions. Despite these substantial wins, the settlement does not address classification or change existing Massachusetts employment laws for any worker.

Advancements In The Settlement

On the one hand, the terms of the settlement are a massive transfer of wealth from the Big Gig companies to the drivers that actually make their profits possible. The terms include a $32.50/ hour minimum pay guarantee during “active time” and increasing each January at a rate of 3%,  $800 worth of earned sick leave per year, a stipend for healthcare, 0.44% of gross earnings as a stipend for the Paid Family and Medical Leave Act, additional occupational insurance, the formation of a deactivation review process, and app support in additional languages.

All of this amounts to a serious improvement in the working conditions, pay, and benefits for Uber and Lyft drivers. In addition, the companies are required to provide substantial data to the AGO and transparency to drivers. But we should remind ourselves that, except the language on deactivation and language access, everything listed above is simply what was already due to drivers under the law, and what is due all employees in Massachusetts under the law.

Limitations of the Settlement

On the other hand, the AGO’s decision to accept a settlement agreement is a decision by them to not enforce employment law. The entire basis of this case was that drivers were misclassified as independent contractors, and that according to the ABC test they are actually employees. By entering into this settlement agreement, the AGO has chosen not to have the courts rule on this legal question. This is meaningful for three reasons.

First, although the settlement holds Uber and Lyft to most of the provisions of employment law, the letter of the settlement and employment law are not identical. Drivers have no right to overtime, it is not clear whether the $32.50/ hour wage guarantee is equivalent to minimum wage plus mileage reimbursement, and it is on drivers to sign up for coverage under PFML, which will cost an pay an additional 0.44% of gross earnings, meaning that far fewer drivers will have access to the 26 weeks per year available to statutory employees for care of a sick family member, bonding with a newborn, or to deal with personal illness or injury.

Second, the settlement only covers Uber and Lyft rideshare drivers. It does not cover app-based workers engaged in food, package, or grocery deliveries, and it specifically excludes UberEats and Uber Freight drivers. 

Third, the AGOs decision to not enforce the law in full gives credence to Uber and Lyft’s vision of a “third way” classification.

What Comes Next?

The AGO settlement includes a provision that Uber and Lyft will cease participation in any funding or support of the five proposed Big Gig-backed ballot measures as of July 2nd. 

While this does block Uber and Lyft from making further contributions or from using their app to message drivers about these five company initiatives, it does not necessarily mean these initiatives have been defeated. The legal entity backing the initiatives, Flexibility and Benefits For Massachusetts Drivers 2024, is not party to the AGO settlement and is therefore not blocked from continuing its support. Any money Uber and Lyft had previously contributed, or which they contributed between the signing of the settlement and the effective date of July 2nd, is fair game for use by the ballot committee. And Uber and Lyft are not the only backers; Instacart and DoorDash have also contributed substantially to this initiative and are not party to the settlement, so their support can continue.

There is no evidence at this time that these dangerous ballot measures will be withdrawn, and the labor movement should operate on the assumption that they will be on the November ballot until we have evidence to the contrary.

The settlement also opens up new opportunities for driver organizing to make sure it is enforced to the maximum benefit of drivers. We will bring drivers together to make sure that reimbursements are paid out on a fair basis, and that the deactivation review process has meaningful enforcement powers to protect drivers from unfair deactivations.

It is not clear whether there is a path to pursue full enforcement of employment law through the AGO to win overtime, a real minimum wage which covers inactive time, and to win all employment protections for food, grocery, and package delivery app workers. It may be possible to pressure the AGO to pursue legal action which covers all remaining app-based workers not covered under this settlement.

Regardless, we will continue fighting to pass House Bill 1158/ Senate Bill 627, which enshrines full employee rights for all app workers and includes a path to unionization. This important legislation would mandate that all drivers and delivery workers are paid at least the Massachusetts minimum wage for ALL working time, including guaranteeing a percentage of every fare goes to the driver and a minimum pay per ride. This legislation is endorsed by the Massachusetts AFL-CIO and their affiliate unions, the Teamsters, the United Auto Workers, and IUE-CWA. 

And beyond this, Massachusetts Drivers United will continue advocating for full employee status which includes unionization and dignity for all app-based workers in Massachusetts. We say no to the company-funded “union” model backed by some in the labor movement. We believe our union must be of, by, and for app-based workers.

For more information and for comment from Massachusetts Drivers United, please contact Kelly Cobb-Lemire at kjcobb.lemire@gmail.com or 781-635-2103.

Massachusetts Drivers United is an independent organization of rideshare drivers fighting for respect, solidarity, and justice for all app-based workers in Massachusetts. As part of a wider national movement, MDU is fighting to win collective bargaining rights and unionization for drivers.

Kelly Cobb-Lemire is an organizer with Massachusetts Drivers United.

Ryan Francis is an Uber and Lyft driver, and a member of Massachusetts Drivers United

Henry De Groot is an Uber and Lyft driver and a co-founder of Massachusetts Drivers United. He is the managing editor of Working Mass, a member of Boston DSA, and a member of the DSA caucus Reform and Revolution.

Photo Credit: Pablo Cordero