Massachusetts Priced an Hour of Rideshare Driving at $34.48. Then Drivers Unionized.

For four years, Massachusetts and two ride-hailing companies argued over a single legal question: were Uber and Lyft drivers employees, entitled to minimum wage and benefits, or independent contractors entitled to neither.▸ On June 27, 2024, the Attorney General's Office settled the case without resolving that question — the companies keep classifying drivers as contractors — but extracted a $175 million payment and a permanent wage floor in exchange. Twenty-three months later, drivers used the leverage that settlement gave them to do something no rideshare workforce in the country had done before: unionize.

The lawsuit, filed in Suffolk Superior Court in July 2020, alleged Uber and Lyft violated the Commonwealth's wage and hour laws by treating drivers as contractors while controlling their pay, routes and deactivations like an employer would.▸ The companies settled rather than litigate the classification question to a verdict: Uber paid $148 million, Lyft paid $27 million, for a combined $175 million fund, of which the Attorney General's office says "at least" $140 million goes to back pay for drivers who used the apps in Massachusetts between July 14, 2020 and July 2, 2024. Settlement administrator Rust Consulting began mailing notices to an estimated 70,800 eligible drivers on August 1, 2025, with checks following that fall — restitution sized so that drivers who earned the least after expenses like gas receive the largest payments.

The settlement's more durable term wasn't the check — it was the pay standard going forward.▸ Starting August 15, 2024, Uber and Lyft were required to guarantee drivers at least $32.50 for every hour of "engaged time," the stretch between accepting a trip and dropping the rider off. "Starting today, Uber and Lyft must pay their drivers at least $32.50 per hour," Attorney General Andrea Joy Campbell said that day. "While their ads try to take credit for doing this, let's be clear: they're paying because they have to, not because they want to." The rate escalates every January 15 by 3% or the rate of inflation, whichever the formula calls for — it rose to roughly $33.48 in January 2025, drivers told the Boston Globe, and stands at $34.48 as of January 15, 2026, per the Attorney General's own settlement FAQ, last updated that same date.

Not every driver has felt the raise.▸ Some veterans told the Globe their total earnings fell after the standard took effect, pointing to thinner surge pricing and an influx of new drivers — including some from outside Massachusetts — drawn by the guaranteed floor. The settlement's other terms took effect alongside the pay standard regardless: one hour of paid sick leave for every 30 hours worked (capped at 40 hours a year), a stipend toward the state's paid family and medical leave program, a pooled health-insurance stipend for anyone driving more than 15 hours a week for either company, and occupational accident insurance covering up to $1 million per work-related injury.

The wage floor didn't come from Beacon Hill alone.▸ In November 2024, Massachusetts voters separately approved Question 3, a ballot measure creating a path for rideshare drivers — who remain independent contractors under both state and federal law — to unionize and bargain sectorally with Uber and Lyft, something no other contractor workforce in the country has a legal right to do. Eighteen months later, that path produced a result: on May 23, 2026, the Massachusetts Department of Labor Relations certified the App Drivers Union, backed by 32BJ SEIU and the International Association of Machinists, to represent roughly 70,000 of the state's rideshare drivers — the first certified rideshare union in U.S. history. The union's next task is negotiating a sector-wide contract with Uber and Lyft over wages, benefits and deactivation rules — starting from a floor the Attorney General's office already put in writing. Separately, the state's Department of Public Utilities counted 103,588 approved rideshare drivers statewide as of March 11, 2026, and its own 2024 Rideshare Data Report put total rides that year at 90.9 million, up 15.4% from 78.7 million in 2023 — the scale of the workforce the new union and wage floor now both apply to.

Dollar figures are nominal, not inflation-adjusted; the wage-floor escalation step for January 2025 is reported secondhand, as noted above, because no standalone Attorney General notice for that date was found.