Uber, Lyft said to mis­clas­sify work­ers to boost prof­its

Sentinel & Enterprise - - MASSACHUSE­TTS - By Chris Lisin­ski

Mas­sachusetts will be­come the se­cond state ever to pur­sue le­gal ac­tion against ride-hail­ing giants Uber and Lyft over their clas­si­fi­ca­tion of work­ers, a sys­tem that At­tor­ney Gen­eral Maura Healey ar­gues leaves al­most 200,000 driv­ers without ac­cess to key em­ploy­ment ben­e­fits.

Healey filed a law­suit in Suf­folk Su­pe­rior Court against the two com­pa­nies on Tues­day al­leg­ing that, by cat­e­go­riz­ing their driv­ers as in­de­pen­dent con­trac­tors rather than em­ploy­ees, Uber and Lyft are vi­o­lat­ing the state’s wage and hour laws.

The nearly 200,000 driv­ers in Mas­sachusetts, the ma­jor­ity of which the com­pa­nies say work part-time hours, do not have ac­cess to a guar­an­teed min­i­mum wage, guar­an­teed paid sick leave, work­ers’ com­pen­sa­tion or tra­di­tional un­em­ploy­ment in­sur­ance that they would gain if they were deemed to be em­ploy­ees, Healey said.

By im­prop­erly cat­e­go­riz­ing their fleets, she ar­gued, Uber and Lyft are able to pocket “hun­dreds of mil­lions” of dol­lars ev­ery year that they should be pay­ing in ben­e­fits and into state sys­tems. “The bot­tom line is that Uber and Lyft have got­ten a free ride for far too long,” Healey said dur­ing a Tues­day vir­tual press con­fer­ence.

Her law­suit ac­cel­er­ates a grow­ing na­tional fight over both the ride-hail­ing ser­vices them­selves and an econ­omy that is grow­ing more re­liant on “gig work­ers,” who of­ten have more flex­i­bil­ity but lack many of the pro­tec­tions that come with full em­ploy­ment.

Both com­pa­nies re­sponded to Healey’s law­suit Tues­day by ar­gu­ing that it would con­trib­ute to wide­spread COVID-era eco­nomic strain by ef­fec­tively forc­ing them to trim down their work­forces.

“This law­suit threat­ens to elim­i­nate work for more than 50,000 peo­ple in Mas­sachusetts at the worst pos­si­ble time,” Lyft spokesper­son CJ Mack­lin said in a state­ment. “Driv­ers don’t want this — 89% of Mas­sachusetts Lyft driv­ers drive fewer than 20 hours per week and choose to drive rideshare pre­cisely be­cause of the in­de­pen­dence it gives them to make money in their spare time. Across the coun­try, driv­ers have said they want to re­main in­de­pen­dent con­trac­tors over em­ploy­ment by a 4 to 1 mar­gin.”

The two com­pa­nies also ar­gued that most Mas­sachusetts driv­ers work part­time and that, ac­cord­ing to sur­veys, most would pre­fer to re­main in­de­pen­dent con­trac­tors be­cause of the sched­ul­ing flex­i­bil­ity it of­fers com­pared to tra­di­tional em­ploy­ment.

“At a time when Mas­sachusetts’ econ­omy is in cri­sis with a record 16% un­em­ploy­ment rate, we need to make it eas­ier, not harder, for peo­ple to quickly start earn­ing an in­come,” Uber spokesman Alix An­fang said in a state­ment. “We will con­test this ac­tion in court, as it flies in the face of what the vast ma­jor­ity of driv­ers want: to work in­de­pen­dently. We stand ready to work with the state to mod­ern­ize our laws, so that in­de­pen­dent work­ers re­ceive new pro­tec­tions while main­tain­ing the flex­i­bil­ity they pre­fer.”

In May, Cal­i­for­nia At­tor­ney Gen­eral Xavier Be­cerra also sued the com­pa­nies on sim­i­lar grounds. That case was largely prompted by pas­sage of a new state em­ploy­ment law of­ten re­ferred to as AB5.

A sim­i­lar law has ex­isted in its cur­rent form in Mas­sachusetts since 2004 where work­ers are as­sumed to be em­ploy­ees un­less com­pa­nies pass a three-pronged test to prove they are in­de­pen­dent con­trac­tors: work­ers must be free from the em­ployer’s di­rec­tion and con­trol, per­form ser­vices out­side the usual course of busi­ness, and en­gage in an in­de­pen­dent trade or oc­cu­pa­tion for the ser­vice they of­fer.

Matt stone / Boston her­ald

an uber nd lyft driver picks up p ssen­ger in front of south st tion on l st novem­ber in Boston.

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