Ride-hail ‘employee’ debate arrives
» On the heels of California’s vote to classify rideshare drivers as independent contractors, not employees, the worker classification debate has switched coasts.
Massachusetts is poised to take up the issue, which asks whether drivers for companies like Uber, Lyft and DoorDash, should be classified as employees or remain independent contractors.
At the debate’s core is the benefit of the flexibility and independence that makes working in a gig economy attractive, and the demand for better pay, benefits and protections.
The classification debate first surfaced in California, where the decision ultimately fell to voters. In November 2020, California voters passed Proposition 22, a controversial ballot initiative that classified app-based drivers as independent contractors, not employees.
In Massachusetts, the debate is set to launch at the Statehouse, where recently filed bills tackling worker classification await committee assignments.
One such bill, “An Act Establishing a Rideshare Driver Bill of Rights” (SD.2359), is co-sponsored by Henry De Groot, executive director of the Boston Independent Drivers Guild.
Formed in recent years, BIDG represents a collection of Uber and Lyft drivers advocating for unionization, improved pay and better protections.
According to De Groot, SD.2359 does not specifically address the worker classification
issue, but does include provisions like collective bargaining rights, coverage of work-related expenses, paid sick leave, overtime equal to regular Massachusetts employees, and protection from “arbitrary” termination.
BIDG considers SD.2359 an alternative to another recently filed bill, “An Act establishing portable benefit accounts for app-based drivers” (HD.2582).
HD.2582 designates drivers as independent contractors and would create portable benefit accounts to help cover income replacement and health and wellness, among others.
According to De Groot, HD.2582 does not offer drivers enough pay or protections.
“Our ride-share driver bill of rights is us taking the fight to Uber,” De Groot said. “We believe that if we can frame the debate directly on the question of ‘Do drivers deserve raises (and) basic worker rights?,’ legislators and voters and community groups will agree with us.”
De Groot hopes that such messaging will help combat whatever resources opponents bring to the debate.
Campaign funds for the “Yes on Proposition 22” initiative in California totaled around $200 million between Uber, Lyft, DoorDash, Instacart and Postmates, as was widely reported.
Several of those companies are also members of a newly formed coalition, The Massachusetts Coalition for Independent Work.
Aiming to “advocate for increased benefits and protections for gig economy workers while ensuring they maintain the flexibility they overwhelmingly value,” the coalition’s membership includes Lyft, Uber, Postmates, TechNet, Instacart, Elevate Boston Foundation, Mass High Tech Council and other local groups.
In a press release, the coalition announced it would “advocate for increased benefits and protections for gig economy workers while ensuring they maintain the flexibility they overwhelmingly value.”
Not all drivers want employee status.
Lowell resident Anthony William is one such driver who prefers the status of independent contractor. For William, who was working two jobs before becoming an Uber Black driver seven years ago, the flexibility of Uber is essential.
“It’s something that’s afforded me the opportunity to work on my own time but also be around more often than not,” William said. “I’m often in control of how much I make as well.”
William said he averages about 40 to 48 hours of driving a week.
There have been some rough patches, COVID-19 included, and the introduction of lower-cost options and driver saturation has not helped.
“I’ve had to switch my approach a lot during these seven years,” William said. “Good strategy, I feel, trumps those shortcomings that you find in this industry because I can’t see transportation dying.”
According to a 2019 state data report on ridesharing in Massachusetts, rides through transportation network companies, or TNC, have been increasing since 2017. In 2019, there were about 91.1 million TNC rides — a 12% increase over 2018 and a 40.6% increase over 2017.
Understanding both sides of the classification issue, William has seen several drivers leave because they couldn’t bring in enough money.
In recent years, Uber has begun to introduce some additional benefits to drivers, which William considers a step in the right direction.
Currently, he is taking advantage of Uber’s tiered points system to go to school. According to William, Uber gives out points to drivers based on the volume of rides. Drivers who accumulate a certain amount of points are eligible for perks like money for school.
As far as other benefits, William said he’d like Uber to contribute to 401Ks and offer stock options to drivers.
William worries that employee classification would eliminate the autonomy that drivers currently enjoy. It is a common concern among drivers, but De Groot says it is the product of Uber and Lyft propaganda.
It’s Uber and Lyft who plan to take away driver flexibility if they are forced to comply with the law,” De Groot said.
While some, like De Groot, see the issue making its way to Massachusetts voters like it did in California, other players are concentrating their focus on the legislative process.
“We are confident that, unlike California, Massachusetts leaders will work together to ensure that drivers are able to gain new protections and benefits while keeping the flexibility they overwhelmingly want,” Uber spokesperson Alix Anfang said in a written statement.
As debate picks up in the Statehouse, the issue will also play out in the courtroom.
In July 2020, Massachusetts Attorney General Maura Healy filed a lawsuit seeking a determination that Uber and Lyft drivers are indeed employees under Massachusetts Wage and Hour laws.
“Uber and Lyft have built their billion-dollar businesses while denying their drivers basic employee protections and benefits for years,” Healey said in a press release last July announcing the lawsuit. “This business model is unfair and exploitative. We are seeking this determination from the court because these drivers have a right to be treated fairly.”