Gig companies take worker classification fight to Massachusetts through ballot initiative

A coalition of app-based ride-hailing and on-demand delivery companies including Lyft, Uber, Doordash and Instacart have filed a petition for a ballot initiative in Massachusetts that would keep gig economy workers classified as independent contractors as the industry takes a fight it won in California on the road.

The ballot measure proposed by the Massachusetts Coalition for Independent Work comes nearly a year after California voters approved a similar measure known as Proposition 22 that pitted labor rights advocates against gig economy companies in a costly multimillion battle.

Lyft, Uber and other members of the coalition, which also includes several local chambers of commerce in the state, said Tuesday they want the ballot question included in the November 2022 election. The question has to pass a legal review and receive enough signatures from voters for it to be included on the ballot.

“While our priority is to find a legislative solution in Massachusetts, this part of our continued efforts to advocate what the vast majority of drivers want — a flexible earning opportunity that our platform provides plus new benefits,” Lyft co-founder John Zimmer said during Lyft’s earnings call Tuesday. ” While we’re pursuing the ballot option, we’re also closely engaged with the Massachusetts State Legislature and are continuing to work with them on a potential legislative solution.”

The coalition said the proposed ballot question would grant app-based ride-hail and delivery workers new benefits such as healthcare stipends while keeping them classified as independent contractors.

Among the provisions that the coalition touted would be an earnings floor equal to 120% of the Massachusetts minimum wage ($18 per hour in 2023 from app-based platforms, before customer tips) and healthcare stipends for drivers who work at least 15 hours per week. Drivers would still keep all of their tips and be guaranteed at least $0.26 per mile to cover vehicle upkeep and gas, according to the coalition.

Labor activists are already pushing back. The Coalition to Protect Workers’ Rights, a group composed of a variety of organizations including the NAACP New England Area Conference, the Union of Minority Neighborhoods and the Massachusetts Immigrant and Refugee Coalition, said Tuesday the ballot measure contains problematic language that will hurt workers.

The group argued there are extensive loopholes that create a subminimum wage for app-based workers and that few qualify for healthcare. It also noted that the measure would remove anti-discrimination protections, eliminates workers’ compensation rules and allows companies to cheat the state unemployment system of hundreds of millions.

While Uber, Lyft and the broader coalition lobbies for either a ballot measure or legislation, it also faces a lawsuit filed last year by the Massachusetts Attorney General Maura Healey who has asked the court to rule that Uber and Lyft drivers are employees under Massachusetts Wage and Hour Laws.

The AG’s Office alleges in its complaint that Uber and Lyft are unable to meet a three-part test under state law that would allow them to classify drivers as independent contractors. To qualify as an independent contractor the worker must be free from a company’s direction and control, perform services outside the usual course of the business and does similar work on their own.

Uber has been signaling since last year that it planned to push for laws similar to the Proposition 22 measure. Uber CEO Dara Khosrowshahi said in November 2020 during an earnings call with analysts that the company will “more loudly advocate for laws like Prop 22.” He later added that it will be a priority of the company “to work with governments across the U.S. and the world to make this a reality.”

An even bigger battle for gig worker rights is on the horizon