By Sam Drysdale
BU News Service
After retiring from a long career in construction, John Pereira wanted to enjoy the benefits of retirement without too much financial stress. He took to driving passengers using the rideshare app Lyft, a job he says gives him the flexibility of a retired lifestyle while helping to pay the bills.
“I am my own boss,” the New Bedford native said. “When I feel like going, I go.”
Uber and Lyft, the two largest rideshare companies in the U.S., currently classify their drivers as independent contractors, rather than as employees. This distinction allows workers to create their own hours but doesn’t guarantee them minimum wage, overtime, earned sick time and other benefits.
In July, Attorney General Maura Healey sued the two companies to classify their drivers as employees.
The ongoing lawsuit, filed in Suffolk Superior Court, declares that drivers are misclassified under the 2004 Massachusetts Wage and Hour Law. The law is intended to protect workers of the gig economy, a free market system where companies hire short-term independent workers.
Under this legislation Uber and Lyft drivers should already have employee status but the two companies have been incorrectly labeling them for over a decade, the attorney general argues.
The law states that individuals performing services for another party are considered employees. There are exceptions under which an individual can be classified as an independent contractor instead, if their work satisfies any part of the three-pronged test for classification.
A worker can be considered an independent contractor if; they are “free from control and direction” from the company; the service they provide can be performed outside of their business with the employer in question – in this case Uber and Lyft; and the worker is “customarily engaged in an independently established trade, occupation, profession or business of the same nature.”
If a company doesn’t classify its workers as employees, the labor statute is intended to require the organization to prove that their independent contractors satisfy each prong of the three-part test.
Uber and Lyft drivers do not qualify for independent worker status under this law, said Henry De Groot, executive director of the Boston Independent Drivers Guild, a Massachusetts-based rideshare drivers lobbying group.
“You could look at prong three, it says you have to be independently established in a business or trade,” he said. “It’s not like I was doing passenger transport being a chauffeur before I started driving for Uber and Lyft. They’re the ones who set me up. I wasn’t independently established.”
De Groot, who has driven for both Uber and Lyft for over a year, said he feels confident that drivers fail to meet all three prongs of the test and therefore both companies should be classifying their workers as employees.
The attorney general’s complaint states that because the drivers are integral to the company achieving its stated purpose as a transportation service, they require reclassification under the law.
Rideshare companies provided a steadily increasing number of rides in Massachusetts over the past three years. According to a report by the Department of Public Utilities, there were a total of 91.1 million rideshare app rides in the state last year, which is up 12% from 2018 and up 40.6% from 2017.
In addition to overall growth in the state, Uber and Lyft became more popular forms of transportation outside Greater Boston, Worcester and Springfield. There was a high percentage of growth in the southeastern and western parts of the Bay State.
Where in years past most rides began and terminated in large cities, rideshare has become a part of the transportation landscape in towns as small as Dunstable and Shirley.
Rideshare workers made national headlines in November when the issue of their employment status became part of a ballot measure in California. Proposition 22, or the App-Based Drivers as Contractors and Labor Policies Initiative, exempts companies such as Uber and Lyft from classifying their workers as employees under a new gig economy law in the state.
Gig companies spent more than $200 million on the campaign and the proposition passed with 59% of the vote.
Though Prop 22 barred drivers in California from employment status, it also enacted new labor and wage policies that require rideshare companies to provide certain benefits to their workers. The law, which will go into effect mid-December, includes an earnings minimum, a health insurance stipend and pay for costs if a driver gets hurt on the job.
Chris Gerace, a New York-based rideshare worker and content creator for The Rideshare Guy, an online forum by and for app-based drivers that is read by over 150,000 drivers every month, said he thinks Prop 22 is a step in the right direction for the future of the gig economy.
Gerace has been working as an Uber and Lyft driver for five and four years, respectively. In his job as an executive producer for the site, he said most drivers he encounters want to keep their status as independent contractors.
The Rideshare Guy sent a survey to readers in September about Prop 22. Out of 609 respondents, 67% of drivers were for Prop 22, 27% were against, and 7% were undecided. In California specifically, 69% of drivers who responded favored Prop 22, meaning they wanted to remain as independent contractors with the added benefits the new law would provide.
“The vast majority of drivers say they want to remain as is, at least maybe throwing in a few concessions like what Prop 22 did,” he said.
For advocates in Massachusetts, Prop 22 represented an example of the struggle happening in the commonwealth.
Drivers such as Pereira enjoy the current Lyft model, which he says allows him the flexibility to work the hours he chooses. He said he fears the shift to an employee status would make it harder to continue with Lyft and maintain the lifestyle he hoped for in retirement.
“I work for rent. When I open my GPS I have to go where I go, but when I shut it off that means I’m on my own time,” he said. “The way I work right now is fine.”
Uber says drivers enjoy the flexibility of the job.
“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,” Alix Anfang, an Uber spokesperson said in a statement.
If required to reclassify their drivers, it would be up to Uber and Lyft to create a system to protect that flexibility, Gerace said. He said he is mainly concerned about the elimination of “multi-apping” as an option for drivers in an employee model.
“Multi-apping” is a method that drivers currently use to increase earnings by working for more than one platform at a time.
If Massachusetts were to reclassify independent contractors, “It would be very unlikely for any company to say, ‘Oh yeah, you can go on and work at the same time for our direct competitor,’” he said.
Gerace said he hasn’t seen Uber and Lyft release any information about what an employee model would look like, but speculated drivers would likely have to sign up for scheduled shifts.
In the current system, drivers don’t always earn minimum wage as they aren’t compensated for time spent between rides, according to the attorney general’s office, and expenses such as car maintenance and gas fall on the workers. The reclassification would guarantee more pay, as well as provide benefits such as overtime, paid sick leave and health care.
Rideshare drivers’ wages are calculated by an algorithm that combines distance and duration of a ride, the region where the ride starts and other factors that often fluctuate.
Gerace said drivers need to know their area and the time they will get the most business to maximize their profits in the current system.
He said he supports Uber and Lyft enacting a floor minimum or compensating drivers for the time they spend on the app as ways to increase pay.
As Uber and Lyft have been steadily lowering their rates over the past few years, drivers’ compensation has been affected, De Groot said.
“If you were driving 40 hours a week, three years ago and now you have to drive 60 to 70 hours to make the same amount of money, are you more flexible or less?” he said.
Even as the companies grow, Gerace said he has also to put in more hours now than when he started in order to make the same amount. He said better pay and compensation for car maintenance are a priority for most drivers, but health care is not.
Health insurance may be appealing for some full-time workers, he said, but most drivers who have a second job where they get their coverage don’t see it as an important enough issue to lose flexibility over.
Pereira receives Medicare and said he doesn’t need Lyft to give him insurance since he already has coverage.
De Groot, on the other hand, said health care was one of the most important issues the Boston Independent Drivers Guild brought to the attorney general’s attention through their advocacy earlier this year.
At the start of the pandemic, the lobbying group advocated for paid sick leave as a “life or death issue.”
“[Drivers] have to choose between staying home without pay, or going out to pay their bills and possibly being positive and exposing others,” De Groot said.
Sen. Michael Moore, D-Worcester, Senate chair of the Legislature’s Committee on Public Safety and Homeland Security, said the pandemic has exemplified the need for secured health care among drivers serving as essential workers.
“If I’m in a vehicle and I’m exposed or exposing the drivers to COVID-19 or something else, or if they get in a motor vehicle accident, you want to make sure that they get the health care coverage so that they can adequately address their needs,” he said. “When they’re operating a vehicle, you want to make sure they’re healthy and capable.”
In March, Uber granted paid sick leave to their workers who contracted COVID-19, or were quarantined by a public health authority; Lyft’s sick pay policy has been inconsistent, leading to lawsuits and confusion amongst drivers.
De Groot said he is confident that on the legal basis of Massachusetts Wage Law, the attorney general’s case against Uber and Lyft will result in reclassification. However, he is concerned about a lengthy lawsuit, he said.
The Boston Independent Drivers Guild is hoping to settle the issue in the Statehouse.
“We’re not waiting to bring our demand to the General Court, to the Statehouse and to the people of Massachusetts,” De Groot said. “If a question posed to Massachusetts state legislators and voters is, ‘Do you want drivers to be taken care of?’ ‘Do you want drivers to have to right to basic pay guarantees, the right to unionize?’ the answer is yes.”
The lobbying group adopted a platform for legislative action, the Rideshare Drivers Bill of Rights, that it is being drafted into a bill with plans to introduce it in January.
“The Rideshare Drivers Bill of Rights is designed to get in front of the issue,” De Groot said. “We’re going on the offensive against them to say, positively, drivers are due these rights under the law and demand the legislators give it to us.”
The executive director said he is hoping to solve this issue in the courts and in the Statehouse, as he feels a ballot question in 2022 would allow Uber and Lyft to “set the debate with their money,” citing the companies’ large donations to Prop 22.
Compromise is possible if drivers, legislators and rideshare companies sit down in a room together, Gerace said.
“Having drivers come to the table and share their thoughts, their opinions and what is going to benefit them most, and then working to create some sort of synergy between these companies, legislators and drivers,” he said. “It’s going to make everybody happy.”
This article was originally published in South Coast Today.