Massachusetts Attorney General Maura Healy on Tuesday jumped on the bandwagon that California Governor Gavin Newsom started by suing rideshare companies Uber and Lyft in her state for the crime of “misclassifying their drivers as independent contractors.” In layman’s terms, Healy is accusing them of skirting their responsibility to abide by state and federal employment regulations like minimum wage and overtime.
“Uber and Lyft have built their billion-dollar businesses while denying their drivers basic employee protections and benefits for years,” said AG Healey.
Tellingly, Healy’s announcement includes statements by three separate labor union advocates, including the Steve Tolman, head of the Massachusetts AFL-CIO. “Uber and Lyft intentionally misclassify their drivers as ‘independent contractors,’ to make it harder for their workforce to organize a union, and to avoid providing basic worker protections,” he said.
So a key motive here is to aid the state’s labor groups by making it easier for them to organize the drivers and thereby get a cut of the companies’ profits. Those funds will come in the form of dues automatically deducted from the drivers’ earnings. When all is said and done, the drivers could end up taking home even less.
Healy scoffs at the companies’ claim that most drivers like the flexibility and freedom that comes with being a contractor instead of an employee. Never mind that even in her own complaint, she concedes “most drivers provide such services on a part-time basis.” The drivers could easily move to full-time if they wanted just by taking more rides
She argues that the companies “control” their drivers because they “offer financial incentives to induce drivers to work shifts that directly benefit the companies.” Yes, Uber and Lyft increase the rates they offer when they need more drivers. Somehow, to Healy, this is evidence of the companies’ sinister nature.
The attorney general is on stronger ground, however, in arguing that the companies don’t pay enough and the process for determining pay rates is mystifyingly complex. Those were the two complaints that I heard repeatedly from drivers when I was reporting on the companies for the Washington Examiner. Few of the drivers I spoke with wanted unions—they generally wanted as few people as possible telling you what they can and cannot do, thank you very much. Rate structure changes that reduced their take-home pay, on the other hand, had them livid. If that situation persists, it is possible that more drivers will turn to unions out of frustration, if nothing else.
Uber and Lyft have been hurt financially because of the COVID-19 outbreak, but they should nevertheless strongly consider raising the rates for their drivers and making the formulas more straightforward. It’s the old Henry Ford approach: Treat your workers well and they won’t see the need for a union.