Massachusetts has reached an inflection point in a protracted dispute that sparked years of legal battles and proposed ballot initiatives: whether rideshare and delivery app drivers should be classified as independent contractors or as traditional employees.
This new settlement, brokered between rideshare companies and Attorney General Andrea Campbell, is a pragmatic approach to a complex issue that balances increased pay and benefits, and preserves driver’s independent contractor status.
While the legal status of rideshare drivers finally appears to be resolved, a new threat is looming with labor groups promoting an unnecessary ballot measure, known as Question 3. The measure seeks to establish collective bargaining rights for these drivers. This effort risks undermining the very flexibility of drivers it purports to help.
The drivers are classified as independent contractors, which means they are not employees of the rideshare and delivery app companies. This arrangement provides these “gig workers” with the freedom and flexibility to set their own hours and allows them to determine how much they earn. The settlement – a clear win for drivers – boosts their pay and benefits and maintains their independent-contractor status.
It’s this autonomy that many rideshare drivers find so appealing. One recent survey found that 97 percent of drivers value the flexibility of the work and 85 percent of them desire to remain as independent contractors. Drivers tend to view the ability to set their own schedules as equivalent to a pay increase. They also see setting their own terms as a benefit, which is at odds with the rigid nature of traditional collective bargaining frameworks, and with the unions that are persistently trying to reclassify them as employees.
The ballot measure has many stipulations, but the most problematic aspect is that it would allow the labor union to set the terms and conditions related to app-based drivers’ work. In advocating for this measure, labor groups are overlooking – or purposefully ignoring – that drivers choose this work because of its flexibility.
Dictating new “terms and conditions” outside of the settlement between the attorney general and rideshare companies could diminish the freedom that drivers currently enjoy by setting specific hours an employee is allowed to work, or dictating where they can drive. Forcing gig workers into a collective bargaining structure erodes the benefits prized by these independent contractors and would make gig work less attractive.
Is this ballot measure even necessary considering the settlement between the state and rideshare companies? Under the settlement, rideshare drivers will receive $32.50 per hour when actively driving, the ability to earn sick leave, a stipend to buy into the state’s paid family and medical leave program, as well as health and occupational accident insurance.
The agreement also allows drivers to get detailed rate information on trips they accept, requires pay transparency, mandates companies provide in-app chat support in four languages, provides reasons for driver deactivation and offers an appeals process to challenge the decision. Rideshare companies also are prohibited from discriminating or retaliating against app-based drivers.
Not only have rideshare companies been tremendous assets to drivers, they have also conferred benefits onto consumers and taxpayers. Riders benefit from the ease at which one can secure a ride from one destination to another with just a tap of a button on their smartphone. Massachusetts and its cities obtain around $503 million in annual tax revenue from ridesharing.
Ride-sharing also provides enormous public safety gains with a reduction in DUIs by 47 percent in Boston, 53 percent in Worcester, and 39 percent in Northampton as well as a reduction in alcohol-related fatalities. This effect has also been seen in many other states after the introduction of ride-sharing.
If labor unions are truly interested in promoting the best interests of rideshare drivers, they should advocate for versatile solutions that increase gig workers’ autonomy rather than trying to mandate heavy-handed and antiquated 20th century employment models. Pursuing anything else could risk undoing the public safety gains of reduced drunken driving and ease of transportation access available to consumers.
Massachusetts has reached a critical stage in its rideshare debate, securing a settlement that elevates driver pay and benefits while preserving their treasured autonomy. Question 3, however, endangers this progress by applying a rigid, outdated framework. Instead of embracing unaccommodating standards, labor unions should promote solutions that preserve drivers’ independent status. The settlement represents a balanced and forward-thinking resolution, and it should be recognized as a preferable outcome over the ballot measure.
Robert Melvin is the senior manager of state government affairs for the northeast region for the R Street Institute, which bills itself as an organization “supporting free markets and limited effective government.
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