New York Rideshare Settlements Have Massachusetts Angle

Uber Exec Sees Possible Template For Policy, Pay Consensus In Mass.

NOV. 2, 2023…..A trio of settlements struck Thursday between rideshare companies and state officials in New York could provide a template for action by the Massachusetts Legislature to keep a potential industry-backed ballot question from going to voters next year, a top Uber executive said.

Uber and Lyft reached settlements with New York Attorney General Letitia James to resolve wage theft allegations and Uber agreed to a separate settlement with New York State Department of Labor to address past and future unemployment insurance liability. Thousands of rideshare drivers in New York will gain access to benefits like a pay floor, paid sick leave and unemployment benefits. The drivers will still be considered independent contractors, which is crucial for Uber.

“Now hopefully the next state that is going to be able to do that is Massachusetts. Look at New York, why can’t drivers in Boston and Massachusetts have those same protections?” Josh Gold, senior director of public policy and communications at Uber, said.

James announced two settlements totaling $328 million with Uber and Lyft, resolving multi-year investigations that found the companies withheld pay from drivers and prevented them from obtaining benefits available under that state’s labor laws.

In addition to providing $328 million in back pay to drivers, the settlements institute a minimum driver “earnings floor,” make drivers eligible to earn and use paid sick leave, require the companies to provide proper hiring and earnings notices, and give drivers the ability to appeal their deactivation from either platform. Outside of New York City, where rideshare drivers already receive minimum pay under regulations passed in 2019, drivers will soon earn a minimum of $26 per hour from dispatch to completion of the ride.

And under a settlement that Uber agreed to with the New York State Department of Labor, Uber will begin making quarterly payments into the New York State Unemployment Insurance Trust Fund and make a retroactive payment for what the company would have owed since 2013.

“The reason I think this is applicable for Massachusetts is because this is exactly what a lot of us have been talking to the Legislature [about] … exactly the type of forward thinking we want to work with the state Legislature on,” Gold said.

The terms of the settlements are similar to the provisions of a possible 2024 ballot question. The industry-backed Flexibility and Benefits for Massachusetts Drivers committee is pursuing a ballot question that would define app-based drivers as independent contractors — how the companies currently classify drivers — under state law while extending them some new benefits, like an earnings floor 20 percent higher than minimum wage.

Ballot question committees that collect the requisite 74,574 signatures by later this month will be presented to the Legislature in January. Lawmakers can approve them, propose a substitute or decline to take action. Any proposed ballot question that the Legislature does not act on by May 1 moves on to the next round of signature-gathering and is on track for the November ballot.

Gold said that a key to the settlement agreements in New York was a willingness on both sides to move beyond the debate over employment status — employee or independent contractor — and an agreed-upon definition of “working time” that makes clear that a rideshare driver is “working” and earning their new benefits from the moment they accept a trip to the moment the passenger gets out at the destination, and not merely when the driver has the rideshare app open.

The New York settlements also share similarities with a bill (H 1848) filed by Braintree Rep. Mark Cusack. That bill would similarly extend drivers an earnings floor, paid sick time, and more.

Gold said Cusack’s bill could be “a good baseline” for legislative action and also mentioned a bill (H 1916) that Rep. Jay Livingstone filed to consider the application of unemployment insurance and paid family medical leave to rideshare drivers in Massachusetts.

“I think from our perspective, once there’s a recognition that drivers want to maintain that flexibility, once we’re talking about working time being once you accept a trip to when you drop a customer off, then I think what’s important to drivers happens to be earnings standards and some other protections, but maybe in Massachusetts there are other protections and benefits the Legislature thinks is important and we welcome that conversation,” he said.

Legislative action to avoid the Uber- and Lyft-backed ballot question would not necessarily eliminate the possibility of another rideshare driver-related ballot question next year. Workers for Uber and Lyft who want the right to unionize, and the organized labor leaders who support them announced Thursday they have collected well more than the 74,574 signatures needed to advance their proposal to the next phase of the process.

Gold said he thinks that it is “in everyone’s best interest to try to get to a legislative compromise.”

But even with legislative action, Uber and Lyft are facing a lawsuit that now-Gov. Maura Healey filed against them in July 2020 alleging that the practice of classifying drivers as contractors instead of employees violates the state’s wage and hour laws and serves to boost company profits.

The slow-moving case is expected to go to trial starting May 13, 2024, Cindy Mark, the chief of the attorney general’s office’s Public Protection and Advocacy Bureau, told lawmakers last month. And Attorney General Andrea Campbell sounded intent on bringing the suit to trial when she testified against Cusack’s bill earlier this month.

“If companies like Uber and Lyft were properly classifying their drivers as employees, they would not need the so-called benefits provided by this bill, which of course are minimal and far less than the current law provides and demands,” Campbell said. “That is why I’m committed to the office’s current litigation brought against Uber and Lyft for misclassifying drivers as independent contractors.”

Asked about the implication of the New York settlements on the lawsuit that Campbell is pursuing, Gold said the message for policymakers generally is that “there is a willingness from the companies to try to figure out a solution that works for drivers, that takes into account what their concerns are while maintaining that flexibility.”