The gig economy vs workers 

As with Proposition 22 in California in 2020, Uber and other companies will probably spend lavishly to convince voters that these measures would benefit the affected workers and the public alike. 

If Massachusetts voters endorse the ballot initiatives in November, these firms would have the freedom to rob workers of basic employment rights and benefits, including minimum wages, overtime pay, workers’ compensation, and unemployment insurance.

It would also give gig employers a major – and manifestly unfair – competitive advantage over rivals and drive down labour-market standards. Instead of encouraging this exploitative business model, state and federal policymakers should force these companies to comply with the laws. 

Gig companies have misclassified their main workforce from the beginning, openly violating the law or exploiting its ambiguities.

Uber and Lyft, for example, have insisted to regulators and the public that their drivers are independent contractors and thus not entitled to the rights and protections of employees, including the freedom to organise.

These companies retain the control of an employer – Uber tells its drivers who to pick up and what routes to take, and sets their fares – while renouncing the responsibilities and costs of being one. 

The ballot initiative process could lift the legal cloud hanging over gig corporations – at least in Massachusetts, where they appear to be in violation of pro-worker employment laws.

In 2020, then-Attorney General Maura Healey (who is now the state’s governor) sued Uber and Lyft, alleging that they misclassified drivers as independent contractors and illegally denied them the minimum wage and overtime pay. Proceedings in the case have just began. 

Codifying the classification of gig companies’ drivers, shoppers, and delivery people as independent contractors would cause substantial harm. For starters, gig workers would be formally stripped of employment rights.

Despite being misclassified, they can currently pursue legal recourse under Massachusetts law for nonpayment of the state’s $15 (Shs57,000) minimum hourly wage. Moreover, gig workers would not be entitled to unemployment insurance if they lost their job, or compensation if injured or attacked while on the clock. 

These are not merely theoretical harms. Many, if not most, Uber and Lyft drivers make less than the applicable minimum wage after factoring in the costs of their vehicle, gas, and insurance. Many gig workers lost their livelihood during the Covid-19 pandemic. Cab and delivery drivers are frequently attacked or injured on the job. 

What gig companies are seeking in Massachusetts and elsewhere is a permanent competitive advantage over rivals that must comply with the state’s employment laws. Firms that misclassify workers as independent contractors, and thus shirk their responsibilities as employers, save an estimated 20-40 percent on labour costs. 

Lastly, if successful, the proposed ballot initiatives would unleash a race to the bottom. Over time, gig companies would capture even more market share through their harmful labour practices, and employ more workers who lack fundamental protections. Their rivals would face the choice of complying with the law and potentially going out of business, or engaging in practices such as wage theft to remain competitive. 

Adebajo is a professor and a research fellow at the University of Pretoria