latest legs A multi-pronged worker classification battle began Monday in Suffolk Superior Court with Attorney General Andrea Campbell's lawsuit against ride-hailing giants Uber and Lyft.
Mr. Campbell is continuing a lawsuit started by the current governor. Maura Healey argues that ride-hailing companies are misclassifying drivers as independent contractors rather than employees, bypassing worker protections and costing states significant tax revenue.
Uber and Lyft say their app-based labor models are logistically and technologically very different from traditional employment. Tech companies argue that independent contractor status is essential to maintaining the level of flexibility drivers seek.
“While Uber and Lyft characterize their drivers as having an independent relationship with their passengers, the reality of their payment processes does not reflect that,” Assistant Attorney General Douglas Martland said in his opening statement. “Right after the ride, the rider pays the company. They take their share of the ride and set aside the rest to pay the driver. This is how Uber and Lyft's payment processors work. does not change reality; they are simply following procedures established unilaterally by the company.”
Martland said the driver will have about 15 seconds to decide whether to get in the car with limited information and a decision will be made after a non-jury trial, Suffolk County Superior Court Judge Peter Krupp said. told the judge. Martland said they often have no idea how much the rides they're offering cost. “What kind of entrepreneur would do that?”
Lawyers for Uber and Lyft took exception to their status as transportation companies, arguing that the companies neither own vehicles nor set driver shifts. Michelle Marriott, an attorney for Uber, argued that a closer comparison would be to think of Uber as a coordination and logistics service similar to that of a travel agency.
“But travel agents are not transportation providers,” Marriott told the judge. “Travel agents are intermediaries between those seeking services and those who have services to offer.”
She and Lyft's attorney, Felicia Ellsworth, said the court's investigation should be fully completed before delving into Massachusetts' heavily protected “ABC test” mechanism for determining whether a worker is considered an independent contractor. He claimed that. They said both companies provide marketplace services to drivers rather than paying them to drive. The real employees, they argued, were the company's engineers.
“Drivers don't serve Uber,” Marriott said. “Actually, it's the opposite. Uber serves customers on both sides of the platform.” At Lyft, Ellsworth said, “in every car, he always has two customers: the driver and the rider.” said.
If the court decides to go with the three-pronged ABC test, lawyers for the tech companies said the nature of their business would meet the independent contractor requirement. Gig work is different from her first job as a waitress, Ellsworth said. Because she was not an independent hostess walking around looking for work elsewhere, she said, she was completely under the direct control of her employer and she set her own hours and shifts. I couldn't do that.
Martland promised the state's lawsuit would “lift the lid” on Uber and Lyft's business models, calling the first of dozens of witnesses on Monday to discuss incentives, pricing systems and “these He promised to begin to understand “the purposes that drive companies' algorithmic engines.” ”
Massachusetts is embroiled in this classification dispute through legal battles, voting efforts, and legislative clarification efforts. Uber and Lyft are joining a Big Tech-backed coalition pushing an expensive, high-stakes voting campaign to resolve independent contractors versus employees at the polls in November.
Supreme Court justices last week backed labor's five potential ballot initiatives at varying levels of detail to classify app-based drivers as independent contractors and guarantee them certain benefits. The appeal was considered.
The justices have indicated they will allow the ballot measure to proceed, which could be the final verdict on the state of the still relatively new app-based gig economy.
But as long as Krupp decides before people head to the polls, the high court's decision could serve as a powerful political bludgeon no matter which side wins. The judge said he expected the multi-week trial to take a total of just over 96 hours.
If the court sides with Campbell, opponents of the ballot measure will have a shot in the arm, arguing that tech companies are trying to buy a new, more friendly set of laws for their preferred business models. could be added. If Uber and Lyft come out on top, it could give strong traction to arguments that the ballot measure only clarifies the classification and benefits of app-based drivers.
Political elbows are already being thrown.
State Comptroller Diana DiZoglio's office released a report last week on the hypothetical costs of misclassifying ride-hailing drivers, but a spokesperson for the industry-backed ballot question campaign said the report ” It said it was “deeply flawed” and drawn from an overtly partisan data set.
Sen. Lydia Edwards is pushing for a bill that would clearly define app-based workers as employees, and the audit report says there is a “lack of opportunity” to reach a settlement or legislative compromise based on industry influence. “It's a piece of the puzzle.”
The Board of Audit considered two scenarios. Either the companies correctly consider the drivers to be independent contractors, in which case the state has no obligation, or the drivers should be treated as employees, and the workers collectively owe about $266 million. Either it is taken away from the state. Compensation, unemployment insurance, paid family and medical leave payments for the past 10 years.
A New York state enforcement suit alleging wage theft due to misclassification of Uber and Lyft drivers resulted in a $328 million settlement earlier this year. The settlement also includes a set of specific benefits promised by Uber and Lyft to drivers, including a set of benefits promised by tech companies to drivers under Massachusetts' voting system. is approximated by a broader wording.
In arguments before the SJC last week, the Attorney General's Office argued that although a ballot measure that would establish specific rights and procedures for app-based workers to form a union was proposed by 32BJ SEIU and the International Association of Machinists. , pointed out that it was not universally supported by labor organizations. – The results of technology-enabled classification measures and the current enforcement court action brought by the Attorney General may coexist.
Lawyers for Uber and Lyft issued a now-familiar warning Monday that the companies could pack up and go home if courts, Congress and voters condemn their gig-work business models.
Ellsworth said about 45% of drivers use the Uber and Lyft platforms at the same time, and their business model relies on large numbers of drivers driving less than 10 hours a week.
“The government believes that a ruling in its favor would create tens of thousands of new jobs in Massachusetts,” she said. “If we were an employer, she would be the third-largest company in the state. But the reality is that an adverse ruling doesn't translate into tens of thousands of new jobs. There will be one less company.”
