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Gig Companies Are Bringing the Disastrous Prop 22 to a State Near You

The gig companies, fresh from their Prop 22 victory in California, are seeking to repeat their success in Massachusetts, pushing a ballot measure that would strip app-based drivers of existing labor protections like the minimum wage.

Gig companies are expected to spend big in Massachusetts — possibly double the amount for any other bill in the state's history — to undercut gig worker pay and rights. (Craig F. Walker / The Boston Globe via Getty Images)

So-called gig companies rely on one big innovation: breaking the law — or, to put it more politely, labor arbitrage. Rather than taking on the expenses (the minimum wage, for example) and risk (overtime, liability for injuries and accidents on the job) that come with employing people, they declare them independent contractors, shifting responsibility onto the drivers who make a living carrying out the companies’ core functions. Uber and Lyft, which nonetheless still do not turn a profit, enter new areas floating on a cloud of venture capital and plow that money into enticing people into using their services. Public transit is underfunded, and these companies offer a private-sector alternative. Prices are kept low — at first — with VC money subsidizing the operation, allowing the service, and its model of worker exploitation, to become a part of daily life.

As workers and regulators begin fighting back against such predatory practices, the tech executives have gone on the offensive, seeking to rewrite the laws to fit their model. Such was Proposition 22, the ballot measure written by the likes of Uber, Lyft, DoorDash, and Instacart that exempted them from following existing labor law in their largest market, California. The Prop 22 campaign cost the companies $220 million, a drop in the bucket given how their shares skyrocketed following its success, but enough to beat the forces of the working class — most notably, the roughly $20 million spent by unions to combat the assault.

Following their success in California, the companies loudly proclaimed their intent to wage similar campaigns in other states. As DoorDash CEO Tony Xu said, “Now, we’re looking ahead and across the country, ready to champion new benefits structures that are portable, proportional and flexible.” Lyft, for its part, called the law “a groundbreaking step toward the creation of a ‘third way’ that recognizes independent workers in the U.S.”

The siege recently hit a wall in their campaign to export their so-called third category of employment in New York, but now, less than a year after the California vote, the companies are making good on their promise. This time, they’ve introduced a ballot measure in Massachusetts. The measure was officially filed by Massachusetts Coalition for Independent Work, an organization registered under the names of Uber and Lyft executives (its director is Alix Anfang, a senior communications and policy manager at Uber).

The measure follows the Prop 22 model. It proposes to enshrine ride-hail and delivery-app drivers’ status as contractors rather than employees in state law, excluding them from minimum-wage and overtime laws, as well protection against discrimination and injury, among other important hard-won standards. In return, it promises health care stipends and a minimum wage, but only for time spent driving, not the significant amount of time spent in between tasks or rides. In California, a UC Berkeley study found the minimum offered in exchange for permanent exclusion from actual minimum-wage and overtime laws works out to a paltry $5.64. As for the promised health care plan, it is a pittance, should a driver even hit the high hourly hurdle required to qualify.

An earlier attempt to begin carving out gig drivers from standard labor laws met backlash in Massachusetts in March of this year, with drivers opposing a bill introduced in the state house that would introduce limited “portable benefits,” a financial account of sorts, but which workers argue would exclude them from labor rights by further enshrining their miscategorization. That bill, now known as H1234, was referred to the Joint Committee on Financial Services.

Never the sort to give up in the face of opposition, capital is once again on the offensive. The new ballot measure, filed on August 3, is its latest attempt to introduce Prop 22 in other states.

The Coalition to Protect Workers’ Rights, which includes labor and civil rights groups, has already launched a “No Prop 22 MA” campaign. As Beth Griffith, an Uber driver and spokesperson for the coalition, told Vice, “The ballot language from Uber and Lyft is a $100 million ploy to avoid paying taxes, avoid paying workers fairly, and allow Big Tech companies to buy their way out of the basic obligations of every other business. Drivers and delivery workers, most of us black, brown and immigrants, are tired of being treated like ‘second class’ workers by these multibillion-dollar tech companies.”

Should the coalition’s estimate that these companies are ready to spend $100 million on their campaign to bar workers from exercising their rights prove accurate, that would make it more than double the record for the most expensive ballot measure in Massachusetts history.

It isn’t only workers who may pose an obstacle to the proposed measure. Massachusetts’ attorney general is currently suing the companies for intentionally misclassifying workers to exclude them from state labor laws. It remains to be seen whether the Biden administration will act on a federal level. Such action could go either way: Joe Biden has appointed former union attorneys to the National Labor Relations Board (NLRB) and David Weil, a longtime gig-company critic, to head the Department of Labor’s Wage and Hour Division, but it also has extensive ties to Silicon Valley.

Marty Walsh, Biden’s labor secretary, is Boston’s former mayor and a lifelong unionist, giving him more than a little interest in what transpires with the proposed measure. Walsh has previously said that “in a lot of cases, gig workers should be reclassified as employees” (not to read the tea leaves too much, but when Reuters first published the interview in which Walsh said this, they reported that he had said “in most cases,” only to quickly remove that word from the transcript).

Should the Massachusetts ballot measure pass a legal review and garner sufficient signatures, it will be on the November 2022 midterm ballot. Organized labor, correctly, has largely opposed compromising with tech companies seeking to enshrine their anti-worker models into law, but there are cracks in that resistance. In New York, there were labor leaders willing to negotiate behind closed doors with tech executives in crafting potential legislation. Such a mentality, borne of desperation, can only strengthen the industry’s hand. A unified opposition is the only force that has any hope of defeating this proposed measure, and the many more which are to come.