Lyft has already contributed $14.4 million to a potential November ballot issue in Massachusetts that would make its drivers contractors rather than workers, with the great majority of those cash coming from a single $13 million investment, the state’s largest by a long shot. It’s a clear first shot in what will almost certainly be a long and arduous battle, one that Lyft and its gig-work competitors successfully tested in California two years ago.
According to the Boston Globe, Lyft has funded the lion’s share of the $17.2 million war chest put up by the Flexibility and Benefits for Massachusetts Drivers organization to bankroll the next ballot proposal. The rest comes from Maplebear, the owner of Uber, DoorDash, and Instacart. The previous record for the largest single donation was about a third the size, set by General Motors in 2020 with a $5.1 million commitment.
Currently, the Attorney General of Massachusetts has filed a lawsuit against Lyft and Uber, alleging that the businesses have been misclassifying their driver workforce as contractors. Contractor status relieves individuals of many of the fees and liabilities that come with being an employee, such as minimum wage, health insurance, and overtime pay, but true contractors often have complete freedom over how and when they work, as well as how much they charge for their services. In numerous of the jurisdictions and countries where these businesses operate, the question of whether or not ridershare drivers have that kind of autonomy has become a subject of legal debate.
So far, California has been the most vocal in its protection of gig workers as employees, first through a state Supreme Court judgement in 2018 and then through AB5, a measure that was passed and (however briefly) established these types of drivers as employees. It went into effect on January 1, 2020, but was reversed by Proposition 22 in November of that year. Uber, Lyft, DoorDash, Instacart, and Postmates spent a record $224 million on the initiative, outspending their opponents, who were mostly labor organizations, by more than 10-to-1, making it California’s most expensive ballot item ever.
Despite the fact that Prop 22 was ultimately declared unconstitutional, the technique has proven to be beneficial for gig work companies thus far. Legislative improvements have been stalled in court, and Lyft and Uber drivers in the United States do not yet have access to the same benefits as full-time employees.
Gig firms essentially used two lines of attack to make their case for Prop 22. The first, directed at its own employees, was a clumsy attempt to link “flexibility” to contractor status, a completely false distinction maintained by the firms themselves. The second goal was to persuade California voters that the costs of operating a fleet of employee drivers would force them to reduce service or raise rates.
Despite the fact that Prop 22 passed, every single firm that supported it raised prices. Uber’s CEO recently said on a conference call with investors that, in the face of impending European Union employee-status laws, the company can afford to “make any model work” financially. Lyft has been contacted to see if it is in a similar situation.
Given this well-publicized bait-and-switch, it appears unlikely that the Flexibility and Benefits for Massachusetts Drivers committee will be able to make the same case about consumer costs. Nonetheless, the $17.2 million already raised has paid for a slew of big-name political consultancies that were behind what is currently the most expensive (and soon to be the second-most expensive) ballot measure in Massachusetts history, which sought to stymie a right to repair law, according to the Boston Globe.