The State Auditor released a report that shows for the first time a conservative estimate of the impact of Uber and Lyft on the Commonwealth’s social programs sparking a strong response from Senator Edwards and Labor Leaders across Massachusetts.
The report entitled Assessing Transportation Network Companies’ Financial Obligations to Massachusetts Programs available at Assessing TNCs’ Financial Obligations to Massachusetts Programs Mass.gov, covers the last ten years of the companies’ operation in Massachusetts. The information uncovered in this report shows just how much the global giants have deprived Massachusetts of contributions to programs that are paid by every other business that operates in the Commonwealth.
Highlights from the State Auditor’s Report:
• In the past ten years TNC’s have cheated the state social programs of over $266.4 Million.
• Of that $266 Million Uber and Lyft neglected to pay
• $105.1 Million in Workers Compensation
• $124.9 Million in Unemployment Insurance
• And in the past 5 years $36.2 Million in Paid Family & Medical Leave
• In 2023 the companies made $1.4 Billion dollars and paid nothing into the state social programs
• A Drivers Demand Justice Coalition report cited the average Massachusetts TNC driver had a mean gross hourly pay of $25.11 and driving expenses of $12.29 per hour in 2023, resulting in an hourly net pay of $12.82; almost $3.00 less than the current Massachusetts minimum wage.
This report comes at a crucial moment in the fight for workers’ rights, especially in the new and unregulated gig economy. Ultimately, it is the first and only report so far that breaks down the actual losses and impact of Uber/Lyft’s misclassification of their workers in Massachusetts.
“The numbers are undeniable and paint a stark picture of the scale of financial manipulation by companies such as Uber and Lyft,” said Senator Edwards.
“The conservative estimates in the auditor’s report gives real insight into the ever-expanding gig economy and its reliance on taxpayers to subsidize its exploitative business model. These staggering numbers from
Transportation Network Companies are only a fraction of the bag they’re leaving everyone else to hold, not to mention the costs to MassHealth and other social safety nets that taxpayers and businesses who play by the rules pay into. The Auditor’s report does not even include Delivery Network Companies, which make up an ever-increasing percentage of app based work, because our current laws fail to regulate companies like DoorDash and Instacart. This report exposes the fact that the only flexibility Uber and Lyft are actually pursuing is flexibility for themselves to avoid abiding by employment standards and skirting paying their fair share in public contributions.” Chrissy Lynch, President, Massachusetts AFL CIO.
“These greedy corporations can easily afford to do right by their employees, but instead try to game the system at the expense of not only their workforce, but Massachusetts taxpayers as well,” said Tom Mari, President of Teamsters Local 25 and Secretary-Treasurer of Joint Council 10. “This report shows that Uber and Lyft are getting away with highway robbery and it’s time they followed the law and provided their workers full employment protections Senator Edwards is the lead senate sponsor of the comprehensive legislation, an Act Establishing Protecting and Accountability for TNC and DNC Workers Consumers and Communities (S.627/H1158).
This legislation guarantees employee status and access to unemployment, workers compensation and paid family medical leave for the drivers. Benefits that the report calculates were not paid into by Uber and Lyft in 2023 that amount to over $47M. Not only are the workers victims of the monster corporations’ greed, but the entire Commonwealth suffers from their failure to contribute financially. In addition to requiring Uber, Lyft, Doordash and Instacart to treat their drivers as employees and contribute to the social programs, the S.627 would also protect consumers from price gouging and assure safety for drivers and passengers by requiring a panic button in the cars.
This legislation also provides a pathway to unionization which allows the drivers to have a collective voice.
Endorsements of this legislation have been received from the AFL-CIO Executive Board, Progressive Massachusetts, IUE-CWA Local 201, UFCW, Mass Drivers United, UAW, Massachusetts Building Trades, the Massachusetts Nurses Association and the Teamsters among several organizations.
“Gig companies have been ripping off drivers and the state of Massachusetts for years. S.627 is the only bill at the state house that allows drivers flexibility and independence, gives drivers the full rights of all other workers in Massachusetts, has a pathway to a union, and protects against gigification of more industries. There is only one bill that pays MA taxpayers back the millions of dollars a year they are paying in corporate welfare to Gig companies.” Adam Kaszynski, President IUE-CWA Local 201.
Currently, the fight concerning misclassification involves a pending lawsuit from the Attorney General, three bills, and five ballot questions, six if you count the unionization question.
“This report is the missing puzzle piece,” said Edwards. “I don’t know how we can come to a settlement or legislative compromise without knowing how much money we have been shorted.” She continued, “We stand at a critical juncture where we can either continue to allow companies to exploit their workers or we can ensure a fair, equitable work environment for all,” Edwards urged.