- Uber and Lyft back up a proposal that would classify drivers as contractors in Massachusetts.
- A USC-Berkeley study says loopholes can result in drivers earning as little as $ 4.82 an hour.
- The group behind the proposal says it would guarantee drivers “at least 120% of the minimum wage.”
A proposal from Massachusetts put forward by gig-economy companies, including Uber, Lyft and DoorDash, could result in drivers and riders taking home only a quarter of the hourly wage, says a study by UC-Berkeley.
The election proposal would count drivers and riders as contracted instead of employees, and could be shown at the vote in November 2022.
The proposal states that it will guarantee that workers for rideshare companies earn at least 120% of the minimum wage, which the researchers said would work at $ 18 per hour – the minimum wage in Massachusetts is expected to rise to $ 15 per hour by 2023, from $ 13.50 pr. hour at the moment.
But by analyzing data from Uber and Lyft, the researchers said five loopholes in the proposal would cut workers’ wages.
They estimated that drivers and riders working a typical 15-hour work week would earn only $ 4.82 per hour. Hour after cost, while those working a 40-hour work week would earn $ 6.74 per hour. It did not analyze the consequences for DoorDash drivers.
The group behind the proposal, the Massachusetts Coalition for Independent Work, said the research was based on “questionable statistics.”
In the study, researchers said one reason why earnings would be so much lower than the minimum wage is that companies would only guarantee wages for “committed time.” This is the time drivers and riders spend traveling to work and transporting passengers or deliveries.
“Uber’s own data indicate that extended time accounts for only 67% of drivers’ actual working hours. Companies would not pay for about 33% of the time drivers wait between passengers or return from trips to outlying areas,” the study said.
The researchers also said that reimbursement from Uber and Lyft would not cover drivers’ operating costs, that a health scholarship written into the proposal would only benefit a minority of drivers, and that as contractors, drivers and riders would have to pay both employer and employee shares of payroll taxes.
Drivers are guaranteed at least 26 cents per mile for vehicle and gas maintenance under the proposal, and companies will have to pay some health care to some drivers.
The Massachusetts Independent Labor Coalition, which is behind the proposal, said on its website that the proposal “explicitly states that drivers would earn at least 120% of the minimum wage plus salary to cover mileage and vehicle expenses,” plus tips “, making this a higher earnings floor than offered in countless other industries. “
Opponents of the Massachusetts referendum question, which would protect the driver’s independence and flexibility while creating historic new benefits, have continued to push for false and misleading information on the voting issue that not only contradicts the facts but does not stand up to scrutiny compared to the success of Prop 22 in California, “the statement said.
California’s proposal 22, similar to the Massachusetts proposal, was passed in November 2020. Drivers with rideshare told The Guardian in February 2021 that they had seen a drop in wages after it passed. A California judge ruled that Proposition 22 was unconstitutional in August.
The researchers said in their study that Uber and Lyft “have repeatedly refused to publish their own data.”
“For a complete analysis, the state needs much more data from companies, including detailed figures on waiting times, working hours and earnings, especially for the regular part-time and full-time drivers who drive most of the driving,” they said.
Uber, Lyft and DoorDash did not immediately respond when Insider contacted them for comment.