Massachusetts SD 473 Legislative Fact Sheet
Across Massachusetts, rideshare drivers for companies such as Uber and Lyft, provide quick and convenient service to millions of customers each year. The rideshare industry has exploded in the past several years, with over 90 million rides completed in Massachusetts in 2019 – a 12% increase from the year prior and a 40% jump from 20171.
Despite this, state laws governing the workplaces of app based drivers have not kept pace with the rapid growth of the industry.
Rideshare Workers are Among the Least Protected Workforce, both in Massachusetts and Nationally
- While rideshare corporations tout the flexibility their workers have by remaining independent contractors, the independent contractor system ensures that drivers do not have a set minimum wage. That classification also strips them of their power to voice concerns or advocate for pay increases or benefits.
- As independent contractors, rideshare drivers do not have the right, under state law, to paid sick days, overtime pay, unemployment insurance or employment covered by occupational safety and health laws.
- The average hourly compensation for Uber drivers after vehicle expenses and Uber fees are deducted is a mere $11.77 an hour.2 Once Social Security and Medicare taxes are subtracted, that number drops to $10.87 in take-home pay3. This total does not take into account other expenses, such as healthcare, workers compensation, unemployment insurance or retirement, which further diminishes the take home wage of rideshare workers.
- This low rate places Uber drivers’ W-2 equivalent hourly wage in the 10th percentile of all workers in the United States4. It falls significantly short of the mandated minimum wage in 13 of Uber’s 20 largest urban markets, including New York City and the San Francisco Bay Area, both of which have minimum wages of at least $15 per hour5. This rate also falls short of the current Massachusetts minimum wage of $13.506 which is set to reach $15 by 2023.
- As independent contractors, rideshare drivers do not currently have the right to unionize in Massachusetts, nor do they have collective bargaining rights. This leaves drivers without the means to act collectively to improve their wages, benefits or working conditions.
Current Rideshare Company Designed to Funnel Money to the Top
- In 2019, Uber CEO Dara Khosrowshahi earned a staggering total of $42,428,233 7. With an hourly pay rate of $11.77, full time drivers employed by his company earned on average $25,000 a year in gross pay. Khosrowshahi’s pay is nearly 1700 times that of his full time workers. Without the ability to negotiate a contact, or unionize, Massachusetts’ current laws uphold this exorbitant wealth gap between rideshare company executives and those who do the work of shuttling goods and passengers.
SD 473: An Act Establishing Collective Bargaining Rights for TNC Drivers
On February 1, 2021 the Independent Drivers Guild-backed bill, SD 473, was introduced into the Massachusetts State Senate. This legislation, supported by labor unions and rideshare drivers, would establish an industry council for all Transportation Network Company drivers to negotiate for better working conditions and greater pay.
This legislation would encompass all rideshare drivers in the state overseen by the Massachusetts Transportation Network Company (TNC) Division of the Department of Public Utilities. It encompasses Uber and Lyft rideshare drivers, as well as drivers for app-based delivery services such as InstaCart and Doordash.
While lawmakers around the country debate whether to classify rideshare drivers as employees, this bill seeks to give drivers a forum to negotiate for better pay and benefits regardless of their employment classification.
Rideshare drivers in Massachusetts lack basic labor rights. Their current status excludes them from minimum wage and paid sick leave laws. SD 473, seeks to “enable more stable and sustainable working conditions and better ensure that drivers can perform their services in a safe, reliable, stable, cost-effective, and economically viable manner, and thereby promote the welfare of the people who rely on safe and reliable transportation and delivery services to meet their needs.”
The bill’s provisions would allow drivers a forum to negotiate for benefits including but not limited to:
In 2019, the Bureau of Labor Statistics reported that union workers earned roughly $1,095 per week, while nonunion workers earned closer to $892, representing a 19% benefit for those with collective bargaining power8. SD 473 would not change rideshare workers’ classification status as independent contractors. Rather, it would create a process by which to negotiate to raise wages and improve benefits.
This legislation would encompass all rideshare drivers in the state overseen by the Massachusetts Transportation Network Company (TNC) Division of the Department of Public Utilities. It encompasses Uber and Lyft rideshare drivers, as well as drivers for app-based delivery services such as InstaCart and Doordash.
While lawmakers around the country debate whether to classify rideshare drivers as employees, this bill seeks to give drivers a forum to negotiate for better pay and benefits regardless of their employment classification.
Rideshare drivers in Massachusetts lack basic labor rights. Their current status excludes them from minimum wage and paid sick leave laws. SD 473, seeks to “enable more stable and sustainable working conditions and better ensure that drivers can perform their services in a safe, reliable, stable, cost-effective, and economically viable manner, and thereby promote the welfare of the people who rely on safe and reliable transportation and delivery services to meet their needs.”
The bill’s provisions would allow drivers a forum to negotiate for benefits including but not limited to:
- Occupational accident coverage or other insurance coverage for drivers
- Written affirmation of anti-discrimination rights provided to drivers
- Benefits for drivers which may include health, retirement, and other benefits
- Wage regulations that provide a minimum wage not lower than the existing state minimum when wait times and expenses are considered
- Other issues, including minimum work hours, trainings and working conditions
In 2019, the Bureau of Labor Statistics reported that union workers earned roughly $1,095 per week, while nonunion workers earned closer to $892, representing a 19% benefit for those with collective bargaining power8. SD 473 would not change rideshare workers’ classification status as independent contractors. Rather, it would create a process by which to negotiate to raise wages and improve benefits.
1 https://tnc.sites.digital.mass.gov/
2https://www.epi.org/publication/uber-and-the-labor-market-uber-drivers-compensation-wages-and-the-scale-of-uber-and-the-gig-economy/
3 Ibid
4 Ibid
5 https://sfgov.org/olse/minimum-wage-ordinance-mwo
https://www1.nyc.gov/nycbusiness/description/wage-regulations-in-new-york-state
6https://www.mass.gov/info-details/massachusetts-law-about-minimum-wage
7 https://aflcio.org/paywatch/UBER
8https://www.bls.gov/news.release/archives/union2_01222020.htm
2https://www.epi.org/publication/uber-and-the-labor-market-uber-drivers-compensation-wages-and-the-scale-of-uber-and-the-gig-economy/
3 Ibid
4 Ibid
5 https://sfgov.org/olse/minimum-wage-ordinance-mwo
https://www1.nyc.gov/nycbusiness/description/wage-regulations-in-new-york-state
6https://www.mass.gov/info-details/massachusetts-law-about-minimum-wage
7 https://aflcio.org/paywatch/UBER
8https://www.bls.gov/news.release/archives/union2_01222020.htm