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Axios Boston
Massachusetts audit says state could be leaving $266M on table with rideshares
By Steph Solis,
2024-05-01
If rideshare drivers were classified as employees, the companies behind them would have owed Massachusetts on average $266 million in state benefits from the past decade, per a state auditor's report.
Why it matters: A Superior Court judge and a ballot measure later this year could determine whether drivers for Uber, Lyft, DoorDash and similar companies should be classified as full-fledged employees, who are entitled to certain benefits, or as contractors.
State of play: The report estimates how much rideshare and other companies could owe in payments for workers' compensation, unemployment insurance and paid family and medical leave.
In the current scenario, rideshare companies don't owe any money to cover state benefits because their drivers are considered independent contractors.
Yes, but: The estimates range widely because the Department of Public Utilities did not share data on the number of drivers and how much they earned, saying it wasn't a public record.
Auditor Diana DiZoglio's office relied on data from the RMV about rideshare-specific inspections and the Drivers Demand Justice Coalition, an advocacy group that supports classifying drivers as employees.
The estimates range from $89.1 million, assuming all drivers worked just five hours weekly, to $713.5 million, assuming all drivers worked 40 hours weekly.
Zoom out: Uber and a subsidiary paid $100 million to New Jersey's unemployment trust fund after a 2022 ruling found its drivers were misclassified as independent contractors.
New York's attorney general reached settlements with Uber and Lyft last year totaling $328 million over driver access to state benefits.
What they're saying: Teamsters general president Sean O'Brien, who believes the drivers should be treated as employees with access to benefits, said the report shows "the true cost of employee misclassification."
"We encourage other states to conduct similar audits to find out the extent of Big Tech's fleecing of the American public."
The other side: A spokesperson for a group representing the rideshare companies, which have repeatedly said drivers rely on the flexibility of being a contractor, called the auditor's hypothetical estimates "wildly flawed."
Conor Yunits, a spokesperson for Flexibility and Benefits for Massachusetts Drivers, noted the data comes from an advocacy group whose supporters have endorsed DiZoglio in the past.
He said the audit left out a rideshare-backed report estimating that rideshare and delivery platforms boosted economic activity in Massachusetts by $8.3 billion a year.
"A reputable, professional auditor would consider all the relevant datasets before reaching conclusions," he said in a statement, "rather than beginning with a predetermined, politically motivated conclusion first and building out an analysis to achieve it."
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