Uber CEO Dara Khosrowshahi expressed his support Wednesday for a ballot initiative in Massachusetts that would keep gig economy workers classified as independent contractors, fulfilling a promise he made nearly a year ago to push for laws that preserve its business model.
“In the state of Massachusetts, we think the right answer is our IC+ model, which is independent contractor with benefits,” Khosrowshahi said during the earnings call with investors. “Our drivers love it. Prop 22 has proven to be incredibly popular with California drivers.”
His comments come a day after a coalition of app-based ride-hailing and on-demand delivery companies, which includes Uber, Doordash, Lyft and Instacart, filed a petition for the ballot initiative that would classify app-based ride-hail and delivery workers as independent contractors and provide them with benefits such as healthcare stipends for drivers who work at least 15 hours per week. The coalition claimed that the provision would allow drivers to earn about $18 per hour in 2023 before tips. The ballot measure, if it passes legal muster and receives enough signatures, would be included in the November 2022 election.
Proposition 22, a ballot measure that kept gig workers in the state classified as independent contractors. passed in California in November last year. It also exempts gig companies like Uber from AB-5, the bill that entitles gig workers to self-classify as employees with usual labor protections that don’t apply to independent contractors, like minimum wage, sick leave, unemployment and workers’ compensation benefits.
Gig companies, which largely have yet to become profitable, spent $205 million in marketing for this ballot measure and made no secret about plans to do the same thing in other states. Which brings us back to Massachusetts.
Khosrowshahi said during the earnings call that the vast majority of drivers prefer the IC+ model over full-time employment. The Coalition to Protect Workers’ Rights disagreed, arguing that the ballot language has loopholes that would create a subminimum wage for app-based workers and that few would qualify for the healthcare support promised. It also noted that the measure would remove anti-discrimination protections, eliminates workers’ compensation rules and allows companies to cheat the state unemployment system of hundreds of millions.
“Uber has been using independence as a red herring for years,” Shona Clarkson, organizer for Gig Workers Rising, told TechCrunch. “We know that drivers do not actually have independence while driving for Uber. There is no independence in working 70+ hours a week, not being able to set your own rates, not being able to see where a ride is going and having no real control at work. The benefits promised under Prop 22 were a sham that have not materialized. As a network of over 10,000 gig workers in the state of California, we have not seen Uber drivers able to access any meaningful benefits since the implementation of Prop 22.”
Khosrowshahi said Californians voted in favor of Prop 22 because they had driver support, and he sees no reason why Massachusetts should be any different.
“We absolutely prefer a legislative outcome in Massachusetts, but if we can’t get there we’ll take it to the vote and based on what happened in California, we’re quite confident,” he said.