By Nate Raymond
BOSTON (Reuters) – The top Massachusetts court on Monday is set to consider whether the state’s voters will get to decide two ballot proposals in November that would redefine the relationship between app-based companies like Uber Technologies and Lyft and their drivers – one backed by industry and the other by labor.
The Massachusetts Supreme Judicial Court first will hear arguments in a labor-backed challenge to a ballot proposal by an industry-supported group that would ask voters to declare that the drivers for the companies are not employees but rather independent contractors entitled to some new benefits.
The court then will hear a challenge by a conservative think tank to a proposed ballot measure supported by the Service Employees International Union’s Local 32BJ that would ask voters to allow Uber and Lyft drivers to unionize.
Using contractors can cost companies as much as 30% less than using employees, according to various studies. A ballot victory for the companies in a state with some of the most employee-friendly laws could embolden them to pursue similar measures in other states, according to labor activists.
Uber and Lyft, along with app-based delivery services Instacart and DoorDash, have spent millions of dollars to support the ballot proposal that would cement the status of their drivers as contractors under state law.
The proposal by Flexibility and Benefits for Massachusetts Drivers, a ballot measure committee whose contributors include the four companies, also would establish an earnings floor equal to 120% of the state’s minimum wage for app-based drivers, or $18 an hour in 2023 before tips.
Drivers would receive healthcare stipends, occupational accident insurance and paid sick time under the proposal.
The same court in 2022 blocked a similar industry-backed ballot measure, finding that it contained an unrelated proposal that ran afoul of a state constitutional requirement that ballot questions be limited to related subjects.
To hedge its bets, Flexibility and Benefits for Massachusetts Drivers is gathering signatures for five different versions of the current ballot question, only one of which would be put before voters on Nov. 5.
Uber and Lyft also are preparing to face a May 13 trial in a civil lawsuit filed in 2020 by the state. The state’s Democratic attorney general, Andrea Joy Campbell, is asking a judge to conclude that the two companies have been unlawfully classifying their drivers as contractors, not employees.
Should Uber and Lyft lose that trial and fail to win over voters at the ballot box, the companies have said they could be forced to cease operations in Massachusetts due to the economics.
If the industry-backed ballot measure passes but the state wins in the trial, Campbell’s office has said the new law would control for the future but that Uber and Lyft could be subject to penalties for the past misclassification of their drivers.
(Reporting by Nate Raymond in Boston, Editing by Will Dunham and Alexia Garamfalvi)
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