Report Finds Driver Reclassification Would Result in Loss of up to 87% of App-Based Jobs

CONTACT: Conor Yunits, 857-276-8479, cyunits@solomonmccown.com

BOSTON, MA – March 4, 2022 – A study from Beacon Economics found that reclassifying Massachusetts rideshare and delivery drivers as employees would likely result in the loss of at least 58% of these jobs in the Commonwealth, and could result in the loss of up to 87% of all rideshare and delivery jobs in the state. 

Drivers are currently classified as independent contractors in Massachusetts, meaning they can drive when, where, and for how long they want. If they were forced to convert to  full-time employees, there would likely be profound impacts on how drivers currently use services and the number of app-based jobs available to drivers.

Multiple scenarios were considered with respect to how companies might handle scheduling under reclassification, how cost increases might be allocated, and how much consumer demand might change in the face of price increases. Even in the scenario with the least amount of lost driver jobs, a minimum of 58% off app-based jobs would be lost under reclassification.

“I can honestly say, I would no longer continue driving passengers in my community if I’m reclassified as an employee,” said Luis Ramos, who drives with Lyft in Milford, MA. “The flexibility of this work is why I joined in the first place and why I’m still driving more than four years later.”

The study concluded that: 

  • “Under an employment model, drivers would likely be required to work set hours each week and there would be a cost associated with hiring drivers as employees.” 
  • “These costs would, in all probability, translate to higher costs for consumers.” 
  • “Fewer hours of service would be demanded by consumers and these hours would be divided among fewer drivers working longer hours,” and
  • “The move away from an independent contractor model for app-based driving is likely to disproportionately hurt workers who are unable to work set schedules, removing an important earnings opportunity for many.”

This final point could have devastating consequences for the large majority of workers who drive with app-based platforms part time. According to the Pew Research Center’s December 2021 report, more than two-thirds of gig workers consider this their “side job.” Additionally, in Massachusetts, nearly nine in ten Lyft drivers “say that Lyft and other app-based work allows them to earn money while pursuing other endeavors, such as starting a new business, pursuing education, or interviewing for full-time jobs.”

The Flexibility & Benefits for Massachusetts Drivers committee is working to establish a new law that secures rideshare and delivery earning opportunities for residents statewide who value flexibility, and that provides access to company-paid benefits such as healthcare stipends, paid sick time, and family & medical leave.