Parradee Kietsirikul
Uber Technologies (NYSE:UBER) and Lyft (NASDAQ:LYFT) traded lower on Wednesday after the labor-backed Drivers Demand Justice coalition filed the final batch of voter signatures needed to place its unionization push on the November ballot for Massachusetts voters.
A vote in Massachusetts on ride-hailing worker unionization would be the first of its kind in the U.S.
The Drivers Demand Justice coalition is expected to actively campaign on the issue for the four months ahead of the election. April Verritt, president of the Service Employees International Union, said the tens of thousands of Uber and Lyft drivers working in Massachusetts deserve the collective bargaining benefits of unions. “This would be the first in the nation to establish a union for drivers in this way,” she said. Notably, the group is also working on a similar effort in California. Presumably, other states could also follow.
Companies such as Uber (UBER), Lyft (LYFT), DoorDash (NASDAQ:DASH), and Instacart (NASDAQ:CART) have been pushing for years to define their drivers as independent contractors instead of employees. However, a $175 million settlement in Massachusetts to resolve a multi-year lawsuit regarding the classification status of Uber (UBER) and Lyft (LYFT) ended the momentum. That agreement will see Uber (UBER) and Lyft (LYFT) agree to raise their minimum pay to $32.50 per hour and offer what was described as a suite of benefits and protections for drivers. In addition, the agreement will require Uber (UBER) to pay the state $148 million and Lyft (LYFT) to pay the state $27 million. Those funds will be used for restitution payments to current and former drivers.