Massachusetts Auditor Report Slams Uber, Lyft Worker Misclassification Scheme

State Cheated Out of Hundreds of Millions of Dollars in Benefit Contributions

(BOSTON)- Today, Massachusetts State Auditor Diana DiZoglio released an official report documenting how companies like Uber and Lyft have cheated the state's employee protection programs out of hundreds of millions of dollars by misclassifying workers as independent contractors.

According to conservative estimates, Uber and Lyft have avoided paying more than $266 million into the state's workers' compensation, unemployment insurance, and paid family leave programs over the past 10 years, including an estimated $47 million in 2023 alone.

The report, "Assessing Transportation Network Companies' Financial Obligations to Massachusetts Programs," did not include how much money worker misclassification has cost the state in other programs like food and health care assistance.

"The Massachusetts State Auditor's report exposes the true cost of worker misclassification. Companies like Uber and Lyft are exploiting workers and taxpayers in the name of innovation and convenience,' said Teamsters General President Sean M. O'Brien. "These greedy corporations must be held accountable. Labor legislation must change to ensure employers take full responsibility for their employees and follow the laws just like everyone else. The Teamsters strongly encourage all states to conduct similar audits as Massachusetts. Big Tech is fleecing the American people, and we need the whole of government to take the right position and fight back."

"The report confirms Uber and Lyft are stealing wages from workers and operating as wholesale tax cheats at the same time," said Tom Mari, President of Teamsters Local 25 and Secretary-Treasurer of Joint Council 10. "They are getting away with highway robbery, depriving the Commonwealth of millions in tax revenue, and financing million-dollar campaigns to sidestep our laws. And at the root of this is the lie of worker misclassification. These employers must acknowledge and take care of their employees. Anything else is simply a scam."

State Senator Lydia Edwards (D-Third Suffolk) and State Representative Andy Vargas (D-Third Essex) have introduced two bills backed by the Teamsters, S.627 and H.1158. The proposed legislation would extend collective bargaining rights to workers at app-based companies while strengthening state and federal statutes to protect employees from being misclassified as independent contractors.

"A comprehensive approach based on existing well-tested laws is what makes sense. This report tells us what we already knew that Uber and Lyft aren't playing by the rules, and we are losing hundreds of millions of dollars," said Edwards. "We can't let them change the rules and leave the good people of Massachusetts to pick up the tab."

The Teamsters' endorsement of the Edwards-Vargas legislation comes amid a push by tech giants like Uber, Lyft, and Instacart to force a referendum on the November ballot. If passed, it would validate many app-based companies' unlawful business model, which exploits misclassification to deprive workers of collective bargaining rights, minimum wage protections, overtime eligibility, unemployment insurance, and other benefits reserved for W-2 employees. Founded in 1903, the International Brotherhood of Teamsters represents 1.3 million hardworking people in the U.S., Canada, and Puerto Rico. Visit Teamster.org for more information. Follow us on Twitter @Teamsters and "like" us on Facebook at Facebook.com/teamsters.

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