Mass. Auditor: Uber & Lyft cheated state’s employee protection programs out of millions of dollars

BOSTON — Massachusetts State Auditor Diana DiZoglio released an official report that documented how companies like Uber and Lyft have cheated the state’s employee protection programs out of hundreds of millions of dollars by misclassifying their employees as independent contractors.

The report released Tuesday was “Assessing Transportation Network Companies’ Financial Obligations to Massachusetts Programs.

According to conservative estimates in the report, 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 ten years, including an estimated $47 million in 2023 alone.

“The State Auditor’s report shows the true cost of employee misclassification and how these companies exploit workers and taxpayers,’ said Teamsters General President Sean M. O’Brien. “It is long past time that these greedy corporations are held accountable, take responsibility for their employees, and comply with the law like everybody else. We encourage other states to conduct similar audits to find out the extent of Big Tech’s fleecing of the American public.”

State Senator Lydia Edwards (D – Third Suffolk) and State Representative Andy Vargas (D – Third Essex) recently introduced two bills, S.627 and H.1158, that seek to 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 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, the referendum 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.

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