END OF THE ROAD: Blue-State Ballot Measure May Doom Uber, Lyft

The ride-sharing industry works because it provides two crucial things: on-demand rides for customers, and flexible employment for drivers.

Unfortunately, a ballot measure just approved by Massachusetts voters may mean the end of the road for this successful operation—at least as we know it—because it will take away drivers’ independence and turn union leaders and government officials into backseat drivers.

The newly approved ballot measure “provide(s) transportation network drivers the option to form unions to collectively bargain with transportation network companies regarding wages, benefits, and terms and conditions of work.”

The plain text would appear to give drivers the right to vote in a union election, with the assumption that at least 50% of drivers would have to vote in favor of the union for one to form. But according to the law, no election is necessary to unionize, nor would a majority of drivers have to support it.

Rather, if a driver organization (a union) obtains the signed authorizations of as few as one out of every eight drivers, the state Employment Relations Board can “designate a driver organization as the exclusive bargaining representative for all drivers.”

Thus, 100% of ride-sharing drivers in Massachusetts could be forced into exclusive union representation without a single vote being cast, and with a mere 12.5% of ride-sharing drivers authorizing a particular union to represent them. (Authorization is required by 25% of “active drivers,” who are defined as the top 50% of drivers; thus authorization can come from 12.5% of all drivers.)

The law also provides a pathway whereby a driver organization can petition the Employment Relations Board to hold an election among drivers if a mere 2.5% of drivers (5% of active ones) have authorized it.

So why would this matter?

Consider why ridesharing platforms work so well: They’re built on real-time market demand. They match drivers with riders instantaneously and respond to surges in demand through dynamic pricing that incentivizes more drivers to enter the platform by raising ride prices.

Unions, by contrast, lock workers and employers into minimum three-year contracts. And while drivers can freely enter and exit ride-sharing platforms at any time, unions impose strict schedules that can lead to forced overtime.

Most people desire some flexibility in their work schedule. Others prioritize flexibility over everything else and wouldn’t be able to work at all if they couldn’t control their schedule. According to the Freelancing in America report, more than half of the roughly 64 million Americans who performed independent work in 2023 said that they can’t work for a traditional employer because of their own health condition or their family caregiving needs.

As an economist and working mother, I’ve been fascinated with the concept of flexibility as a previously “immeasurable” component of work and compensation.

And then came an economic analysis of more than 200,000 active Uber drivers that pegged the value of Uber’s fully flexible platform at about 40% of workers earnings, or more than $150 per week for the average Uber driver.

The study compared Uber’s platform to a taxicab structure in which workers must commit to a set schedule on a daily, weekly, or monthly basis. It found that while the average Uber driver works just over 16 hours a week with fully flexible hours, they would work only 2.9 hours if they had to commit to a weekly schedule and wouldn’t work at all if they had to commit to a monthly schedule.

Unions insert rigidity and one-size-fits-all contract rules that negate the value of ride-sharing platforms for drivers and riders. Unions’ cartel-like control over labor would prevent ride-sharing platforms from responding to customers’ needs, likely leaving some people without rides. That could be particularly harmful considering that ridesharing has been shown to reduce alcohol-related traffic accidents and deaths.

And unions’ compensation demands would almost certainly drive up the cost of rides for customers, and their “worker protections” could limit access to ride-sharing in some communities.

Higher prices and limited access could particularly harm low-income individuals and families who don’t own cars. A study of New York City ride-sharing services found that Uber picks up riders in low-income, minority communities at a rate of more than three times that of taxicabs.

That was before the NYC taxicab union and city lawmakers meddled with ride-sharing platforms’ market-based structure, imposing driver limits, minimum wages, and increased fees—all of which backfired for drivers and riders alike.

Instead of eliminating a style of work that appeals to many people and that expands access and affordability of goods and services to others, the focus for expanding good jobs should be on removing government-imposed barriers to their creation.

Like trying to fit a square peg into a round hole, the problem with trying to turn flexible, gig-economy, ride-sharing jobs into structured employment is that some workers simply don’t fit the mold.

Throwing out the jobs of current ride-sharing drivers who don’t fit a union-imposed mold will almost certainly make transportation less accessible and less affordable.

Originally published by msn.com

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