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By: Matt Wolfinger
BOSTON – There’s a loophole in our labor laws spreading across the economy. From delivery drivers to nurses, corporations are classifying workers as independent contractors and using the promise of flexible work to cudgel labor rights.
Nearly 12 million people in the United States, or seven percent of the workforce, describe independent contractor work as their primary source of income, according to the most recent data from the Bureau of Labor Statistics. Independent contractors aren’t protected under the National Labor Relations Act (NLRA), so they can’t unionize, aren’t entitled to benefits, a minimum wage, or overtime and can be fired at will. Companies like Uber, Lyft and Amazon have spent hundreds of millions to keep their workers classified as self-employed independent contractors, allowing them to cut costs and indirectly union-bust.
By blurring the line between employee and contractor, employers save money they’d otherwise be required to spend on unemployment insurance, benefits and employer-paid payroll taxes. Meanwhile, workers lcassified as contractors then pay exorbitantly higher taxation to account for both employee and employer contributions. If corporations can successfully “gigify” their industries, they can circumvent responsibilities and laws that would otherwise prevent them from mistreating their workers.
Uber, Lyft and the Legacy of Gigification
Delivery and rideshare apps like Doordash, Lyft and Uber are poster children for operating in this gray area. Emerging in the shadow of the Great Recession when jobs were hard to come by, companies like Uber, Lyft and the now-defunct Sidecar pioneered the modern understanding of gig work by taking advantage of the dire economic landscape.
In Massachusetts, most workers are considered employees unless a company can prove their work meets three different criteria. According to Massachusetts Attorney General Andrea Joy Campbell’s office, the work must be:
- Done without the direction and control of the employer
- Performed outside the usual course of the employer’s business
- Done by someone who has their own, independent business or trade doing that kind of work
Companies constantly find workarounds. In one landmark case, Massachusetts residents voted in late 2024 to pass a ballot measure affording rideshare drivers the right to unionize. Notably, neither Uber or Lyft spent a cent to oppose it. In contrast, they paid more than $200 million in California to help pass Proposition 22, a bill cementing California gig workers’ misclassification as independent contractors.
The reason why these companies did not perceive Question 3 as a threat became clear in May, when over 70,000 Lyft and Uber in Massachusetts drivers successfully voted to certify their App Drivers Union (ADU).
As the first union of its kind in the country, it’s a big deal—but there’s a catch: The union ceded on classification. Their official stance is that they’ve chosen to remain independent contractors. This limits the union’s ability to advocate for its members, since benefits like healthcare or a minimum wage are off the bargaining table.
As Working Mass’s Editorial Board reported at the time, Question 3 “allowed drivers to vote for a collective bargaining representative, with which Uber and Lyft would then have to negotiate over wages and working conditions… [but only covers] app workers transporting passengers, leaving out take-out and grocery delivery workers.” As a result, “the system as written allows drivers to vote for or against collective bargaining but does not mandate any driver rights within the “union” once it is recognized.”
This has led to credible accusations against the ADU of company unionism. The ADU’s FAQ page on their website states that remaining independent contractors allows members to “keep our flexibility and independence,” since bosses cannot legally dictate when independent contractors work and do not work. The ADU did not respond to requests for comment on how they reached this decision.
The flexibility messaging is reminiscent of a June 2026 report from the Flex Association, a national association for app-based work, that found that nearly two-thirds (63 percent) of the 10,000+ app-based workers they surveyed are doing gig work to supplement W-2 jobs. Flex’s 2024 Economic Impact Report found that “exactly half of driver and delivery partners would rather be able to choose their own hours, than receive a 50% increase in earnings with a fixed schedule.”
While these studies seem to indicate gig workers would largely rather stay as independent contractors and prefer lower pay, there’s two fundamental flaws underpinning their results. First, drivers could advocate for having flexibility to choose their own hours and an increase in pay. There could also be an industry association for app-based work whose members include Uber, Lyft, Instacart, Doordash and Grubhub, Flex is incentivized to only share positive viewpoints on gig work.
In reality, drivers aren’t a monolith—some have become disillusioned with the promises made to them by rideshare companies once the curtain is pulled back and their exploitation becomes indisputable.
In July, a Massachusetts Uber driver filed a class action lawsuit against the company, alleging misclassification of its drivers as independent contractors. Uber uses this misclassification to avoid covering expenses like gas, insurance, and vehicle maintenance, since they were the responsibility of their “self-employed” contractor. It’s argued that the three qualifications in Massachusetts for independent contractor status aren’t met because:
- Uber controls the routes and pay of their drivers while requiring them to meet a set of standards dictated by the company, so the work is not done “without direction or control of the employer.”
- The services provided are not “performed outside the usual course of the employer’s business” (Uber is a company providing transportation to riders, which is fulfilled through the labor of their drivers).
- Drivers do not have “their own, independent business or trade doing that kind of work” as Uber sets pay rates, can change them at their sole discretion and requires a set of standards its drivers and vehicles must meet (and can change those at will).
Food delivery and rideshare companies want to straddle the fence on employment, controlling every aspect of how drivers work through algorithms like employees, while stifling their ability to fully advocate for the same rights and benefits afforded to employees in Massachusetts.
In 2024, More Perfect Union and Rideshare Guy put seven rideshare drivers in a room to see what fares they would be offered for identical trips and found that both Uber and Lyft’s algorithms routinely offered different prices to each driver.
Uber’s average wage gap difference was roughly 12 cents. “You know, to the naked eye, it may not be as much,” driver and Senior Contributor to Rideshare Guy Sergio Avedian told More Perfect Union. However, “A penny’s difference on 2.7 billion trips that Uber does every quarter is the idea.”
The Gig Economy Taking Healthcare
Executives in other industries have observed the chokehold platforms like Uber and Lyft have on their workers once they cannot do their job without it. Taking those lessons to heart, industries like healthcare have spent millions building their own.
When nurses at Brigham and Women’s Hospital (BWH) with Brigham Nurses United (BNU) went on a one-day strike in July, the hospital locked them out for 4 additional days as retaliation, hiring 1,300 scab nurses to fill in for the 4,700 nurses on strike. Many of the scabs came from out-of-state, sourced from Colorado-based US Nursing (USN) who specialize in hiring nurses to scab during ongoing strikes. Similar to Amazon, they’ve begun outsourcing the labor to third-parties.
Their website hosts a portal where nurses can apply to fill shifts at hospitals where “Potential Strikes” loom. The nurses taking over these positions are paid comparable wages than the nurses they’re replacing, but their lack of hands-on knowledge that comes from working full time at a hospital can place patients at an increased risk of harm.
The job listings on “gig nursing” apps like Ingenovis Health’s often don’t list the facility in question, but anyone can make an account—no proof of credentials needed. Select “Strike Jobs” and set the location to Boston, MA to find nearly 300 USN listings, many of them starting October 11, for 2-week strike coverage at a hospital with a bed count of 846 and 59,715 emergency room visits.
According to the American Hospital Directory, BWH has a bed count of 846, and their ED’s About page says they “care for nearly 60,000 patients each year.” The listing has since changed from an “Active Strike” to “Potential Strike” with a date of “TBA” after the MNA announced the strike’s postponement.
93 percent of the 4,000 workers with BNU recently voted in favor of an open-ended, indefinite strike, originally slated to start October 14. The decision came after their historic strike in July had yet to yield results at the bargaining table, with negotiations between the MNA and MGB leadership at a standstill.
The strike has since been postponed pending a vote on what MGB calls its “last, best and final offer,” though the MNA has emphasized that MGB refuses to budge on many key issues or engage in more bargaining sessions.
“Nurses continue seeking improvements on several key issues,” said an MNA spokesperson in a statement, including:
… Limits on MGB’s reliance on temporary nurses to support continuity and quality of care; affordable health insurance with meaningful plan choice; a differential for nurses required to float among units; and a meaningful cost-of-living wage increase.
Another strike is still on table if a contract fails to be ratified, even as MGB planned to once again work with USN to hire scabs for the strike. Since USN pays for each scab’s hotel and travel costs, they’re not classified as independent contractors. However, other gig nursing apps like CareRev have come under fire for allegedly misclassifying users as independent contractors.
These platforms allegedly use a form of dynamic pricing to pay each nurse that looks at a listing an algorithmically generated pay rate, a difference of cents or even dollars apart. It’s unclear how these gig nursing algorithms function, but it’s eerily similar to the ones used by Uber and Lyft. The “gigification” of healthcare has earned gig nursing platforms the name “Uber for Nurses.”
Central to the argument for gig nursing is in response to a so-called “nursing shortage.” But as recent data analysis from Time Magazine revealed, “there are substantively more actively licensed nurses than there are nursing jobs.” Framing the issue as a shortage obscures the real culprit—nurses are refusing to tolerate worsening working conditions.
Dr. Katie Wells, a Senior Fellow at the AI Now Institute researching tech in healthcare, spoke to Working Mass:
When I dug into the history of that, and I looked at all the scholars who had been studying labor markets for nurses, it became very clear that the rise of corporate medicine and the for-profit nature of a lot of hospital systems coincided with the degradation of working conditions for healthcare workers.
Dr. Wells is the co-author of a two-part “Uber for Nursing” study detailing the rise of gig work in the healthcare industry.
Although these platforms can be used to supply facilities with scabs, many are hired to account for lower levels of staffing. These platforms pit nurses against each other in a race to the bottom, where the nurse that wins a shift is the one willing to accept the lowest pay rate. Data the platform collects on nurses, such as credit card debt, helps it identify which nurses are more likely to accept lower pay.
A portion of the travel nurses using these apps are classified as independent contractors. They don’t receive health benefits, despite providing others with healthcare themselves.
These gig nursing platforms have been pushing for legislation that would classify the nurses who use their platforms as independent contractors. They’d be defined as different entities than existing healthcare staffing agencies, as AI Now’s study explains:
“These platforms are trying to convince policymakers that their business model is not that of a healthcare staffing agency, and that they instead should be recognized as a ‘healthcare worker platform’ or a ‘healthcare technology platform.’”
The language is similar to arguments made by Uber to Massachusetts legislators in 2024—that they’re closer to a “travel agency” than a transportation company—giving them the right to keep their drivers misclassified (a European court saw through this argument). That defense was part of a case brought against Uber and Lyft by then-Attorney General Maura Healey, who alleged they were misclassifying their drivers.
The Classification Fight for Worker’s Rights
In exchange for a $175 million settlement with Uber and Lyft, current AG Andrea Joy Campbell dropped the case before the court could rule whether rideshare drivers count as independent contractors.
Campbell’s deal forced Uber and Lyft to abandon a similar ballot initiative to Prop. 22 in Massachusetts and afford drivers a few benefits. One of those benefits, which seemingly required the companies to pay drivers $32.50/hour, falls apart after reading the fine print.
That pay rate only applies to “active hours,” meaning it counts the time when drivers are either on their way to pick up a rider or taking them to their destination, but not the time in-between, referred to as “online working hours.”
“Time spent between trips, waiting for another ride request, or deadheading back from low-demand drop-off areas is neither compensated, nor counts towards the work time thresholds to qualify for sick time, health insurance stipends, and other benefits,” reporting from Forbes explains.
Drivers have attested online that “staying busy the entire hour is impossible due to the oversaturation of drivers.” By comparing active time to online working hours, Forbes calculated the utilization rate (the percentage of time drivers actually get paid for):
For example, if Uber pays $8 for a 12-minute trip, the driver’s pay rate per active hour would be $40 – above the mandated minimum. But if this is the only offer a driver receives and accepts over the next 48 minutes, the driver’s utilization rate would be 12/60= 20% (low!) and the gross pay per working hour would only be $8 (awful!). So, utilization rate is a critical determinant of driver earnings.
This doesn’t include the burden on drivers of paying for gas and insurance, taking another chunk out of their pay. With employee status, drivers could bargain for a contract to cement a firm minimum wage.
To their credit, Campbell’s office has kept their finger on the pulse of independent contractor misclassification. The AGO’s 2026 Labor day report released by its Fair Labor Division shows that in the last year, 1,500 workers across 60 companies were misclassified, leading to more than $2.1 million in penalties and restitution.
“When workers are misclassified as independent contractors instead of employees, they are denied basic workplace rights, including guaranteed minimum wage, overtime pay, timely compensation, accrued sick leave, and more,” Campbell’s office stated in an emailed statement to Working Mass. “Addressing this harmful practice and ensuring that every worker receives the protections they deserve is one of my top priorities.”
But until a firm decision is reached on how to classify rideshare and delivery drivers, a comprehensive answer on gig workers’ rights and the next steps organized labor will need to take will remain in limbo.
There aren’t signs that federal reclassification is on the docket anytime soon, making the state level (for now) the best way forward. Although Campbell’s settlement took a similar bill to Prop. 22 off the ballot, gig work platforms have proven they’ll spend millions to tip the scales in their favor. Gig nursing platforms aren’t introducing legislation in Massachusetts that would reclassify their business like they have in other states, but that could always change.
The conversation surrounding independent contracting finds itself in a sticky spot: many gig-workers prefer the flexibility provided by the work, and use it to supplement their income when their W-2 pay doesn’t cut it. Flexibility is attractive to workers, Dr. Wells explained, due to a lack of stable, guaranteed hours and a set schedule across the labor market. Knowing their schedules ahead of time gives workers more autonomy—scheduling a doctor’s visit or picking a child up from school becomes much easier.
“I think the reality is that there is a problem with existing labor markets in so many of these sectors and, at large, that has real purchase,” said Dr. Wells. “It has so many things at play that it means people are willing to trade all kinds of protections for the allure or the possibility of flexible schedules.”
The national minimum wage has sat at $7.25 since 2009, and the lack of universal healthcare is smothering everyday Americans in medical debt. The leading reported cause of bankruptcy in the U.S. is medical debt, and we’re the only major country without a form of universal healthcare.
A long-term pathway to ending the exploitative nature of gig work and doing away with the independent contractor classification needs to come alongside ensuring workers don’t need to take on extra work to afford basic necessities, and without the threat of medical or student debt held over their heads.
In a world where everyone is guaranteed a living wage and health benefits aren’t up to the whims of your employer, gig workers could stick with their 9 to 5 or even keep driving if that’s what they’d prefer. It may sound like a pipe dream, but the system as it stands puts the working class at a severe disadvantage. Drivers can choose to pick their main job that now pays them a living wage or stay a driver, earning a living wage and receiving the same health benefits that their other job afforded them.
As companies celebrate record profits, the workers who generate that value see none of it reflected in their own paychecks. It’s undeniable that working as an independent contractor provides unmatched levels of autonomy, but that should not come at the cost of the benefits and workplace protections afforded as the bare minimum to every other worker in the country.
“The rise of [gig nursing] is a symptom of really broken labor conditions,” Dr. Wells said.
That’s how I try to think about it. And so when people say, ‘Well, let’s fix gig nursing,’ I think, ‘No, let’s fix the conditions that gave rise to gig nursing.’
Matt Wolfinger is a data journalist and a contributing writer to Working Mass.
The post When Workers, Driving Customers or Saving Lives in the ER, Become Independent Contractors appeared first on Working Mass.
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