Massachusetts lawmakers debate fallout of 'gig economy'

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BOSTON >> From Beacon Hill to Capitol Hill, Massachusetts lawmakers are struggling to come to grips with a rapidly changing economy and how — and when — regulations are needed.

At the Statehouse, that debate has most recently focused on ride sharing companies like Uber and Lyft, which are upending the taxi industry. Like many of the questions swirling around the new "gig economy," that debate is driven by the digital technology that is revolutionizing the workplace.

In this case, that workplace is a cab.

This week, the Massachusetts Senate passed a bill aimed both at regulating and encouraging ride-hailing services — also known as transportation network companies.

The bill would require drivers to undergo criminal background checks and carry insurance policies of at least $1 million.

But unlike a House version of the bill, the Senate version would not ban drivers from picking up passengers at Boston's Logan International Airport. That provision was included in the House version to appease a struggling taxi industry.

The Senate bill would also create a trust fund paid for by an assessment on transportation network companies of not more than 10 cents per ride. The money would be distributed to municipalities based on the proportion of rides originating in a city or town.

Democratic Senate President Stan Rosenberg said the bill "strikes a balance between allowing an innovative business the ability to thrive while also implementing common sense regulations that protect public safety and consumers."

The bill is also a concession to the popularity of ride-hailing services and an attempt to send the message that Massachusetts is a pro-innovative economy state.

The bill — which was praised by ride-hailing companies — also requires that the companies provide accurate fare estimates, prohibit fare increases during emergencies, and require accommodation of riders with special needs.

Lyft spokeswoman Chelsea Wilson hailed the Senate for passing legislation that she said "expands consumer choice, encourages innovation and ensures passenger safety in the commonwealth."

A six-member House and Senate conference committee will be charged with coming up with a final compromise version of the bill.

Massachusetts politicians have also waived a cautionary flag on the workplaces changes brought on by the online economy.

U.S. Sen. Elizabeth Warren has taken aim at the "gig economy" generated by workers piecing together online odd jobs.

The Massachusetts Democrat acknowledged in a speech earlier this year that internet-based jobs like those created by Uber and Lyft, offer consumers greater choice and workers more flexibility.

But Warren also warned the surging new economy — where workers can pick up "gigs" online, from driving cars to performing household errands through online services like TaskRabbit — also has a dark side.

Warren said workers who patch together an income in the "gig economy" are often denied benefits that many traditional employees enjoy — from paid vacation and health coverage to retirement plans, workers compensation and the ability to unionize.

"In a healthy economy, disruption is inevitable. But disruption means it's time to adapt to changing circumstances," Warren said.

Warren said the problems facing gig workers are similar to those facing temporary workers, contract workers, part-time workers and those reclassified as "independent contractors."

She said the nation needs to guarantee that every worker — even those without an employer — pays into Social Security, is covered by catastrophic insurance, and has some paid leave. She also said that employee benefits — including health care and retirement — should follow the worker no matter what job they're doing.


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