My name is Daniel Ocampo, and I am a lawyer with the National Employment Law Project (NELP), a national nonprofit with more than fifty years of experience advocating for the labor and employment rights of underpaid workers. NELP works extensively at the federal, state and local levels, and regularly advises legislative committees and state regulatory authorities across the country on policy issues concerning low wage workers. Relevant for the legislation that the committee is considering today, NELP works with groups of app-based workers, supporting campaigns at the local, state, and federal levels for policies to improve working conditions for this exploited workforce. We have testified before this committee in prior years on similar legislation.
I am grateful to have the opportunity to testify today in qualified support of S.B. 1487.
Connecticut Drivers Deserve a Better Deal
App-based ridehail and delivery drivers increasingly provide critical labor in Connecticut—supporting the backbone of the state’s transportation infrastructure, and delivering meals, packages, groceries, medications, and more across the state every day. The companies that rely on these workers, however, have avoided paying minimum wages and complying with basic workplace laws by classifying them as independent contractors. As long as these companies classify their workers as non-employees, the workers do not have a right to a guaranteed minimum wage, paid leave, unemployment insurance, workers’ compensation, or employer-provided healthcare.
Despite their centrality to Connecticut’s economy, these workers regularly earn subminimum wages for difficult and dangerous work.[1] Worse, the pay is not only low but inconsistent job-to-job and week-to-week, which makes it difficult for workers to care for their families and themselves, pay their bills on time, or build up savings.
Connecticut’s app-based drivers deserve a fair deal. At the very least, that means a pay standard and the same basic rights Massachusetts and New York drivers already receive. At best, it means recognizing that drivers deserve the full slate of rights and protections Connecticut employees enjoy.
This Bill Falls Far Short of Providing Even the Basic Rights that App-Based Workers Enjoy in Nearby States
As discussed extensively in the Comptroller’s report last month on working conditions in the ridehail industry,[2] Massachusetts recently extended a host of workplace protections to drivers, among them: paid sick leave, occupational accident insurance, a health insurance stipend, and most critically, a minimum wage.[3]
Massachusetts is not alone in ensuring drivers are protected by basic workplace standards. In New York City, ridehail drivers and food delivery workers won a pay floor that ensures they are guaranteed hourly pay equivalent to the city’s minimum wage, and has a cash component designed to fund paid sick leave and workers’ compensation.[4] And at the state level, these workers are eligible for unemployment insurance if they are terminated or deactivated.[5] In Washington and Minnesota, app-based workers have similarly won a pay floor, and drivers in other states and cities across the country are currently fighting for these same protections.[6]
In short, in a number of states drivers now have some floor of workplace rights, and a guarantee that they will no longer earn subminimum wages. In none of those places has demand collapsed or the industry failed. Data from New York City show how app-based worker wages have increased substantially without any significant hit to consumer demand.[7] Uber, Lyft, DoorDash, and others continue to do business in these places profitably and without issue.
Given this weight of evidence, there is no justification for Connecticut’s ongoing failure to guarantee tens of thousands of its critical workers the protection of a minimum wage and workplace rights. This committee must move to pass substitute language to enshrine these fundamental guarantees in state law—or to ensure compliance with laws already on the books.
Workplace Transparency is Essential
Notwithstanding the shortcomings of this bill, its focus on transparency is important, and a logical place to begin more serious regulation. Currently, app-based drivers have incredibly limited access to information about how their work is assigned and compensated. Workers are kept largely in the dark as to how their pay is calculated, and how their pay relates to fares consumers are charged.
Although Uber many years ago guaranteed its drivers a fixed percentage of each fare (first 10%, then 20%), driver pay is now completely uncoupled from consumer fares, and is determined according to black box algorithms whose basic inputs the company refuses to divulge.[8] Now, the companies regularly take commissions of 30, 40, or 50% of the fare—predatory price and wage-setting practices that siphon cash from the pockets of Connecticut workers and consumers to tech billionaires.[9]
S.B. 1487 would represent a small step forward for workers, requiring companies to disclose information on how it sets pay, and what companies pay their drivers out of each customer fare. It would also give consumers more information about how prices are set, and inform consumers how much of their fare goes to drivers as wages, and how much is retained by the company as a service fee.
But real transparency requires more than is in this bill. The bill should also provide for the following:
- Pay reporting to the state
The bill should ensure that the pay disclosures made to drivers are also transmitted to the state Department of Labor in monthly reports in aggregated and anonymized form. As underlined by the Comptroller’s report, the state currently has no idea how many app-based drivers are on Connecticut’s streets, let alone whether they are being paid minimum wage, or suffering systemic pay discrimination on the basis of their race or gender. Collecting data like this is key to good government and to effectively regulating the taxi and delivery industry.[10] - Recommendations for a pay standard
With this pay data in hand, the Department should be tasked with formulating a recommendation for a driver pay standard. The objective should be to ensure that TNC and DNC drivers are guaranteed an independent contractor equivalent to the state’s minimum wage of $16.35 an hour, accounting for all work time as well as the significant operating costs borne by drivers, such as auto insurance, gas, and vehicle depreciation. - Enforcement
The bill as currently drafted has almost no enforcement provisions. The committee should pass amended language that provides both a private right of action for workers and consumers to enforce violations of the transparency provisions, and it should empower the Department of Labor to enforce such violations as well.
Connecticut is Losing Tens of Millions of Dollars in Unpaid Taxes to Silicon Valley
In his report, Comptroller Sean Scanlon found that Uber & Lyft alone have avoided $16 million, at the very least, in state taxes over the last few years.[11] Despite profiting off the labor of tens of thousands of Connecticut workers, the companies have refused to contribute a dime in unemployment insurance taxes, workers’ compensation premiums, or paid leave contributions to the state.
The $16 million estimate is also likely much too low, per the Comptroller’s own admission. It rests on a backdated estimate that there are around 12,000 ridehail drivers in the state—certainly a very significant undercount, but the best the Comptroller could guess given the total lack of data available from Uber and Lyft. Information from other states bears this out.
- The State of Massachusetts ran an audit, and found that Uber and Lyft probably owed about $124 million in UI taxes in the decade they’ve been doing business in the state.[12]
- A 2020 California study estimated the companies owed $413 million over only 5 years.
- In New Jersey, the Labor Department settled a case with Uber alone for $100 million over its failure to pay unemployment taxes for a five-year period, The state is now going after Lyft for $16 million.[13]
- In late 2023, NY AG’s office settled cases with Uber and Lyft for a total of $328 million.[14]
In short, Connecticut is leaving money on the table by refusing to enforce its laws. Under Connecticut’s Unemployment Compensation Act, employers are required to pay taxes on their workers if they are employees under the strict ABC test. In other words, unless Uber or Lyft can convincingly show a court that its drivers are workers operating “outside of the usual course of [the company’s] business,” Gen. Stat. § 31-222 (2024), they are unlawfully evading their tax obligations to the state as well as their employment obligations to their workers. The General Assembly should act on the Comptroller’s recommendations and rectify this problem.
Conclusion
NELP urges the Committee to move forward with substitute language on this bill, requiring—at a minimum—basic transparency for workers and consumers, as well as data reporting to the Department of Labor, and putting in motion a process to enshrine and enforce minimum compensation standards in state law. We also urge the committee to take seriously the Comptroller’s report, and to take steps to ensure that these companies are paying their fair share in state taxes and worker contributions.
Connecticut’s app-based drivers deserve a better deal.
End Notes
[1] Ken Jacobs, Michael Reich et al., Gig Passenger and Delivery Driver Pay in Five Metro Areas, U.C. Berkeley Lab. Ctr. (May 2024), https://laborcenter.berkeley.edu/wp-content/uploads/2024/05/Gig-Passenger-and-Delivery-Driver-Pay-in-Five-Metro-Areas.pdf.
[2] Office of the State Comptroller: Rideshare Report (Feb. 2025), https://osc.ct.gov/wp-content/uploads/2025/02/OSC-Rideshare-Report-FINAL-1.pdf.
[3] Uber and Lyft Settlement Information and Frequently Asked Questions, Mass. Office of the Attorney General (2024) https://www.mass.gov/info-details/uber-and-lyft-settlement-information-and-frequently-asked-questions.
[4] NYC Taxi & Limousine Commission Website: Driver Pay Rates https://www.nyc.gov/site/tlc/about/driver-pay-rates.page;
NYC Dept. of Consumer & Worker Protection Website: Minimum Pay Rules, https://www.nyc.gov/site/dca/workers/Delivery-Worker-Public-Hearing-Minimum-Pay-Rate.page.
[5] Governor Hochul Announces Unprecedented Settlement Agreement Between the NYS Department of Labor and Uber, N.Y Gov. Website (Nov. 2023), https://www.governor.ny.gov/news/governor-hochul-announces-unprecedented-settlement-agreement-between-nys-department-labor-and.
[6] Notice of Driver Rights Under the Washington State Minimum Wage Act, Wash. Dept. of Lab. & Industries, https://lni.wa.gov/workers-rights/_docs/Notice%20of%20Rights-English.pdf; Max Nesterak, Minimum Wages for Uber and Lyft Drivers Take Effect Sunday, Minnesota Reformer (Nov. 29, 2024), https://minnesotareformer.com/2024/11/29/minimum-wages-for-uber-and-lyft-drivers-take-effect-sunday-and-other-labor-news/.
[7] See DCWP Data, Q1 2024 (showing that over the first six months of 2024, delivery workers’ hourly pay increased from a sub-minimum wage of $10.62, to $19.26 by April, and $22.48 by June), https://www.nyc.gov/assets/dca/downloads/pdf/workers/ Restaurant-Delivery-App-Data-Q1-2024.pdf; DCWP Data Q2, 2024, (showing that in the year after the pay standard, there was a 5 percent year-on-year increase in the number of weekly deliveries made, to 2.64 million), https://www.nyc.gov/ assets/dca/downloads/pdf/workers/Restaurant-Delivery-App-Data-Q2-2024.pdf
[8] Len Sherman, Uber’s CEO Hides Driver Pay Cuts to Boost Profits, Forbes (Dec. 2023), https://www.forbes.com/sites/lensherman/2023/12/15/ubers-ceo-hides-driver-pay-cuts-to-boost-profits/. Dan Ocampo, Uber’s Price Gouging and What We Can Do About It, NELP (Nov. 2024) https://www.nelp.org/ubers-price-gouging-and-what-we-can-do-about-it/.
[9] Uber Takes Us for a Ride, PowerSwitch Action (2024), https://www.powerswitchaction.org/resources/uber-takes-us-for-a-ride.
[10] A recently passed Colorado law could serve as a model. Colo. S.B. 24-075, An Act Concerning Requirements for Transportation Network Companies (2024).
[11] Office of the State Comptroller: Rideshare Report (Feb. 2025), https://osc.ct.gov/wp-content/uploads/2025/02/OSC-Rideshare-Report-FINAL-1.pdf.
[12] Report: Assessing Transportation Network Companies’ Financial Obligations to Massachusetts Programs, MA Office of the State Auditor (Apr. 2024), https://www.mass.gov/report/assessing-transportation-network-companies-financial-obligations-to-massachusetts-programs.
[13] Uber Pays $100M in Driver Misclassification Case, NJ Dept. of Labor and Workforce Development (Sept. 2022).
[14] Lyft and Uber Settlement, N.Y. State Attorney General, https://ag.ny.gov/lyft-uber-settlement.
Related to
About the Author
