2020, California Voters approved Proposition 22, a law that app-based companies like Uber, Lyft and DoorDash say will improve conditions for workers while providing consumers with cheap and plentiful rides and deliveries. But a report released today shows that the real hourly wages of ride-sharing drivers in the state have fallen compared to before the law took effect.
Research by progressive research and advocacy group PolicyLink and California driver advocacy group Rideshare Drivers United found that rideshare drivers in the state generate $6.20 an hour after paying costs associated with doing business, including gas and vehicle wear and tear , well below the California minimum wage of $15 an hour. The researchers calculated that drivers could earn an extra $11 an hour if they became employees rather than independent contractors.
“Driving has become more difficult since Proposition 22 was passed,” said Vitali Konstantinov, who started driving for San Diego-area rideshare companies in 2018 and is a member of the Rideshare Drivers Coalition. “While we’re called independent contractors, we don’t have the ability to negotiate our contracts, and companies can change our terms at any time. We need to extend labor rights to workers where applications are deployed.”
Uber spokesman Zahid Arab wrote in a statement that the study was “severely flawed,” saying the company’s own data showed tens of thousands of California drivers per hour on the date the research team studied Earn $30, though Uber’s numbers don’t account for driver fees. Lyft spokesman Shadawn Reddick-Smith said the report “is not limited by the experience of drivers in California.”
In 2020, Uber, Lyft and other app-based delivery companies promoted Proposition 22 as a way for California consumers and workers to eat their cake. At the time, AB5, a NSW law targeting the gig economy, sought to convert app-based workers from independent contractors to employees, to which all workers’ rights were attached — health care, workers’ compensation, unemployment insurance. The premise of the law is that companies have too much control over workers, their wages, and their relationships with customers, that they cannot be considered independent contractors.
But for Big Gig, the change will cost hundreds of millions of dollars a year, according to one estimate. The companies argue that if they are forced to treat drivers as employees, they will struggle to continue operations, drivers will lose the ability to set their own schedules, and ride-hailing services will become scarce and expensive. The companies, including Uber, Lyft, Instacart and DoorDash, have introduced Prop 22, an attempt to provide exemptions for workers who drive and deliver on app-based platforms.
Under Proposition 22, which goes into effect in 2021, rideshare drivers remain independent contractors. They get a guaranteed rate of 30 cents per mile, as well as at least 120 percent of the local minimum wage, excluding the time drivers spend waiting for their next fare and the mileage Uber says accounts for 30 percent of driver miles on the app. Drivers can get some accident insurance and workers’ compensation, and they’re also eligible for health care subsidies, although previous research by PolicyLink showed that only 10 percent of California drivers used the subsidies, in some cases because they didn’t work enough hours to qualify.