Home > Business > California post-Prop. 22: Gig workers to see pay changes, customers to see higher prices

California post-Prop. 22: Gig workers to see pay changes, customers to see higher prices


Californians this week will start to see the effects of Proposition 22, the ballot measure that 58% of the state’s voters passed in November.

The measure exempts app-based, on-demand companies from California labor law and keeps gig workers classified as independent contractors instead of employees. Ride-hailing drivers and app-based delivery workers will see some gains in pay and benefits but not full employee protections.

Some of the companies — which together spent more than $200 million to pass Proposition 22 — now say they will raise rates for customers. Uber Technologies Inc.

is calling the increases on every ride and delivery a “California Driver Benefits Fee,” which it said will vary depending on the costs of operating in different markets. DoorDash Inc.

said it is “exploring slight percentage increases” in service fees, while Lyft Inc.

and Instacart on Monday did not address questions about raising rates and fees.

See: Uber and Lyft win fight to keep drivers as contractors in California

Gig Workers Rising, a worker group that opposed Proposition 22, on Monday called the increase in consumer rates “a corporate bait and switch,” saying in a statement that “Uber and other app corporations said time and again during their Prop. 22 campaign that if the measure failed to go through, riders could expect higher rates. Now that Prop. 22 has passed, Uber is announcing that riders will have to shoulder increased costs after all.” 

Drivers for Uber and Lyft, and delivery workers for DoorDash and Instacart, will begin this week to earn guaranteed earnings equivalent to 120% of the minimum wage during their engaged or booked time — which excludes the time they spend waiting for passengers or deliveries — the companies said Monday. They will also receive 30 cents for each booked mile, and be covered by occupational accident insurance for injuries that happen while on the job.

In addition, workers who log at least 15 hours a week will become eligible for subsidies for use toward health insurance come Jan. 1.

Lyft will review its drivers’ earnings and make up the difference if they got less than the guaranteed amount, the company said. The review will happen biweekly, and tips will not count toward the earnings guarantee. Health-care subsidies will be paid out quarterly, Lyft and Instacart said.

DoorDash said soon after Prop. 22 passed that it expected to pay out the first health-care subsidies in April 2021.

Also Monday, Gig Workers Rising announced an app for workers meant to help workers understand the benefits they are entitled to under Prop. 22. The app, which will be available Jan. 11, will also allow workers to provide information about pay and benefits that the group said will “show that the benefits offered by Prop. 22 are completely inadequate.”

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