In 2020, California voters approved Proposition 22, a law that app-based companies including Uber, Lyft and DoorDash said would improve working conditions while keeping rides and deliveries cheap and plentiful for consumers. But a report published today suggests that car-sharing drivers in the state have instead seen their effective hourly wages drop compared to what it would have been before the law went into effect.
The study by PolicyLink, a forward-thinking research and advocacy organization, and Rideshare Drivers United, a California driver advocacy group, found that after drivers in the state pay for costs associated with doing business, including gasoline and vehicle wear, they earn an hourly wage of $6.20, well below the California minimum wage of $15 an hour. The researchers calculate that if drivers became employees instead of independent contractors, they could earn an additional $11 per hour.
“Driving has only gotten harder since Proposition 22 was passed,” said Vitali Konstantinov, who started driving for rideshare companies in the San Diego area in 2018 and is a member of Rideshare Drivers United. “Although we are called independent contractors, we don’t have the ability to negotiate our contracts and the companies can change our terms at any time. We need employment rights that are extended to employees who work through an app.”
Uber spokesman Zahid Arab wrote in a statement that the study was “deeply flawed,” saying the company’s own data shows tens of thousands of California drivers were earning $30 an hour on the data studied by the research team, although it Uber’s figure doesn’t take driver costs into account. Lyft spokesman Shadawn Reddick-Smith said the report was “not tied to 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 employees to have their cake and eat it, too. At the time, there was a new state law targeting the gig economy, AB5, intended to transform app-based workers from independent contractors into employees, with all the worker rights associated with that status: health care, workers’ compensation, unemployment insurance. The law was based on the idea that the companies had too much control over employees, their wages and their relationships with customers to be considered independent contractors.
But for the Big Gig companies, that change would have cost hundreds of millions of dollars annually, according to one estimate. The companies argued that if they had to treat drivers as employees, they would struggle to keep working, that drivers would lose the ability to set their own schedules, and rides would become scarce and expensive. The companies, including Uber, Lyft, Instacart and DoorDash, launched Prop 22 in a bid to get an exemption for employees who drive and deliver on app-based platforms.
Under Proposition 22, which came into effect in 2021, shared car drivers will remain independent contractors. They receive a guaranteed rate of 30 cents per mile and at least 120 percent of the local minimum wage, excluding time and miles driven between trips while drivers wait for their next rate, which Uber says represents 30 percent of driver miles while you are in the app. Drivers receive accident insurance and workers’ compensation, and they may also qualify for a health grant, although previous research by PolicyLink suggests that only 10 percent of California drivers have used the grant, in some cases because they don’t work enough hours to qualify. .
