App-based ride-hailing and delivery companies like Uber, Lyft, and DoorDash will have to pay California gig workers potentially millions of dollars in unpaid vehicle costs between 2022 and 2023.
Unpaid money is Proposal 22, a controversial law that classifies gig workers as independent contractors rather than employees and promises them half-hearted protections and benefits. For example, gig workers are guaranteed a minimum income for the time they “work” at the gig, rather than a guaranteed minimum wage. Time spent between rides and transfers is not guaranteed.
Part of Prop 22 It is stipulated that drivers who have paid a minimum transportation fee will be reimbursed for the cost of the vehicle. Starting in his 2021 when Proposition 22 took effect in California, drivers began receiving $0.30 per mile driven while they were “actively engaged.” The law also stipulates that interest rates should be raised in line with the pace of inflation. So with his 6.8% inflation rate hike in 2022, those payments should jump him to $0.32 per mile. And in 2023, it should have gone up another $0.02 to $0.34 per mile.
A few cents may not seem like a lot, but drivers drive thousands of miles each year, so it adds up to a lot of money. Especially considering there are about 1.3 million gig drivers in California. industry reports.
(By the way, with the lackluster benefits given to gig workers under Proposition 22, their Vehicle mileage deduction rate Half the standard rate for business owners and employees ($0.655 per mile in 2023). )
Pablo Gomez, who has been a full-time Uber driver since 2019, said he noticed his payments never increased beyond $0.30. los angeles times, which originally reported the discrepancy. Now we know that no driver received an increased payout because the app-based company did not implement the adjustment.
Uber, DoorDash, Lyft, and Grubhub all told TechCrunch they didn’t adjust driver reimbursement rates because they were waiting for the California Department of Treasury to publish adjusted rates. Under Proposition 22, the Treasury is indeed obligated to calculate and publish adjusted interest rates annually, but it failed to do so in a timely manner.
After studying the language of Proposition 22, Mr. Gomez attempted to contact the state treasurer’s office on April 13, but was ignored. He then tweeted directly to California Treasurer Fiona Marr, asking why rates hadn’t changed yet. Sergio Avedian, gig worker, rideshare guy, boosted the tweet. May 10th, Ma answered It said the interest rate adjustment had finally been made public. Uber and DoorDash immediately started sending backpay to drivers to avoid facing class action lawsuits.
Avedian said he was prepared to sue if the company did not agree to pay retrospectively. “I had a law firm ready and I was going to be the lead plaintiff,” he told TechCrunch.
Lyft told TechCrunch that it is now starting to issue backpays. Grubhub said it would begin making retroactive payments to drivers, but Instacart did not have time to comment.
The state Treasury failed to explain why it took so long to provide adjusted vehicle reimbursement rates (18 months for 2022 rates). According to Avedian, the Treasury Department has put Proposition 22 on hold due to uncertainty about its status. unconstitutional verdict August 2021, but in March, Overturned by California Court of Appeals that decision. Industry experts say even though the lower court’s ruling found Proposition 22 unconstitutional, it was still a national law and the Treasury Department should have treated it as such.
I asked the app-based company if they had reached out to the department to encourage them to update their rates within the past year and a half. Uber said it reached out once in January 2022, and DoorDash said it had repeatedly asked for mileage rate updates “back to January 2022.” Lyft also said it had reached out to the Treasury Department for information, but he declined to say when or how many times he had done so. I also asked companies if they warned gig workers about Treasury delays and reassured them that they would eventually be reimbursed. no one had.
That’s not surprising. Despite finding new and exciting ways to extract more work from workers for the least possible wages, app-based gig companies have yet to achieve a true measure of profitability. . (look: algorithmic wage discrimination, hidden tip and steal chips) When I asked an Uber spokesperson why the company didn’t do its own calculations for workers, he said, “It’s up to the Treasury Department to make that fee mandatory.”
This is not a “better to ask forgiveness than to get permission” argument, but along the same lines. It is better to hope that no one will notice that you are not paying your employees properly than to actively pay them properly.
Not all drivers end up receiving backpay. Many ride-hailing drivers exceed the minimum fare and are not eligible to receive a refund for their vehicle. However, those who primarily rely on Uber Eats, DoorDash, and other food delivery platforms tend to rely on tipping for their income, so payments should be reflected in their accounts.
Avedian said he drives part-time and earns about $85 from Uber solely because of his job. His wife also worked part-time and earned over $200 from DoorDash.
But what about workers who drive full-time?
“If you’re a full-time DoorDash, Uber Eats, Grubhub driver, you’re driving a solid 5,000 miles a month. There’s no question about that,” he said. “They will end up with hundreds of millions of dollars in debt. It’s going to be very expensive.”
None of the companies I spoke to disclosed how much they planned to pay drivers, but behind-the-scenes calculations suggest the companies could end up paying millions of dollars. .
In addition to Uber, Lyft, DoorDash, Grubhub and Instacart, related companies hiring gig workers include Amazon Flex, Target’s Shipt and Walmart’s Spark.
lack of transparency
Avedian has collected screenshots of himself, his wife, and podcast listeners backpaying back. One of his main complaints is the complete lack of transparency from the company regarding the calculation of these amounts. None of the companies provide mileage breakdowns to drivers.
Uber is the only company that even specifies that payments are due to California Prop 22 benefits. DoorDash drivers will only see random payments.
“Everybody’s got money, and the drivers are like, ‘Oh, I got $400.'” I got $800.’ is. “
In fact, Avedian keeps track of net income, mileage, number of trips, and Prop 22 adjustments all in a spreadsheet. According to his calculations, the amount owed to him from Uber was actually $3 less for him.
“I call this the nickel and decay of the gig economy,” Avedian said. “$3 times a million people is another $3 million. It’s just a matter of not having
In May, Colorado passed a bill aimed at making gig worker platform workers more transparent. has been shut down.
“Millions of people drive cars for these companies, but are deceived by the lack of transparency,” Avedian said. “There must be something to hide, otherwise don’t be afraid of transparency.”
