In 2019, California’s AB 5 was signed into law. The law required companies that use freelancers working in “gig” jobs to treat them as regular employees. This meant paying the employment taxes for these workers and providing benefits. Certain professions were exempt, such as freelance editors and writers, photojournalists, and musicians. Gig drivers working independently for rideshare companies were not exempt originally. Companies like Lyft and Uber balked and started fighting the new law with Proposition 22.
California’s Proposition 22 eliminated the requirement to deem drivers for companies like Lyft and Uber as employees rather than contractors. It eliminated the requirement for the companies to treat those gig workers like employees and offer company benefits. The risk with Proposition 22 was that the companies would greatly reduce the number of drivers they had in California’s towns and cities, putting many at risk of unemployment.
Studies have found that 9 out of 10 contract drivers believe Proposition 22 has been beneficial for them. Over 75% say that the change helped them in terms of benefits and flexible hours. And, 54% believe their situation would be worse if Proposition 22 hadn’t passed.
What if you’re not one of the satisfied drivers? What if you don’t feel that you’re being treated fairly? Do you have any rights or way to ensure you’re getting what you expected from California’s Proposition 22?
The Promise of Higher Wages and Better Benefits and the Realities of These Promises
In exchange for Proposition 22 passing, rideshare companies pledged that their drivers would all be making minimum wage. Both Lyft and Uber said they supported a minimum wage of $21 per hour for their gig workers. This way, workers would gain benefits that come from a higher wage without having to lose their flexibility when it comes to the number of hours and times when they work.
Yet, many drivers are saying they’re just not getting paid that much. Berkeley Labor Center estimated that the average wage of contract drivers is around $5.64 an hour. Around 85% admitted they still don’t get health insurance from the companies, and others say they’ve yet to figure out how to access and sign up for policies.
One Los Angeles driver for both Lyft and Uber only reached his income goal by increasing his weekly hours from 40 to 60 hours. To be guaranteed the promised minimum wage and reimbursement benefits of 30 cents per mile, he had to drive a set number of hours each week. That time is only counted when the passenger is actually in the car. It doesn’t count time spent driving to pick up a passenger. Not only that, but the IRS business use of a vehicle deductible of 56 cents is almost double Uber’s reimbursement rate.
He also felt that the promised health care stipend was difficult to get as there was no guidance from the companies on how to get it. Drivers that were able to sign up were told they didn’t qualify. For those that do qualify, the stipend is currently around $400 a month, which tends to only cover about 80% of a basic health insurance plan.
To qualify for Uber’s health insurance subsidy, drivers must log 25 hours of active driving each week. “Active” doesn’t count time spent waiting for a passenger to come out of the airport terminal, home, or business. It only counts the actual time that the passenger is in the car being transported. If a driver qualifies for a spouse or partner’s health insurance, Medicare, or Medicaid, they’re also not eligible for the health care stipend.
There’s also a healthcare subsidy for Lyft drivers too. Drivers must average 15 to 25 hours a week to get a 50% reimbursement on the average Affordable Care Act. If they average 25 or more hours per week, they’ll get 100%. You cannot qualify for employer-sponsored health care or be on a Medicare or Medicaid plan. There’s a long list of insurance plans that disqualify you from this subsidy, so read it carefully.
Another complaint has been that the Uber tool that allowed drivers to set their rates independently was removed after Proposition 22 passed. Uber claims they removed it to increase the number of drivers available to Uber customers after pickup times increased by more than 50%. Uber feels it was forced to remove these options to ensure passengers were not waiting too long and canceling their ride requests. Lyft agrees that there are not enough drivers to meet demand and have had to make changes.
Yet, without setting rates independently and being forced to use the company’s rate model, drivers no longer feel they’re truly independent workers. They feel if they were paid a fair wage, working as a contract driver would draw more workers.
What Can You Do If You Don’t Feel You’re Receiving a Fair Wage or Other Promised Benefits?
What happens if you don’t feel the company you drive for is keeping their end of the bargain? You’re working 30 hours a week and only making around $5 an hour. You think you qualify for health insurance reimbursement, but you can’t find out how to sign up, or you sign up and are told you don’t qualify. What happens now?
Start by talking to the company and asking questions. You may not be able to do anything, but it never hurts to ask questions and do some research.
Uber has several protective policies in place, but they may not meet your needs. For example, Uber has a strict policy on sexual harassment for drivers, customers, and third parties. This includes being uncomfortably stared at or leered at, questions of a personal nature, comments on your appearance, flirting, and gestures. Drivers are protected from having customers who engage in acts of a sexual nature in the driver’s vehicle. Retaliation is not allowed either. Nor is discrimination involving race, age, marital status, religion, gender identity, or disability. It’s easy to file complaints when it comes to those issues.
Lyft has similar protective policies for drivers. Riders and drivers cannot be discriminated against in any protected class such as race, gender, disability, etc.
One of the problems when driving for a company like Lyft or Uber is found in the Terms of Use. Drivers need to carefully read these terms before agreeing to work for the companies as a contract driver. Uber’s contract has an arbitration agreement that states you may not bring any “class, collective, or representative action” against the company. Lyft has similar policies in place.
There are exceptions to these clauses that include federal and state employment protections like sexual harassment, discrimination, etc. This is why it’s best to get a free consultation with an attorney who specializes in employment law. With an attorney’s help, you’ll understand your rights and what steps to take next.
Shegerian Conniff offers free initial consultations to California’s workers, so you’ll have the professional advice you need without having to spend money you can’t afford to spend. Give us a call or reach us online to arrange a virtual consultation.
