Following their victory with the Proposition 22 ballot measure, Uber and Lyft have released information about the new benefits available to California drivers, including guaranteed minimum earnings and stipends for healthcare.
Gig economy companies spent more than $200 million on the “Yes on 22” campaign, which exempts them from the California state law that requires them to treat their workers as employees. According to the companies, AB5 would have increased wait times and prices for customers while taking flexibility away from its drivers. Prop 22 allows rideshare companies to continue categorizing drivers as independent contractors.
Under Prop 22, Uber and Lyft drivers will be paid 120 percent of California’s minimum wage of $13 per hour, which increases to $14 per hour in 2021. This only applies during active hours when they have a passenger in their vehicles or are en route to pick up a passenger. In addition to that, drivers are required to work 15 active hours a week to receive a healthcare stipend.
Uber’s benefits program looks to pay drivers at least 20 percent more than the city’s minimum wage plus 30 cents per mile for expenses. Drivers who earn less than the guaranteed minimum over two weeks will be paid the difference automatically. Lyft’s pay schedule is similar and its first guaranteed earnings period begins on December 16. There is no upper limit for drivers who earn more than the guaranteed minimum at both companies, and they keep 100 percent of their tips.
Regarding healthcare, Uber drivers have to prove they are the primary policyholder on a qualifying health insurance plan. They will receive 50 percent of the stipend if they average 15 hours a week and 100 percent of the compensation when they average 25 active hours per week.
According to Uber CEO Dara Khosrowshahi, the benefits are not stopping there: “Even though we’ve won the vote, we’re still not done. In fact, we’ve only just begun to improve independent work together.”
To cover the cost of the benefits, Uber is applying a fee of up to $1.50 to the cost of rides and up to $2 on meal deliveries. Lyft has not provided details on any additional customer fees.
In addition to the benefits discussed above, Proposition 22 mandates current rideshare drivers receive safety training before July 1, 2021. Drivers who sign on to the course before January 1 will be required to complete it before they take their first trips. Drivers will also be required to take breaks of at least six hours if they drive more than 12 hours in an entire day, and they will be enrolled in injury protection insurance that covers medical expenses, disability payments, and survivor benefits.
To learn more about the latest rideshare industry news, click here.