Uber rolls out fee for California customers as Prop. 22 takes effect

Company charging passenger to cover cost of new benefits for drivers

Proposition 22 went into effect this week, and Uber customers in California should expect to see higher prices, despite campaign promises that voting for the ballot measure would keep costs down.

Uber announced the California Driver Benefits Fee Monday. The actual dollar amount varies by location and varying operating costs in different markets, but San Francisco customers can expect to see up to $.30 tacked on to rides and up to $2.00 on food deliveries.

“It is shameless that these billion dollar corporations have spent millions to deny workers real benefits, and are now offsetting the costs of their nearly nonexistent benefits to riders,” Lauren Casey, an organizer with the opposition campaign to Prop. 22, Gig Workers Rising, said in a statement, calling Uber’s last minute announcement a “bait and switch.”

Led by Uber and Lyft, a coalition of app-based companies spent roughly $189 million on the campaign to pass Prop. 22. The measure allowed them to circumvent statewide labor law AB 5, which would have otherwise required them to transition their workers’ status from independent contractors to employees and provide a slew of labor benefits as a result.

Key to the coalition’s successful messaging was the idea that classifying workers as employees would saddle app-based companies with prohibitive expenses associated with statewide labor protections that, ultimately, would be passed to customers in the form of more expensive fares.

It passed in November with 58.6 percent approval in California, although only 40 percent of San Francisco voters supported the measures. Now, those same voters must foot the bill for Prop. 22.

Though Prop. 22 frees the companies from providing the labor protections required by California state law, it does require Uber, Lyft and others to offer some modest protections such as a healthcare stipend, earnings floor and on-the-job injury protection, all of which drivers will start to see in the coming weeks.

On Dec. 16, a new pay period started for Uber and Lyft drivers that includes the minimum earnings guarantee: 120 percent of local minimum wage and an additional 30 cents per mile for booked time, which means the time a driver is spent actually driving a passenger or a delivery, but not the time that is spent waiting for or going to a pick-up, for example.

Drivers were also automatically enrolled in an injury protection plan to help cover costs should someone be hurt while on the job.

Those who can prove they’re enrolled in a qualifying healthcare plan and performing at least 15 hours of weekly driving with a passenger will get a healthcare stipend, though how much will be determined by the statewide public option provider Covered California later this year.

In communications with their gig workers, both Uber and Lyft celebrated this week’s launch of Prop. 22 as a “stronger safety net” that doesn’t compromise driver flexibility to set their own schedules.

Gig Workers Rising maintained its position that these benefits are “too meager,” especially in the middle of a pandemic and economic recession, and it launched an app earlier this week that provides gig workers with information about their rights through Prop. 22 and a way to confirm they’re getting what they’re owed.

Lyft won’t be announcing a new fee along with the rollout of Prop. 22 benefits this week, but it hasn’t ruled out the possibility of a future price hike entirely, instead hedging by saying it will evaluate how the cost of the benefits impacts the company’s bottom line over the next few quarters.

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