Changes are coming for California drivers! Proposition 22 takes effect this week, and there are some big changes headed drivers’ (and couriers’) way. Senior RSG contributor Paula Gibbins breaks down what California drivers can expect to see below.
California drivers: regardless of how you voted, Proposition 22 takes effect this week. To remind you, the passing of Prop 22 promised changes to driver benefits, including guaranteed minimum earnings, injury protection paid for by Uber and a healthcare stipend.
If you’re a California driver, you should have received an email from Uber stating what the changes are, along with tabs for learning more about each one, but we’re going to go through them here today as well. If you’re interested in more details, check out the Uber blog post.
Changes Coming for California Drivers [Prop 22 Impact]
According to the email California drivers received from Uber:
We’ll begin with the healthcare stipend, since any kind of healthcare coverage is a new concept for drivers. The way it sounds is you have to be signed up for a qualifying plan and average at least 15 active hours per week each calendar quarter to receive a stipend to help cover the cost of your healthcare plan.
Note: 15 hours of active time realistically means, for drivers, 20-30 hours of online time. Since it’s per company, you can’t combine hours unless you do 15 active hours with Uber and 15 active hours with Postmates. This is not a good deal for drivers! This should have been combined and allowed drivers to work for multiple apps, having all hours on any platform count as ‘active’ time.
In this instance specific to the healthcare stipend, active hours start as soon as you accept a trip and end when you complete it. For the healthcare plan side of things, you must be the primary policyholder. If you’re on Medicare, Medicaid or a plan paid for by an employer, you cannot receive the stipend from Uber.
Under their “How it works” section for this, Uber states:
- To qualify for a healthcare stipend, you must be the primary policyholder. Medicare and Medicaid plans and those paid by employers are excluded from this benefit.
- If your plan qualifies, you’ll need to submit proof of health insurance enrollment. This may include a health insurance identification card or coverage forms.
- Receive 50% of the stipend when you average at least 15 active hours per week over the calendar quarter.
- Receive 100% of the stipend when you average at least 25 active hours per week over the calendar quarter.
Guaranteed Minimum Earnings
This one is fairly straightforward, but of course, comes with some stipulations. The basic concept is that you’ll earn a minimum of at least 20% more than the city minimum wage of where you’re picking up passengers or food, PLUS $0.30 per mile for expenses when you are “active”.
One big stipulation that stands out is that “the $0.30/mile compensation does not apply for delivery people on foot or bicycle.” It does apply if you are doing Uber Eats deliveries using a car or motorbike.
This means, if you do Uber Eats by using your bicycle or walking, the minimum earnings doesn’t apply to you because it’s meant to go toward vehicle expenses such as gas and vehicle wear and tear.
Just like with the healthcare stipend, the “active time” is considered to start when you accept a trip and end when you complete it.
This is slightly better than we’d all feared when Prop 22 was first proposed. Back then, it sounded like active time was only once you picked up the passenger, but the wording they use here sounds like it’s as soon as you accept a trip and are then making your way toward it.
It is unclear, however, what happens if you accept a trip while actively driving someone else. Will the time overlap/double up or will it just kind of mesh together as if it’s one long trip?
Uber goes on to explain, “The guarantee takes into account your trip fares and any money made through promotions. Tips, refunds for tolls and cleaning fees, cancellation fees, and referral payments are not counted toward the guarantee.”
Uber’s post states, “Effective December 16, 2020, you’ll be enrolled in Injury Protection insurance, paid for by Uber.** If you get into a covered accident, this insurance will help protect you and your family from financial hardship.”
Benefits include medical expense coverage, disability payments and survivor benefits. You do not need to take any action. You are automatically enrolled as of Dec. 16, 2020 at no cost to you. It only counts towards trips that start in California or while you’re waiting for a trip while in California.
More details are available to you in the Insurance Hub in your Uber Driver app.
Other Changes Coming to California Drivers
Along with the big changes mentioned above, there are a few other changes being rolled out now that Prop 22 has been voted in. This is taken directly from the Uber Blog post:
- Deactivation appeals: If your contract is terminated by Uber on or after December 16, 2020, you can now make an appeal through a new process.
- You’re now required to complete a new Prop 22–mandated safety course before July 1, 2021. Safety courses will be made available in the Driver app.
- If you sign up to drive or deliver with Uber after January 1, 2021, you’re required to complete this training before you can take your first trip.
- Required breaks: You’ll be required to go offline for at least 6 consecutive hours if you drive and/or deliver by car for more than 12 hours in a 24-hour period.
Uber Already Increases Fees on Customers
It didn’t take long for Uber to announce the fee increases on customers, which they’re saying goes to health insurance and guaranteed earnings. According to a screenshot this customer shared on Reddit:
California customer and driver response to this was swift. One important point this customer made:
But Uber, you need to stop playing! You’re really telling me that you’re not making enough money DAILY that you can’t cover the driver benefit yourself? Does this mean we don’t have to tip drivers now? Is that seriously the message you’re trying to send?
It’s definitely a concern that some customers could see the words ‘fee’ and ‘guaranteed earnings’ and think their drivers or couriers are being paid adequately and don’t need a tip – this is still far from the truth for the majority of drivers!
Unfortunately, a Berkeley study already pointed out Uber and Lyft could pay drivers more without increasing passenger fares – but that study seems to have had no impact on this fee increase in California.
Another Reddit user pointed out Uber’s never been under any obligation to pay workers fairly, and in fact is using Prop 22 as a benefit to boost their bottom line:
Uber is saving millions of dollars on not having to pay full employee benefits with Prop 22 recategorizing them as contractors. They have been given an exemption to existing law, an advantage to increase their profits by decreasing costs.
But rather than keep prices low you see higher prices and added fees, because surprise surprise they don’t care about drivers they care about their bottom line and manipulated drivers and voters to further their profit seeking agenda.
If you’re a California driver, have you noticed changes to your Uber or Lyft accounts? Share your thoughts and screenshots below or send me an email at harry[at]therideshareguy.com.
-Paula @ RSG