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Uber and Lyft roll out new benefits for California drivers under Prop 22

Uber and Lyft roll out new benefits for California drivers under Prop 22


The companies will provide guaranteed minimum wages and health care subsidies

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Photo by ROBYN BECK/AFP via Getty Images

Following their victory last month in California on the Prop 22 ballot measure, Uber and Lyft have unveiled the new “benefits” for California drivers on their platforms, including guaranteed minimum earnings and stipends for health care.

“Even though we’ve won the vote, we’re still not done,” Uber CEO Dara Khosrowshahi said in a blog post announcing the benefits. “In fact, we’ve only just begun to improve independent work together.”

Gig economy companies, including Uber, Lyft, and DoorDash, spent more than $200 million on the “Yes on 22” campaign. Prop 22 exempts them from AB5, a California state law requiring them to treat their workers as employees. The companies said AB5 would increase wait times and prices for customers, while taking flexibility away from drivers.

Prop 22 allows the companies to continue categorizing drivers as independent contractors

Prop 22 allows the companies to continue categorizing drivers as independent contractors and also provide some additional benefits. Opponents argued that the provisions in Prop 22 were not equal to the economic security of full-time employment.

Under Prop 22, gig workers — including ride-share drivers — will be paid 120 percent of California’s minimum wage of $13 per hour, which increases to $14 per hour in 2021. For ride-share drivers, this applies only during active hours: when they have a passenger in their vehicle or are en route to pick up a passenger. It requires workers with 15 active hours a week to receive a health care stipend.

Uber’s benefits program calls for drivers to be paid at least 20 percent more than the pickup city’s minimum wage plus 30 cents per mile for expenses. That 30 cents per mile doesn’t apply to delivery workers on foot or bicycle. Drivers who earn less than the guaranteed minimum over a two-week period will be paid the difference automatically.

Lyft’s pay schedule is similar, with its first guaranteed earnings period beginning on December 16th. At both companies, drivers who earn more than the guaranteed minimum will keep all of their earnings — there is no upper limit. They’ll also keep 100 percent of their tips

For health care, Lyft will provide a quarterly health care subsidy for drivers who drive an average of at least 15 hours per week. To qualify, drivers have to provide proof they are enrolled in a qualifying health care plan. Uber’s health care stipend also requires an average of 15 hours per week, and drivers have to prove they are the primary policyholder on a qualifying health insurance plan. Uber drivers receive 50 percent of the stipend — amount still TBD — if they average 15 active hours a week and 100 percent of the stipend when they average 25 active hours per week.

Drivers can qualify for the health care subsidies beginning on January 1st.

To cover the costs of the new benefits, Uber said it would apply a fee of up to $1.50 to the cost of rides and up to $2 on meal deliveries, the Financial Times reported. Lyft did not provide details on any additional customer fees.

Prop 22 mandates current ride-share drivers receive safety training before July 1st, 2021. Drivers who sign on after January 1st will be required to complete the safety course 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 a 24-hour period, and they will be enrolled in injury protection insurance that covers medical expenses, disability payments, and survivor benefits.