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No Surprise, Uber and Lyft Lied About Helping Workers

Uber and Lyft said that California's Proposition 22 would help their drivers. We now have proof they were lying.

Drivers aren’t receiving the benefits gig companies promised in exchange for handing over their rights. (Getty Images)

Earlier this month, a California Superior Court judge ruled that the state’s Proposition 22 ballot initiative is unconstitutional. The decision was a huge win for workers — not only gig workers but everyone who works for a living, all of whom have an interest in ensuring hard-won labor rights, as inadequate as they may be, are not further undermined.

To recap: Prop 22 is the landmark anti-labor law written by so-called gig companies which carves out a separate set of standards for people who work for app-based entities like Uber, Lyft, and DoorDash. The companies spent some $200 million to propagandize for the California state ballot measure. All that campaigning paid off: in November of last year, voters approved the measure. In doing so, they safeguarded these companies’ avoidance of the costs and liabilities that come with being an employer: minimum wage and overtime laws, workers’ compensation, health insurance provision, sick leave, and workplace discrimination protections.

Despite the recent court ruling, Prop 22 remains on the books: the ruling will almost certainly be appealed to the California Supreme Court, and the matter likely won’t be resolved for another year. In the meantime, these companies are busy spreading Prop 22 clones to other states.

One of the strategies gig companies used to sow confusion among voters and drivers was to tout benefits workers would receive in exchange for handing over their rights. Prop 22’s backers said drivers would be paid at least 120 percent of local minimums while actively driving. That “actively driving” is key: given how much of a driver’s shift consists of time in between rides or tasks, the pay is far lower than that. A UC Berkeley study estimates the effective average wage under Prop 22 is as low as $5.64.

Another promise was that drivers would receive a health care stipend. The fine print on this one is extensive: workers must spend at least twenty-five “engaged” hours per week driving — excluding the time between rides — and be the primary policyholder of a plan to access the full stipend. And that stipend is nowhere near the overall cost of health insurance: Uber offers a maximum of $400 a month, much less than the average premium for a family.

A new report looks at how drivers are and are not accessing the stipends. The study was conducted by Rideshare Drivers United (RDU), an organization of gig workers, and National Equity Atlas, which surveyed 531 California-based members of RDU between May and June of 2021, all of whom drive for Uber, Lyft, or other app-based companies.

The study finds that many drivers aren’t getting the promised health care stipends even when they’re entitled to them. Ten percent of the surveyed drivers are receiving the stipend. Forty percent “either never heard about their ability to qualify for the stipends or weren’t sure if they had received notification.” Latino drivers are particularly unlikely to be aware of the stipend — half of those surveyed either don’t recall receiving a notification about it or aren’t sure.

The report finds that 16 percent of respondents are going without health insurance, double the national uninsurance rate. One driver told the report’s authors that while he lacks insurance, he has gone to a hospital emergency room twice in the past year to receive medical care.

Another 29 percent of respondents rely on Medi-Cal, the public health care option primarily reserved for people below 138 percent of the poverty line.

“I thought I’d get free insurance,” one driver told the authors in explaining why, though he did not vote for Prop 22, he supported it. He relies on Medi-Cal to cover expenses, such as when his son had a medical emergency. “I’m worried about me. I’m almost fifty and I don’t know what’s going to happen if I just keep driving for Uber and Lyft,” he said.

Another driver who does not log enough hours to receive the health care stipend told the authors that because he lives in Tecate, near the Mexican border, he crosses into Mexico to receive health care.

These findings are congruent with a previous study — conducted by Tulchin Research and commissioned by SEIU — showing that drivers are “receiving little information” about the benefits, with many drivers entirely unaware of the benefits.

“Rather than rectifying the problems app-based drivers face, Prop 22 has intensified drivers’ vulnerability to health and safety risks as well as feelings of confusion and disillusionment,” concludes the report. As to how to fix the problem, in the short term, the authors recommend removing restrictions on the health care stipend. “The stipend should cover 100 percent of the average monthly premium for a Covered California Bronze plan. Drivers’ total work time, rather than engaged work time, should be counted when calculating stipend qualification,” they write.

In the longer term, the authors advocate repealing Prop 22 — RDU has opposed the legislation from the start, one of many worker organizations that immediately saw it for what it was: an anti-union, anti-worker bill that locks in the particularly precarious app-based drivers as second-class citizens. While it’s possible that Prop 22 will be undone through the courts, the report notes that legislators in other states will need to prevent the passage of Prop 22 clones, such as the one currently being pushed in Massachusetts.

At the federal level, the report calls for passing the PRO Act, a labor-law reform bill which would go a long way toward correctly classifying app-based drivers as workers rather than independent contractors, in addition to strengthening workers’ rights across sectors. Further, there is the matter of single-payer health insurance, which would do away with workers’ dependence on an employer for health insurance.

Prop 22 may be destined to be struck down, its authors having gotten too greedy in pushing a bill designed to prop up the gig economy model of employment, but for now, thousands of people are still working under its regime, locked out of the basic standards that are their right. This new study adds evidence to what workers who opposed the ballot measure have argued all along: Prop 22 was all about saving employers money and liability. Any legislation penned by gig economy executives and their ilk always will be.