Who Really Benefits From California Prop 22?

Uber? Drivers? Customers?

Actually in my opinion, especially living in Southern California, no one does.

There was lots of great television ads, with lots of great gig spokespeople (or actors, I’m not sure) who made a strong and heartfelt case that we should vote for Prop 22 so that these people could have a second job, and afford housing and food for their own families.

The fact is that Prop 22 went on the ballot to see if the companies like Uber, Instacart, Door Dash and others would have to reclassify their workers as employees instead of independent contractors; that currently are not paid the minimum wage or overtime, workmens comp insurance, unemployment, healthcare and the other benefits many employees receive. And the world was watching for the outcome especially as has been reported that $200 million was spent by Uber, Lyft, Instacart, DoorDash and Postmates to keep their workers classified as independent contractors.

The impact on these delivery and ride share companies would have been  huge – and since most of them aren’t making any money as is, would surely have forced up prices for consumers, been a landslide of taxes for the state, federal government, social security and medicare; and for some companies may have actually put them out of business.

But, in my opinion, which ever side of the ballot and labor standards you were on, the real problem is not being addressed. According to the personal conversations I have had with hundreds of these workers is that there are just too many of them now. Those that might have started a few years ago found the jobs profitable and enjoyable – but now they barely get enough rides or orders to the supermarket to make it worthwhile. Many, especially Uber drivers, have told me they can barely make their car payments, insurance and gas money with the few trips they get.

The TV commercials were geared to show us the plight of those workers who just want to pick up a couple hours of work a day – or a week for some extra money; they didn’t talk about those who are depending on these jobs for their livelihood.

On a recent order through Instacart my shopper was working three baskets at once – for 3 different customers so he could get in as much money as he could. I know this as he was honest enough to tell me when I texted and asked why it seemed as if he actually stopped shopping my order. A survey by The Washington Post estimated the average Instacart worker made just $7.15 per hour in 2019. Obviously since the pandemic they have made more, but more people are also looking for work driving up the competition for these jobs. Berkeley researchers also estimate that Prop. 22’s wage guarantee only amounts to $5.64 per hour when you consider unpaid wait times and workers’ personal overhead expenses, such as gas. Consumers who want to use these services must pay the real cost of service – not a cost that is offset by IPO or VC funds that are keeping their fingers crossed that one day the business will show a profit.

Until we take a truthful hard look at this new type of workforce and differentiate between those who want a couple hours work vs. a full time job we will continue to see these types of propositions spread throughout the country.