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‘A slap in the face’: California Uber and Lyft drivers criticize pay cuts under Prop 22

Uber and Lyft drivers in California are up in arms about the effects of Proposition 22 since the controversial state law went into effect in January, after an aggressive and expensive lobbying campaign in favor of the ballot amendment.

Among the most recent changes, drivers say, is a reduction in mileage rates from Los Angeles international airport, an important source of income and rides for many drivers.

Alvaro Bolainez, a driver for Uber and Lyft in the Los Angeles area, said the airport mileage rate for Uber was reduced from 65 cents a mile to 32 cents a mile, and that Uber removed the multiplier option for drivers to set their own prices for rides.

“No driver in their right mind will go to LAX for 32 cents per mile,” said Bolainez. “They took everything away, the ability to see what passenger we’re getting and the ability to set our own prices, the multiplier.”

Prop 22 was authored by Uber, Lyft, DoorDash and Instacart, and carved out an exception from assembly bill 5 (AB 5), a landmark labor law in California that would have forced ride-share and delivery companies to treat drivers as employees. Under prop 22, workers at gig companies are still classified as contractors, without access to employee rights such as minimum wage, unemployment benefits, health insurance and collective bargaining.

An Uber spokesperson said the airport changes and rebalancing rates are part of a pilot program to improve airport pickups for riders and drivers.

The multiplier option was provided to drivers by Uber in January last year in an attempt to prove drivers are independent contractors by granting them more flexibility as Uber and other gig companies were fighting to exempt their workers from AB 5. Uber argued the reversal was due to drivers turning down too many rides.

Though the multiplier option and features for drivers to turn down unwanted rides has largely been revoked, Bolainez argued passenger fees were increased by Uber and Lyft despite claims from app companies ahead of Prop 22 that such fees wouldn’t be increased, and that drivers aren’t being fairly paid proportions of fee increases. He claimed Lyft has implemented similar fee structures, charging customers prime-time surge fees while paying drivers small proportions of those additional fees.

“It’s not fair that they get 60-70% of the fare when we do everything. We risk our life, we pay for insurance, we pay for the car and maintenance, we pay for everything,” added Bolainez.

Drivers have also criticized the implementation of healthcare benefits provided to gig workers in the wake of Prop 22. A survey of over than 500 drivers in California conducted by Tulchin Research found 86% of gig workers were ineligible for the healthcare subsidies due to their type of insurance coverage.

In April, Uber and Lyft announced what they refer to as a stimulus package for existing drivers and to lure new drivers onto the road amid current driver shortages around the US. The new incentives are targeted to reduce wait times for passengers amid increasing demand for rides as coronavirus cases in many parts of the US have significantly declined and about half the US population has received at least one Covid vaccine dose.

“These stimulus packages are traps. Many workers have stopped driving for Uber and Lyft because the pay is so low and the risk is so high,” said Veena Dubal, professor of law at the University of California, Hastings. “Seven years ago, when these companies first started, they lured workers into purchasing cars and working for them with similar incentives. Then, they dropped wages lower and lower, until workers were losing money after considering their expenses. But many vulnerable and marginalized workers couldn’t leave their jobs. These so-called stimulus packages are just another iteration of this pattern–lure workers in, trap them, and then lower wages.”

Uber said $250m will be offered to drivers for sign-up bonuses and other incentives. Lyft is offering return bonuses, other incentives, and offering to cover rental car costs. Both companies posted multibillion-dollar losses in 2020, as Uber and Lyft have yet to turn a profit and both apps have trouble retaining drivers.

“Basically what the stimulus package is, it’s a bait and switch. It’s an opportunity to offer us higher rates for a very limited time to get us back on the road, and to hire new drivers to bait them,” said Daniel Russell, adriver for four years in the Los Angeles and a leader with Rideshare Drivers United, which is circulating a petition to demand Uber and Lyft fulfill their Prop 22 promises.”

He argued the bonuses are an attempt to flood the market with more drivers to reduce wait times, and once revoked will hurt full-time drivers without remedying many of the long sustaining issues drivers have faced while working for the apps.

Jeff Hill, a part-time Uber and Lyft driver in San Diego, said drivers are still experiencing issues with coronavirus safety protections such as the fear of retaliation for turning down passengers who refuse to wear masks.

“They’re not taking care of the core issues and their core drivers. Uber and Lyft spent $200m to keep us independent contractors without giving us any independence and now they’re spending millions to get more drivers out on the street. It’s a slap in the face,” said Hill.

A spokesperson for Uber said the stimulus bonuses will be in place for the next several months as more people use Uber, and drivers in California are guaranteed 120% of local minimum wage based on engaged time, when they are transporting passengers.

They added in an email: “Last year, Uber made a series of changes to our app in California, including letting drivers set their own price as well as removing upfront fares for riders. While these changes gave drivers more freedom than any other ride-share app provides, they also led to a third of drivers declining more than 80% of trip requests, making Uber very unreliable in the state. As the recovery from the pandemic picks up steam, we want to make sure riders can get a ride when they need one, and all drivers get more trips on a regular basis. To that end, we’re beginning to roll back some of the changes.”

Lyft deferred comment to statements made during their latest earnings call, where Lyft executives claim the driver shortage and increased demand have led to record earnings for drivers in most US cities.

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