Well, it's official!!! Prop 22 has passed. Just after 11 p.m. the race was called with 58 percent of voters voting "Yes on 22" while only 42 percent voted "No on 22." Ride hailing companies and deliver companies have now become except from California employment law and will continue to classify their drivers as independent contractors.
The people of California have spoken, and the passing of Prop 22 may have been a blow to the labor unions such as Teamsters, but that's fine with most as many feel that labor unions have had a power surge agenda of their own all along. That power surge has now been halted. The state of California may be disappointed with the outcome, but Doordash, Uber, Postmates, Instacart, Lyft and the vast majority of drivers that work for these companies are undoubtedly very pleased with the passing of Prop 22.
What does this Prop 22 victory mean for gig drivers?
With prop 22 being victorious, Doordash, Uber, Postmates, Instacart, Lyft and all other gig driven companies are going to be allowed to continue to classify their drivers as independent contractors. For drivers, this means that their pay will be at least 120% of minimum wage for engaged time. Engaged time means from the time they accept a call until the time they deliver it. Drivers will also receive 30 cents per mile for engaged time. We will talk more about engaged time in a minute.
Other benefits that drivers will now have include healthcare subsidies. Those that average 15 to 25 hours per week during any quarter from the year will receive healthcare subsidies equal to 41 percent the average California covered premium for each month. Those that average 25 hours per week or more will be entitled to 82 percent the average California covered premium for each month.
Drivers will also now have insurance protection while on duty. Occupational accident insurance will now be provided to cover at minimum 1 million dollars in medical expenses or lost income for an injury that may happen while the driver is on duty and not engaged in personal activities. It does not matter if the driver is on a call or not. This same occupational accident insurance will also cover any disability payments and will cover 66 percent of a driver's average weekly earnings for about 2 years.
Gig drivers will also have accidental death insurance while they are using the app. Death benefits may be available to a driver's spouse, children or other dependents. All in all, this Prop 22 win is good for all app based drivers. The flexibility, which has always been the main concern of most drivers remains, and we now get all of the aforementioned perks to go along with it.
What does Prop 22 mean when it talks about engaged time?
With the prop 22 win, gig drivers will now be earning at least 120 percent of minimum wage for engaged time. This means that drivers are only guaranteed these earnings while they are in active work mode. This means from the time the driver receives a call until the driver marks the call as completed.
If a driver sits around for an hour and does not receive a call, he or she will not get paid anything for that hour. They will not earn the minimum earnings during that time. This is something that a lot of "No on 22" supporters did not like. They wanted to get paid by the hour no matter what.
Many of them liked to use the example of the cashier that gets their whole hourly wage whether they are checking out customers or not. Their point being that the cashier does not only get paid while checking out the customers. Surely, anybody could see the point they were trying to make, but anybody with any common sense has to understand that the app based gig economy is a whole different ball game. Things just wouldn't work that way for gig drivers.
In all honesty, 99 percent of the time nobody is sitting around anyways. There are always calls out there to keep us drivers busy and making money. Why would we want it to work any other way? Who wants to be sitting around? I'd rather be out there hustling and making as much money as possible. Remember, just because Prop 22 guarantees drivers that they will earn at least 120 percent of minimum wage during active time doesn't mean that drivers are stuck with that. No way! Drivers that hustle can and will continue to earn way more than that.
With that said, it's nice to know that the 120 percent of minimum wage guarantee is nice just in case things get pretty slow or we are offered calls that don't pay as much as we'd like. For example, during an hours active time of work, if a driver accepts a $5 call and it takes him a half hour to complete and then right after that accepts a $6 call that also takes him a half hour, it will have taken him a total of one hour to complete these two deliveries. He will have normally earned $11. Now, with the new guarantee, he will earn more than that.
With California minimum wage at $13 per hour, a driver that works an entire hour is guaranteed $15.60 per hour. We get this figure as $15.60 is what you come out with when you figure out what 120 percent of $13 per hour (minimum wage) is. So the driver will earn $4.60 more for the hour than what they would have normally earned. Yes, $15.60 instead of $11. Remember, California minimum wage is going up to $14 per hour in 2021 and then will hit $15 per hour in 2022 so things will even get better.
One has to think if a set up like this will improve customer satisfaction. The reason for this is that drivers may be willing to accept lower paying calls now that they have a minimum guarantee. As long as Doordash is giving them calls and keeping them going, a lot of drivers will be fine knowing that they will earn at least $15.60 per hour. Of course, the real hustlers and bustlers out there wont be happy with that, but in all honesty a lot of drivers will be.
For example, if Doordash gives a drivers two orders during the hour that each pay $3, and the driver takes an hour to complete them, he may be willing to do it since he will get $15.60 as his pay for the hour instead of only $6. In his mind it may be better than sitting around getting paid nothing. This will especially be true if things are slow. Only time will tell, but I'm thinking that this set up may really improve customer satisfaction as the cheap non-tippers may be getting their food a bit faster now.
I almost forgot to add in the mileage reimbursement. The driver that earned $15.60 for the hour for being active will also be entitled to 30 cents per mile. If the two calls had the driver on the road for 8 miles, that would be an extra $2.40 for the hour which makes the drivers total earnings for the hour at $18.00. If the customers tip anything it will be even more. If an individual does not see the Prop 22 victory as a major improvement; I'm going to stop there!
Confusion on social media over Proposition 22
Since the prop 22 victory has happened, I've read some of the comments on social media, and it still amazes me how some people still just don't understand what has happened here. With the Prop 22 passing, gig drivers will remain independent contractors as they have always been. That means that they will still have the freedom to work when and where they want, but there are now added benefits.
Some of the idiotic comments I've seen on social media include comments such as "Oh no, Prop 22 passed now we will all have to be employees" or "Well, that does it, now they have us as employees." These people's lives must be completely backwards because for some reason in their head they cannot understand that by Prop 22 winning, that means that Doordash, Uber, Lyft and all of the other apps have won.
That means that drivers that want to remain independent contractors have won. The only people that lost here are those that want Doordash to treat them like an employee. These people wanted to be employees, but it's not going to happen. Them, along with the state of California have lost!
Another comment that annoyed me was an individual that posted "Oh no, now the app companies have control of everything and will increase the amount of $3 calls." My initial thought was "Are you serious?" I have no idea where people come up with crap like this!! People like this that want to take life as easy as possible and earn what you need to in order to just get by can now take advantage of the Doordash 120 percent guarantee pay. It's a win-win, and there is nothing to complain about.
Prop 22 was money well spent for the app based gig companies
Proposition 22 was the costliest measure is California's history. Uber, Doordash, Lyft, Instacart and Postmates invested more than 200 million dollars in their campaign for Prop 22. The companies fought back against California for trying to bully them into making their drivers employees. The money spent was well worth it as it helped Prop 22 become victorious and satisfied not only the app based gig companies, but also most app based drivers. It would have been devastating to many drivers if Prop 22 didn't pass.
Some may say that the only reason Prop 22 passed was because these companies had so much money to promote their campaign. It's true, they did spend a lot of money, but that was a great thing. They actually had the financial means to fight back against the state of California and those that opposed them. Something that a lot of companies, organizations or individuals do not have.
Most of us would have had to roll over and unwillingly abide. Usually, those that oppose California will have to bow down, but the gig companies were able to come together, flex their financial muscles and it all worked out great.
My message to the "No on 22" gig driver supporters
For gig drivers that were "No on 22" supporters and have lost, I have just a few things to say to you. You have not really lost anything. The type of job that you are looking for is still out there. You want a job that classifies you as an employee and gives you all the benefits that an employee is entitled to right? Well, I'll be glad to tell you that Dominoes Pizza, and a lot of other pizza companies are hiring drivers.
Don't like delivering pizza? It's okay. There's lots of other types of restaurants that need drivers. Don't like food delivery? Well, there's other delivery jobs that delivery other things besides food and the best part yet as that they will classify you as an employee. Just what you want!
If Prop 22 would not have passed, lots of gig economy drivers would have lost their jobs due to losing the flexibility that comes with being an independent contractor. Besides that, all the gig companies would not have been able to hire all their independent contractors as employees, so maybe about 80 percent of drivers would have been dropped anyways even if they wanted to continue as an employee.
These jobs are a side hustle for most, and we would have had no where else to turn to for the extra side hustle money. Again, you "No on 22" supporters still have someplace to turn to even with the loss; so you should count your blessings and be appreciative that you can still go out and get that employee job that you want so badly.
The only drawback to the Prop 22 victory
Part of the ballot is that all app based gig companies will now have to limit the amount of hours that their drivers can work. For most people, this limit will not matter much as most don't work over 12 hours per day. For the very few that do, there will be a 12 hour work limit, and then they will not be able to log on until they take 6 hours straight off of the app.
As I've said, most people will never have to worry about this. I know that when I used to work Uber Eats a lot, they always had this implemented. I was out there hustling almost all day with all of the apps with Uber Eats being my main app at the time, and I was only forced off a couple of times.
To end this article, I will say that I was always 99 percent confident that Prop 22 would pass. Nothing is ever certain in life so there was always that one percent. With that said, I'm sure glad it's over now and that nobody has to worry about it anymore.
When you think about all of this, it's a good thing that the whole thing happened. By the state challenging the gig economy app based companies, they have lost, but they forced Doordash, Uber, etc. to give us all of the added benefits that I've talked about in this article and that we are now entitled to. They basically forced these app based companies to sweeten the deal for us, and we should all be happy about that.
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