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Uber Technologies Inc. reportedly raised its prices for customers in California recently, and DoorDash Inc. will soon follow. The added fees are destined to fund new driver perks the companies promised if Prop. 22 passed, which it did in November’s election.
The ridesharing company said the cost to customers will vary depending on the city and type of service. For example, each food delivery bill in Los Angeles increased by 99 cents, the surcharge for rides is 75 cents. In San Francisco, it’s an additional $2 for food delivery and 30 cents for rides. Prices go as high as $1.50 in less populated areas in the state.
Other gig economy companies that promised to begin offering workers a health care subsidy and other perks if Prop. 22 passed were less forthcoming about how they would pay for the effort. DoorDash, the largest food delivery provider in the country and big contributor to the Yes on 22 campaign, said it will make “slight percentage increases” to service fees on some customers’ orders. Spokespeople for Instacart Inc. and Lyft Inc. told Bloomberg they haven’t raised prices but declined to specify whether that would change in the future.
One Lyft driver and labor organizer told Bloomberg that voters were duped into supporting Prop. 22, which ended up costing them more without securing adequate working conditions for drivers: “[Gig companies have] written their own labor law, and through deceptive advertising, they were able to get the electorate to approve it. Now, both drivers and consumers are paying the price.”
The gig economy companies spent more than $200 million to ensure the passage of Prop 22, making it the most expensive ballot measure in California history. It overturned AB5, which was designed to reclassify gig economy workers as employees with benefits, at a substantial cost to the companies, and the companies were supposed to abide by it at the start of 2020. Instead, Uber and Lyft had threatened to temporarily shut down statewide and reconsider offering service in less populous locales if the measure failed.
Prop 22 creates a new, limited set of benefits, such as mileage reimbursement, occupational insurance, minimum earnings while conducting a gig, and the health stipend for those who work at least 15 hours a week.
Incentivized by the measure’s success, executives at Lyft and Uber have said the initiative in California could serve as a blueprint for labor battles across the country. Last month, the companies started a national advocacy group, App-Based Work Alliance, which is expected to take a lead role next year as Illinois, Massachusetts, New York and Washington examine employment rights.