by Martin Bennett on September 30, 2024 (BeyondChron.org)
App-based gig work companies like Uber, Lyft, DoorDash and Instacart employ 1.4 million California workers. The companies portray these jobs glowingly: a “side hustle” to supplement 9-to-5 jobs, offering living wages, autonomy and flexible hours. The reality is quite different.
App-based transportation and food delivery jobs pay less than the California minimum wage and lack benefits such as employer-provided health care. Because these workers are classified as independent contractors, they are not covered by state minimum wage and overtime protections, nor are they eligible for state unemployment and workmen’s compensation benefits. Most drivers and delivery workers are employed full-time or must piece together multiple part-time and temporary jobs to pay the bills.
In short, app-based gig work is precarious employment. These workers are now organizing for better pay, improved working conditions and the right to join a union.
A new report by researchers at the UC Berkeley Labor Center collected data from 1,100 ride-hailing drivers and food delivery workers in San Francisco, Los Angeles, Boston, Chicago and Seattle. They found that California app drivers earn a median wage of $5.79 an hour without tips and $7.63 with tips. Delivery workers’ pay was even less at $4.98 without tips and $11.43 with tips — well below the California minimum wage of $16 an hour.
The calculations are for net median hourly wages after tax deductions and mandated Medicare and Social Security contributions. Drivers are also responsible for vehicle costs, including gas, maintenance, repairs and insurance, and smartphone costs. These expenses eat up half of gross earnings. Furthermore, drivers aren’t compensated for their time driving back to transportation hubs where they pick up passengers.
Uber and Lyft claim many drivers are making only a few paid trips with their family car each week, so their added costs are minimal. The labor center report demonstrates that most trips are made by drivers working 20 or more hours a week and driving 10,000 to 20,000 miles annually for app companies. Full-time drivers (32 hours a week) account for nearly half of passenger trips.
In 2018, UCLA Labor Center researchers interviewed hundreds of ride-hailing drivers in Los Angeles County. They concluded that almost half of the workers interviewed drive full time, more than half reported app-based driving as their only source of income, two-thirds drive to support themselves and their families, and one third support a family with at least one child.
According to a 2023 United Ways report, more than one-third of California households are working poor, with at least one-member reporting income from work but not earning sufficient income to pay for basic expenses. Most ride-hailing drivers are members of these low-income families who cannot make ends meet.
Consequently, ride-hailing drivers have formed advocacy organizations to take legal action and lobby for legislation to improve their pay and working conditions.
In 2023, the New York Taxi Workers Alliance won a $328 million lawsuit settlement, including payment of driver wage theft claims, a minimum wage of $27.86 an hour and accrual of nine days paid sick leave. Uber and Lyft also agreed to pay into the state’s unemployment insurance program, enabling drivers to access unemployment benefits.
In 2024, the Minnesota Uber/Lyft Drivers Association (MULDA) successfully lobbied the legislature and Governor for a $34.58 an-hour minimum wage before expenses, expanded insurance requirements for ride-hailing companies covering injuries to drivers and passengers, and funding for MULDA to operate a nonprofit driver’s center to provide labor rights education and services to drivers.
In California, the state Supreme Court recently upheld Proposition 22, a 2020 ballot initiative that classified drivers as independent contractors, though the court found a provision that barred unionization unconstitutional.
This November, Massachusetts voters will consider a ballot initiative permitting ride-hailing drivers to unionize, which could open the door to unionization in other states. Thirty thousand California drivers have already formed the California Gig Workers Union, an advocacy organization backed by the Service Employees International Union.
Ultimately, only through collective bargaining can app-based drivers win family-supporting wages and comprehensive benefits and systematically address worker exploitation by ride-hailing gig companies. If Massachusetts app drivers unionize, California will undoubtedly follow.
Martin J. Bennett is instructor emeritus at Santa Rosa Junior College and a consultant for UNITE HERE Local 2.
