After a record amount of debate on just about every aspect of the issue, California voters passed Prop 22 with approximately 60% majority this past November. And with the votes officially counted, it is time to pivot the conversation to what new policies gig economy workers and consumers can expect moving forward.
Prop 22 is the legislation that has been strongly backed by app-based companies like Uber, Lyft, DoorDash, and Instacart. The law will allow them to continue to classify their workers are independent contractors, thus limiting their obligations from an employment standpoint.
However, those corporations will now be required to provide some basic safeguards for those independent contractors, which could ultimately lead to consumers seeing price increases.
Guaranteed Minimum Wages
One of the biggest requirements that Prop 22 is placing on app-based corporations is a requirement that every independent contractor be compensated at a rate of at least 120% of the state’s minimum wage.
While most app-based workers make significantly more than this, it will provide them with a floor in the event of bad shifts or timing, but the corporations will certainly argue that it opens them up for lazy contractors to take advantage of them.
Gig economy drivers will also start receiving 30 cents for every booked mile they rack up in their vehicles.
With many drivers logging hundreds of miles every shift, this could add a significant financial burden to the larger corporations, but will also ensure that drivers are properly compensated for the wear and tear they are putting on their vehicles.
Occupational Accident Insurance
Corporations like Uber and Lyft will also be forced to provide occupational accident insurance for any of their independent contractors that are injured on the job in any way. This will make sure that anyone who is injured while working receives the proper medical attention they deserve.
Of course, this will be another added expense that all of the app-based corporations will have to contend with, but it is also an expense that any business with actual employees already understands and prices into their product.
Health Insurance Subsidies
Prop 22 will also make any gig economy workers who log at least 15 hours per week eligible to receive health insurance subsidies, which will make it easier for all of them to afford health insurance plans.
While all of these new requirements sound like improvement in the working conditions for app-based contractors, there is also no denying that someone is going to have to foot the bill for each of these new benefits.
With large corporations like Uber, Lyft, DoorDash, and InstaCart staring down the barrel of increasing costs associated with their labor force, there is almost no doubt that those increased costs will eventually make their way into price increases for the end consumers.
However, if you the price to guarantee a minimum wage and health insurance subsidies for some of the hardest working people in California, there is no reason to think that anyone will mind paying a little extra for a quick ride or food delivery.