Uber & Lyft Drivers Are Making $6.20 an Hour Under New California Law
A California law designed to improve working conditions for rideshare drivers while also keeping fees down might have done the latter without doing the former, according to a new study from PolicyLink. Among other things, the study found that local Uber and Lyft drivers make a median net wage of $6.20 an hour — well below California’s minimum wage of $15 an hour.
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The study, released on Sept. 21, was the result of a collaboration between PolicyLink — a progressive research and advocacy organization — and Rideshare Drivers United, a California driver advocacy group. Much of the research was done by PolicyLink partner National Equity Atlas, which published the results on its website.
The law in question is Proposition 22, which was approved by voters in 2020. According to National Equity Atlas, Prop 22 allowed rideshare companies such as Uber and Lyft to legally classify their drivers as independent contractors not subject to basic employment protections. This was the case even though drivers cannot set their own fares, or other working conditions traditionally part of independent contractors’ rights.
“In effect, Prop 22 rewrote labor law for California’s entire app-based transportation and delivery workforce,” National Equity Atlas wrote.
To better understand the impact of Prop 22 on driver compensation, National Equity Atlas partnered with Rideshare Drivers United — and 55 rideshare drivers in California’s major rideshare markets — to collect and analyze driver data late last year, using the Driver’s Seat Cooperative mobile app.
The partnership assessed how compensation under Prop 22 compares with what compensation would be if the drivers were classified as employees. It also conducted interviews with a subset of drivers to better understand their working conditions under Prop 22, the challenges they face because of the pay and benefits structure — and the extent to which they feel they have control over their work.
Among the study’s key findings:
Drivers’ median net take-home earnings, which take out business costs such as vehicle wear and tear, are $6.20 per hour under Prop 22. Drivers who pay for health insurance out of pocket earn nearly half of that.
The wage floor under Prop 22 is $4.10 per hour.
Drivers would earn nearly $11 more per hour if they were classified as employees.
Rideshare work has become less flexible and more controlled by rideshare companies under Prop 22.
Those results won’t come as a surprise to rideshare drivers. Vitali Konstantinov, who started driving for rideshare companies in the San Diego area in 2018 and is a member of Rideshare Drivers United, told Wired that driving “has only gotten more difficult” since Proposition 22 passed.
“Although we are called independent contractors, we have no ability to negotiate our contracts, and the companies can change our terms at any time,” Konstantinov said. “We need labor rights extended to app-deployed workers.”
In response, Uber spokesperson Zahid Arab wrote in a statement that the study was “deeply flawed,” adding that his company’s internal data shows that tens of thousands of California drivers earned $30 per hour on the dates studied by the research team. However, Uber’s figure does not account for driver expenses.
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Per Wired, Lyft spokesperson Shadawn Reddick-Smith called the report “untethered to the experience of drivers in California.”
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