An Uber shareholder is demanding more transparency about the impact of the company’s lobbying efforts

Dara Khosrowshahi
  • The Teamsters General Fund, an Uber investor, wants the company to reveal more about its lobbying.
  • The fund urged Uber shareholders to vote for its proposal requiring an annual report from Uber.
  • It said Uber’s “highly innovative” but “controversial” lobbying could hurt its brand and business.
  • See more stories on Insider’s business page.

The International Brotherhood of Teamsters General Fund, an investor in Uber, sent a letter to other Uber shareholders Thursday urging them to vote for a proposal that would force the company to disclose more details each year about its lobbying efforts.

“Uber’s lobbying is not only substantial, geographically extensive and highly innovative, but is profoundly controversial and raises critical questions over the sustainability of the company’s business model,” Ken Hall, the fund’s general secretary-treasurer, wrote in the letter.

“It may be tempting to view Uber’s current disclosures as a good-faith effort to address concerns over the transparency of its lobbying activities; but this would be a mistake,” Hall added.

Uber investors will vote on the proposal – which would require Uber to publish an annual report disclosing its lobbying policies, how much it spent on direct, indirect, and grassroots lobbying, and which groups the money went to – during the company’s annual shareholder meeting on May 11.

Uber has urged investors to vote against the proposal, citing its “existing risk management practices and current high level of transparency and accountability around political and lobbying activities and expenditures.”

The ride-hailing company did not respond to a request for comment on this story.

Uber and other companies that depend heavily on cheap contract labor have ramped up their lobbying efforts over the past few years as federal and state regulators look to crack down on “gig” economy businesses that have for years operated in a regulatory gray area.

Uber spent a record $2.6 million lobbying the federal government in 2020, according to OpenSecrets. The company also contributed $30 million to a $200 million campaign to persuade California voters to pass Proposition 22, exempting it from a major state labor law, AB-5, and making Prop 22 the most heavily lobbied ballot measure in the state’s history.

A key aspect of that campaign was Uber’s indirect and “grassroots” lobbying through groups that helped the company broadcast its message to voters without telling them who the messenger was. In one case, an Uber-funded group sent mailers to California residents designed to trick them into believing progressive groups were supportive of Prop 22 (many prominent progressives actually opposed the measure).

In December, the Teamsters Union filed shareholder proposals at both Uber and Lyft, arguing both companies have failed to provide investors with sufficient information about the money they spend on lobbying – particularly grassroots lobbying, which is subject to less stringent disclosure requirements and often requires investors to dig through complicated and incomplete disclosures for each individual state.

The fund argued in its letter Thursday that Uber investors should push for more transparency so they can understand how much the company’s business model depends on its lobbying efforts being successful, and whether its reputation could suffer because of the positions it’s taking.

“Transparency is vital to understanding how Uber is navigating the acute reputational risks that come with lobbying around matters as emotive as wage theft and workers’ rights,” it wrote, adding: “But perhaps most crucially, disclosure is key to any evaluation of the long-term sustainability of a business model built around the heavy and controversial use of independent contractors.”

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Uber is spending $250 million to persuade drivers to get back on the road so it can pay them less again

uber driver prop 22
Rideshare driver Teresa Mercado raises her fist in support as app based gig workers held a driving demonstration with 60-70 vehicles blocking Spring Street in front of Los Angeles City Hall urging voters to vote no on Proposition 22 on Oct. 8, 2020.

Uber announced Wednesday it plans to spend an additional $250 million on “boosted incentives and guarantees” to persuade drivers to get back on the road amid a shortage during the COVID-19 pandemic.

“In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time. In 2021, there are more riders requesting trips than there are drivers available to give them-making it a great time to be a driver,” Dennis Cinelli, the head of Uber’s US and Canada ride-hailing business, said in a blog post.

But Uber also warned the increased pay won’t last forever.

“We want drivers to take advantage of higher earnings now because this is likely a temporary situation. As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels,” Cinelli said.

Uber claimed in the blog post drivers in Philadelphia, Chicago, Austin, Miami, and Phoenix are currently earning pre-tip median incomes between roughly $26 and $31 per hour.

Uber has been notoriously reluctant to share driver pay data, and some independent researchers have found drivers may earn as little as $9.73 per hour after acounting for expenses.

But during the pandemic, many ride-hailing and food delivery drivers have seen their pay dramatically increase, due to the way Uber’s business model works.

Uber’s ability to provide on-demand rides at low prices depends on having lots of drivers active when passengers are looking for a ride. If only one driver is competing for a passenger, that driver can refuse the job until Uber’s algorithm jacks up the pay – which is esssentially what some DoorDash drivers are doing to boost their pay for food-delivery gigs.

If 100 drivers are competing for that same job, Uber can offer much lower pay and one of them will still probably do it, and therefore Uber can charge the consumer less and still make more money itself.

But the pandemic caused a massive drop in the demand for rides, and has kept many drivers – who are especially concerned about getting sick because Uber doesn’t provide healthcare or sick pay – off the road, even as rider demand returns.

That’s a bad situation for Uber, which doesn’t want riders returning to the app only to find no drivers are online and that they’re waiting 20 minutes for a ride and still paying surge pricing.

So, Uber is effectively bribing drivers to get back on the platform until there’s enough competing for those returning passengers that Uber can start whittling down driver pay again.

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Uber gave drivers more control to prove they’re independent. Now the company is taking back control because drivers actually used it.

GettyImages 1176816141 (1) NEW YORK, NEW YORK - SEPTEMBER 24: Dara Khosrowshahi, CEO, UBER, speaks onstage during the 2019 Concordia Annual Summit - Day 2 at Grand Hyatt New York on September 24, 2019 in New York City. (Photo by Riccardo Savi/Getty Images for Concordia Summit)
Uber CEO Dara Khosrowshahi.

  • Uber is revoking California drivers’ ability to set prices and see trip destinations in advance, the San Francisco Chronicle reported.
  • Uber gave drivers more control in 2020 to avoid reclassifying drivers as employees under AB-5.
  • But it reversed course after Prop 22 exempted it from AB-5, saying drivers turned down too many rides.
  • See more stories on Insider’s business page.

In late 2019, California lawmakers passed AB-5, hoping to make it harder for companies like Uber to skirt labor laws and offload healthcare and unemployment insurance costs to taxpayers by misclassifying workers as contractors.

But Uber refused to comply, arguing that AB-5 didn’t apply to its drivers because they aren’t core to its business and that drivers really are independent because they’re “free from the control and direction” of Uber.

In an attempt to prove its independence argument, in January 2020, Uber gave California drivers more control by allowing them to set their own prices for rides and see passengers’ destinations before picking them up.

Regulators and courts didn’t buy it. But fortunately for Uber, a $200 million PR campaign around Proposition 22 successfully persuaded California voters to exempt it from AB-5, saving the company as much as $500 million per year, according to a 2019 estimate by Barclays analysts.

Now that Uber no longer needs to convince California authorities that its drivers are independent, the company plans to reclaim control, revoking the price-setting and passenger destination features it gave drivers barely a year ago, the San Francisco Chronicle reported Monday.

Uber’s reason for the reversal?

Too many drivers took advantage of the control Uber gave them, picking the most profitable rides while declining others, making it harder for customers to get rides and hurting Uber’s business, the company said. According to the Chronicle, one-third of drivers turned down 80% of rides.

Industry observers said the move is hardly surprising but it undermines Uber’s claim that the changes were ever about anything more than dodging regulation.

Uber did not respond to a request for comment on this story.

“It really shouldn’t be a shock to anyone,” Harry Campbell, who runs The Rideshare Guy, a popular blog among drivers, told Insider. “Since they passed Prop 22… there’s nothing holding them accountable for these changes.”

Campbell said that drivers likely won’t be happy given the popularity of the price-setting and passenger destination features, but added, “It’s kind of, unfortunately, a bit of a pattern that Uber specifically often gives drivers some things that they want and then ends up taking them away.”

“Is there a single Prop 22 promise that Uber hasn’t broken?’ Gig Workers Rising, which advocates on behalf of ride-hailing and food delivery drivers, tweeted in response to the Chronicle’s reporting, alluding to Uber’s history of misleading claims during its Prop 22 campaign.

But by revoking some driver-friendly features, Uber – which has yet to turn a profit – also revealed some of its post-pandemic priorities.

Companies like Uber and Lyft rely on flooding the market with drivers, who then face pressure to accept lower-paying rides and risk another driver getting the job or getting penalized themselves for turning down too many rides, even if those rides are unprofitable.

But during the pandemic, there has been a massive shortage of Uber and Lyft drivers, due to a drop in demand for rides and a concern among drivers about getting sick (the companies don’t provide healthcare or sick pay). And even as rider demand returns, many drivers are still staying home.

With fewer drivers on the road and Uber drivers able to freely reject unprofitable rides, they’re driving up their wages. That means higher prices and longer wait times for passengers, which Uber isn’t happy about.

“The companies, strangely, they care more about reliability than profitability at this moment in time,” Campbell said. “They want to make sure that the platform is working like everyone expects and if drivers are ignoring 80% of requests, that means that it literally is going to take longer for you to get matched with a driver.”

Campbell said Uber, Lyft, DoorDash, and other platforms are offering huge incentives to drivers – like a $250 bonus for completing 20 rides – as they struggle to get them back on the road.

As with past promises, those incentives and other driver-friendly features could just as easily disappear if the market becomes saturated with drivers again and companies regain the upper hand, but Campbell said that there needs to be a middle ground.

“If Uber is going to be able to get away with paying drivers like independent contractors, I think that’s kind of some of the control that they have to give up and find a way to make work.”

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Uber ordered to pay $1.1 million to blind passenger who was denied rides 14 separate times

GettyImages 577083258  DENVER, CO - JULY 18: Mike Hess, who is blind, get a ride from an Uber driver after his lunch meeting in Cherry Creek, July 18, 2016. Hess relies heavily on Uber to get around. (Photo by RJ Sangosti/The Denver Post via Getty Images)
A blind passenger gets into an Uber in Denver, Colorado (Lisa Irving not pictured).

An independent arbitrator on Thursday ordered Uber to pay $1.1 million to a blind passenger for illegally discriminating against her after its drivers refused her rides on 14 occasions.

The arbitrator also rejected Uber’s argument it wasn’t liable for discrimination by its drivers because they’re contractors.

Uber said it strongly disagreed with the ruling.

Lisa Irving, a San Francisco Bay Area resident who is blind and relies on her seeing-eye dog, Bernie, to help her get around, brought the claim against Uber in 2018 after “she was either denied a ride altogether or harassed by Uber drivers not wanting to transport her with her guide dog,” according to the arbitrator’s ruling.

Uber drivers left Irving stranded late at night, caused her to be late to work (which eventually contributed to her getting fired), and on two occasions, verbally abused and intimidated her – and that the discrimination didn’t stop even after she complained to Uber, her lawyers told Insider in a statement.

“Of all Americans who should be liberated by the rideshare revolution, the blind and visually impaired are among those who stand to benefit the most. However, the track record of major rideshare services has been spotty at best and openly discriminatory at worst,” Catherine Cabalo, one of Irving’s attorneys, said in the statement.

“The bottom line is that under the Americans with Disabilities Act, a guide dog should be able to go anywhere that a blind person can go,” Cabalo added.

“We are proud Uber’s technology has helped people who are blind locate and obtain rides. Drivers using the Uber app are expected to serve riders with service animals and comply with accessibility and other laws, and we regularly provide education to drivers on that responsibility. Our dedicated team looks into each complaint and takes appropriate action,” Uber spokesperson Andrew Hasbun told Insider in a statement.

But the arbitrator found Uber employees who investigated possible incidents of discrimination were “trained … to coach drivers to find non-discriminatory reasons for ride denials” and even to “‘advocate’ to keep drivers on the platform despite discrimination complaints.”

Under the Americans with Disabilities Act, it’s illegal for transportation businesses that are subject to the law to refuse to transport people with guide dogs, but Uber tried to shift the blame to its drivers, arguing it wasn’t responsible for any ADA violations because its drivers are independent contractors.

The arbitrator disagreed, ruling Uber was also liable for ADA violations because of its “contractual supervision over its drivers and for its failure to prevent discrimination by properly training its workers.”

However, classifying drivers as contractors is a strategy that has allowed Uber to avoid legal liability in other contexts, such as when a pedestrian alleged that she nearly lost her leg after being struck by an Uber.

The strategy has also allowed Uber to avoid paying drivers’ health insurance, sick pay, and unemployment insurance, shifting those costs to taxpayers – who paid $80 million last year to keep Uber and Lyft drivers afloat during the pandemic, making the companies one of the largest beneficiaries of a subsidy program aimed at small businesses.

Uber, Lyft, and other ride-hailing and food delivery companies have aggressively fought efforts in multiple states and countries to reclassify drivers as employees, which would add significant additional costs to their already unprofitable business models. Earlier this week, UK-based food delivery company Deliveroo’s initial public offering tanked by 30% after investors expressed concerned about how it had exploited its drivers.

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Court rules Uber and Lyft must face worker-misclassification lawsuit from Massachusetts’ attorney general

Uber Lyft

A Massachusetts state court on Thursday rejected requests by Uber and Lyft to dismiss a lawsuit accusing the companies of illegally misclassifying their drivers as independent contractors.

The lawsuit, brought by the Massachusetts state attorney general Maura Healey in July, alleged the companies have denied drivers benefits and workplace protections guaranteed to employees by instead classifying them as contractors.

Uber and Lyft then asked the court to toss the case, arguing the state hadn’t done enough to prove drivers were denied benefits and that there wasn’t a legitimate legal dispute over the issue. The court denied both companies’ requests, allowing the case to proceed.

Uber and Lyft did not respond to requests for comment on this story, while labor and driver groups praised the ruling.

“This court order is a complete rejection of Uber and Lyft’s position and a big win for working people,” Massachusetts AFL-CIO president Steve Tolman told Insider in a statement.

“Every worker should be able to earn a decent wage, take care of their health, and protect against harassment and discrimination on the job. We thank Attorney General Healey and her team for holding Uber and Lyft accountable for following the same rules that apply to every other company,” Tolman added.

The two ride-hailing giants have faced an increasing number of legal challenges in recent years over how they classify workers amid growing evidence many drivers are paid less than the minimum wage, and have struggled – particularly during the pandemic – without access to health care, labor protections, and unemployment benefits guaranteed by law to employees.

While companies are typically required to pay into state and federal programs benefiting their workers, Uber and Lyft have passed those costs on to taxpayers. A recent Washington Post analysis found more than 27,000 Uber and Lyft drivers received a combined $80 million from the US government to help them get through the pandemic.

The companies have argued drivers should be considered contractors because they’re able to choose when they can work and which rides they accept, claiming the companies are simply technology platforms that connect drivers and riders.

But a UK court recently rejected that argument, finding Uber and Lyft exercise significant control over drivers – much like a traditional employer – by setting their rates, assigning them rides, and using a rating system to determine their ability to get work on the platform. Uber responded by reclassifying its drivers as “workers,” a category under UK law between employment and contractor, in order to head off further legal disputes with drivers.

California regulators and courts also rejected the arguments put forth by Uber and Lyft, but the companies – along with a coalition of food-delivery companies including DoorDash and Instacart – avoided having to comply with those rulings by spending a combined $200 million to persuade voters to pass a law they wrote that keeps drivers as contractors.

The companies have also spent record amounts on lobbying as the worker classification issue takes the national stage.

The Biden administration’s proposed PRO Act, which wouldn’t automatically reclassify gig workers but would make it easier for them to unionize, has elevated the discussion around which rights and benefits rideshare and food-delivery workers should have – and who should bear those costs.

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A Pennsylvania prosecutor making $60 per hour got demoted because of his DoorDash side gig – where drivers make $17 per hour

GettyImages 1293837008 NEW YORK, NEW YORK - DECEMBER 30: A door-dash delivery driver waits near a restaurant on December 30, 2020 in New York City. The pandemic continues to burden restaurants and bars as businesses struggle to thrive with evolving government restrictions and social distancing plans which impact keeping businesses open yet challenge profitability. (Photo by NEW YORK, NEW YORK - DECEMBER 30: A door-dash delivery driver waits near a restaurant on December 30, 2020 in New York City. The pandemic continues to burden restaurants and bars as businesses struggle to thrive with evolving government restrictions and social distancing plans which impact keeping businesses open yet challenge profitability. (Photo by Alexi Rosenfeld/Getty Images))
  • A Pennsylvania prosecutor was demoted for delivering food for DoorDash during his work hours.
  • His boss called it “indefensible, thoughtless, selfish, and so stupid.”
  • The prosecutor, Gregg Shore, told KYW Radio that his reasons for working for DoorDash were personal.
  • See more stories on Insider’s business page.

District attorneys typically serve citizens by building legal cases against people accused of crimes, but one prosecutor in Bucks County, Pennsylvania, got demoted this week for serving residents food – as a DoorDash delivery driver.

Gregg Shore, who had been second-in-command at the Bucks County district attorney’s office, got caught driving for the food delivery service during hours he was supposed to be doing his job as a prosecutor, KYW Radio reported Thursday.

In 2019, Shore earned $125,435 – roughly $60 per hour – as first assistant district attorney, according to public records.

DoorDash CEO Tony Xu told The New York Times that delivery workers earned an average of just $17 per hour in 2018 – but the company doesn’t pay for the time workers spend waiting to claim orders, and some drivers say the base pay can be as little as $3 per hour.

Shore told KYW Radio that his reasons for working for DoorDash were personal and that he drove mostly at night.

“What he did was indefensible, thoughtless, selfish, and so stupid, it’s senseless,” Bucks County district attorney Matt Weintraub said in a press conference Thursday.

“I don’t know why he did this, only he has the answer, and I’ll admit to you that I’m very angry and I’m upset… this is the reason for his demotion,” he added.

Weintraub said Shore will be demoted to deputy district attorney, adding that while it would be “easier and politically expedient” to fire Shore, it “was not necessarily the right thing to do” given Shore’s otherwise positive track record.

Jennifer Schorn, who had been chief of the office’s trials and grand jury divisions, has been promoted to first assistant to fill Shore’s role, Weintraub said.

During the pandemic, the surge in demand for food delivery has been a boon for executives, early investors, and employees of companies like DoorDash, which opened at $182 per share – 78% above its asking price – during its IPO in December despite an unprofitable business model.

But delivery workers haven’t seen the same benefit, and have long complained about low pay, tough working conditions, and even wage theft – DoorDash paid $2.5 million to settle a lawsuit that accused the food delivery company of stealing drivers’ tips.

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Amazon will pay contract delivery drivers $8.2 million to settle a wage-theft lawsuit

Amazon delivery driver packages
  • Amazon has agreed to pay $8.2 million to settle a wage-theft lawsuit, Vice News reported Friday.
  • Contract delivery drivers alleged Amazon was to blame for drivers not receiving legally required breaks and overtime.
  • Amazon has faced similar legal challenges in California and other states.
  • See more stories on Insider’s business page.

Amazon agreed last month to pay some of its contract delivery drivers in Washington state $8.2 million to settle a class-action wage-theft lawsuit, reported earlier on Friday by Vice News and confirmed by Insider.

The lawsuit, originally filed by two Amazon delivery drivers in 2017, had alleged Amazon was partly to blame for illegally failing to pay drivers the minimum wage and denying them compensation for overtime and rest breaks.

The drivers, Gus Ortiz and Mark Fredley, worked for Amazon delivery service partner Jungle Trux – one of a sprawling network of contractors Amazon uses in part to reduce its legal liability and labor costs.

Ortiz and Fredley alleged Amazon imposed delivery quotas of 150 to 200 packages per day, forcing drivers to skip legally mandated rest breaks and work past their 10-hour shifts to complete the routes, and that Jungle Trux failed to pay them for those extra hours.

The settlement, first reported on Friday, covers drivers who worked for eight Amazon delivery service partners (DSPs) in Washington state between December 2014 and July 2020: Dash Delivery, Delivery Force, A‐1 Express Delivery Service (doing business as 1‐800 Courier), Progistics Distribution, Revelation Delivery, Genesis Delivery, and Transportation Brokerage Specialists.

“Amazon does not tolerate violations of labor laws. Where we find repeated violations, or an inability to correct labor violations, we terminate contracts with DSP program participants,” Amazon spokesperson Leah Seay told Insider in a statement.

But the company has faced a number of legal challenges from drivers employed by its DSP network.

California regulators fined Amazon $6.4 million for wage-theft violations earlier this month concerning former Amazon contractor Green Messengers. Amazon told Insider it was “not aware of the investigation” and is appealing the fine.

Amazon is also facing class-action lawsuits over wage-theft allegations in Colorado, Florida, Illinois, Kansas, Maryland, Minnesota, Missouri, Ohio, Texas, and Washington state, according to Vice’s analysis of court records.

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Uber will pay its 70,000 UK-based drivers minimum wage and benefits following a major Supreme Court defeat

uber driver prop 22
Rideshare driver Teresa Mercado raises her fist in support as app based gig workers held a driving demonstration with 60-70 vehicles blocking Spring Street in front of Los Angeles City Hall urging voters to vote no on Proposition 22 on Oct. 8, 2020.

  • Uber is reclassifying its UK-based drivers as “workers,” it said in a regulatory filing Tuesday.
  • The move requires Uber to follow minimum wage, paid vacation, and other labor laws.
  • Uber strongly opposes efforts to reclassify its drivers, but pivoted in the UK after a legal defeat.
  • See more stories on Insider’s business page.

Uber announced Tuesday it will reclassify drivers in the United Kingdom as “workers,” guaranteeing them minimum wage, paid vacation, pensions, and additional protection under the country’s labor laws.

In a statement, Uber told Insider the move will impact more than 70,000 drivers, and follows a recent unanimous Supreme Court decision that determined drivers should be classified as workers.

Uber initially downplayed the ruling, saying it “focussed on a small number of drivers who used the Uber app in 2016,” though shares of Uber dropped as much as 2% following the ruling.

With Tuesday’s announcement, Uber has opted to reclassify all UK drivers rather than fight legal battles with individual drivers about whether the court’s ruling would apply to them.

“Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives,” Jamie Heywood, the regional general manager for Northern and Eastern Europe, told Insider in a statement.

The move is a major shift for Uber, which has aggressively fought rulings by courts and regulators in the US that have determined drivers to be employees as opposed to contractors. In California, Uber spent at least $30 million persuading voters to pass Proposition 22, a law it co-authored that carved out an exemption from state labor laws to allow rideshare and food delivery drivers to be treated as contractors.

Unlike American law, which defines workers as employees or contractors, UK law has an additional “worker” category, which entitles workers to receive the minimum wage, paid vacation, rest breaks, and protections against illegal discrimination, retaliation for whistleblowing, and wage theft. That classification falls short of guaranteeing benefits like parental leave and severance to which full employees are entitled.

Uber said the UK minimum wage, which is slightly above $12, will serve as an “earnings floor, not an earnings ceiling” after accounting for roughly 62 cents in per-mile expenses, but that drivers won’t be paid for the time they spend waiting for a ride – which some researchers have found accounts for as much as 33% of drivers’ work.

Uber also said it will pay drivers around 12% of their earnings as vacation pay every two weeks and enroll them in a pension plan to which Uber will also contribute.

Labor advocates voiced their support for the move and the court ruling that proceeded it.

“Dear America … see what happens when a government lays it down? Is Uber leaving? No, they’re actually doing right by their workforce in the UK. Our drivers deserve this too. Why would an American company short change American workers? Because we let them!” tweeted California Assemblywoman Lorena Gonzalez, the author of AB-5, the state labor law that Uber sought an exemption from by pushing Prop 22.

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A year into the pandemic, Uber and Lyft drivers say gig companies are still failing them. They blame Prop 22.

GettyImages 1218814557 NEW YORK, NY - APRIL 14: A driver pauses as city employees fill-up cars with take-away meals to be delivered to the elderly and those that can not leave their housing due to the coronavirus at a community center in Brooklyn on April 14, 2020 in New York City, United States. The National Guard joined other New York City city agencies in loading up taxi's, Uber's, Lyft's and other 'for hire' vehicles which have joined the effort in delivering meals across the city. New York has been the hardest hit city in the nation from the COVID-19 outbreak. (Photo by Spencer Platt/Getty Images)
Rideshare and food delivery drivers working for companies like DoorDash, Uber, and Instacart have complained the companies aren’t providing PPE or pay for the time it takes them to properly clean their vehicles.

  • Uber and Lyft rideshare and food delivery drivers plan to protest Wednesday at Uber’s headquarters.
  • They say the companies won’t provide PPE or pay them for the time it takes to clean their vehicles.
  • San Francisco supervisor Matt Haney plans to propose a law that would require companies to do both.
  • Visit the Business section of Insider for more stories.

Rideshare and food delivery drivers are planning to protest Wednesday outside Uber’s headquarters in San Francisco, California, over what they say is gig companies’ continued failure to protect them nearly a year into the COVID-19 pandemic.

Drivers for Lyft, Instacart, Uber, and Uber subsidiary Postmates said in a press release announcing the protest that the companies aren’t providing adequate PPE and have refused to pay them for the time it takes to clean their vehicles.

They said that Proposition 22 – an industry-backed law passed in California in November that classified rideshare and food delivery drivers as contractors, excluding them from certain labor protections and restricting the ability of local governments to regulate gig companies – is largely to blame.

“Eleven months into this pandemic and workers are still asking for the most basic life saving protections for themselves, their families and their communities,” Cherri Murphy, a Lyft driver and organizer with Gig Workers Rising, a co-organizer of the protest, said in a statement. 

“It’s really stressful – I’m always being timed when I’m driving for these companies and if I don’t get places quickly, I can be punished. It’s like the companies don’t care about making sure I have enough time to wash my hands, clean my car, and wipe down surfaces,” Lucas Chamberlain, Instacart driver and member of We Drive Progress, another group behind the protest, said in a statement.

Under Prop 22, drivers aren’t paid for the time they spend waiting for Uber or Lyft to find them a ride or delivery order or sanitizing their vehicles in between jobs. Some gig economy researchers have estimated that loophole could allow companies to pay drivers for just 67% of the hours they actually work. 

“Since the COVID-19 crisis began, Lyft has provided tens of thousands of face masks, cleaning supplies and in-car partitions to drivers at no cost to them, and continue to provide access to these supplies today. Our most active drivers also received a free safety kit, consisting of a reusable cloth face covering, sanitizer and disinfectant,” a Lyft spokesperson told Insider, adding that Lyft doesn’t profit off PPE.

Uber told Insider that it has allocated $50 million toward safety supplies for drivers and said it has provided 30 million masks and other cleaning supplies to drivers worldwide.

But while California law requires most companies to provide PPE and sick pay to their employees and to pay into the state’s unemployment insurance program, Prop 22 classified drivers as contractors, allowing gig companies to save far larger amounts by not having to cover those costs. Uber and Lyft drivers last year claimed they’re owed $630 million in back pay as a result of the misclassification. One study found that between 2014 and 2019, the two companies should have paid $413 million into California’s unemployment insurance fund.

Uber spokesperson Kayla Whaling told Insider the company “has tried to do everything we can to support [independent contractors] while they support our communities, including distributing PPE free of charge, providing financial assistance for those who were diagnosed with COVID-19, helping connect them to new work opportunities on Uber or elsewhere, and consolidating information to help them apply for PPP loans or federal unemployment assistance.”

Still, Uber hasn’t always delivered on those promises, and when it has, it’s often only done so following backlash from drivers, regulators, courts, or the media.

Insider reported last April that, despite Uber’s claims it would pay drivers who tested positive for COVID-19, the company had denied legitimate claims and even locked out drivers who requested sick pay.

In July, a federal judge in New York ruled that Uber and Lyft had delayed the state’s ability to pay drivers unemployment benefits because they had played “games” with its requests for earnings data.

Wednesday’s protest – which Gig Workers Rising and We Drive Progress said will include a socially distanced rally – comes as some lawmakers in California are already pushing for more accountability for gig companies who rely on rideshare and delivery drivers.

San Francisco supervisor Matt Haney said he plans to introduce legislation that would require companies like Uber and Lyft to provide PPE and pay drivers for time they spend cleaning their vehicles.

“In the midst of this devastating pandemic, workers have gone above and beyond to protect themselves and our communities by purchasing protective equipment and cleaning supplies and spending their personal time sanitizing their cars to save lives. It is outrageous that while delivery app corporations continue to rake in profits, workers are forced to shoulder these burdens while struggling to make ends meet,” Haney said in a statement.

Do you work at Uber, Lyft, or another food delivery or rideshare app company? We’d love to hear how your company is navigating challenges brought on by the pandemic. Contact this reporter using a non-work device via encrypted messaging app Signal (+1 503-319-3213), email (tsonnemaker@insider.com), or Twitter (@TylerSonnemaker ). We can keep sources anonymous. PR pitches by email only, please.

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Uber and DoorDash are hiking food delivery and rideshare prices for Californians to pay for new driver benefits

DoorDash Biker
DoorDash Biker

  • Uber and DoorDash are raising prices on customers in California in order to pay for new driver benefits guaranteed under Proposition 22.
  • Uber will introduce a flat fee between $0.30 and $2, while DoorDash will slightly increase its service fees. 
  • Drivers will still receive substantially fewer benefits under Prop 22 — a law written and bankrolled by Uber, DoorDash, and other gig companies — than they would have been under the state’s gig work law, AB-5.
  • As a result, the companies’ labor costs won’t increase as much, meaning they likely won’t increase prices as much for consumers, at least initially.
  • Visit Business Insider’s homepage for more stories.

Uber and DoorDash are raising prices for customers in California in order to pay for new benefits guaranteed to rideshare drivers and food delivery couriers under a new statewide law that’s set to go into effect this week.

Uber said Monday it’s introducing a flat fee per purchase that will vary based on customers’ location and the service – between $0.30 to $1.50 for rides and between $0.99 and $2 for Uber Eats deliveries.

DoorDash, rather than a flat fee, will roll out slightly higher service fees starting Wednesday, and may adjust certain promotions, such as DashPass, that could also lead to higher prices, a spokesperson told Business Insider.

The surcharges are intended to help cover the costs of minimum earnings, per-mile expenses, healthcare stipends, accident insurance, and other benefits that rideshare and food delivery companies will soon be required to pay workers.

Those perks became enshrined in California law after voters in November passed Proposition 22 – a controversial law that Uber, DoorDash, Lyft, Instacart, GrubHub, and Postmates authored and spent more than $200 million trying to pass.

The law exempts companies from having to provide rideshare and food delivery drivers with basic employment benefits guaranteed to other Californians under the state’s gig work law, AB-5, and denies certain labor protections to those workers.

Read more: California voters approved Proposition 22, keeping ride-share and food delivery drivers as contractors – here’s what that means for companies like Uber, Lyft, Instacart, DoorDash and their workers

That’s a major victory for rideshare and food delivery companies, which were facing substantially higher labor costs under AB-5 – Uber and Lyft gained a combined $13 billion in market value following Prop 22’s passage. Under Prop 22, those companies are required to provide a smaller array of benefits and often at a lower cost than what they would have had to under existing laws. 

For example, drivers will soon be guaranteed 120% of the minimum hourly wage, but they are only paid for “engaged” hours when they have an active ride or delivery, not the hours they spend returning from long trips or waiting for Uber or DoorDash to match them with a job. According to one study, that could result in drivers not being paid for up to a third of their day.

Drivers will also be compensated $0.30 per-mile for vehicle expenses during engaged time, just half of the $0.58 that the IRS estimates it costs to operate a vehicle per mile. Healthcare subsidies are similarly tied to engaged time and lack significant benefits that come with typical employer-based healthcare.

After AB-5 went into effect this year, Uber, Lyft, and other companies refused to reclassify drivers as employees as required by the law, meaning they never provided the benefits it guaranteed.

As a result, while the partial benefits guaranteed by Prop 22 will cost companies less than those guaranteed under AB-5, they are nonetheless new costs the companies hadn’t previously incorporated into their pricing – thus, the new surcharges from Uber and DoorDash.

Uber has yet to turn a profit in its more than 10-year history, and while DoorDash turned a surprise $23 million profit during the second quarter of 2020, the company said that it expected costs to increase and that it “may not be able to maintain or increase profitability in the future,” which may help explain why the companies are passing off part of these new costs to customers.

Read the original article on Business Insider