Weekly Round-Up: California Supreme Court Upholds Proposition 22

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The California Supreme Court’s decision to uphold Proposition 22 has left many questioning the future of gig worker protections. As laid-off office workers turn to food delivery apps to make ends meet, they find themselves trapped in a cycle of low pay and long hours. Meanwhile, Lyft’s settlement of a shareholder lawsuit has led to new safety measures. We break it all down for you.

California Supreme Court Upholds Proposition 22, Classifying Uber and Lyft Drivers as Independent Contractorsnbsp;

SOURCE – The New York Times

The California Supreme Court ruled to uphold Proposition 22, a ballot measure passed by state voters in 2020 that classifies Uber and Lyft drivers as independent contractors rather than employees. The decision marks a significant victory for ride-hailing companies, allowing them to continue operating in California without major changes to their business models.

• While the ruling does maintain flexibility for gig workers and guarantees some benefits, like a minimum earnings guarantee and a health insurance stipend, opponents argue that Proposition 22 comes at the expense of workers’ rights and limits the state legislature’s ability to oversee workers’ compensation.
• However, the ruling does leave potential challenges to Proposition 22 open in the future.
• While the rideshare companies celebrated the ruling, Hector Castellanos, a gig worker and one of the plaintiffs involved in the legal battle, expressed his strong disapproval of the court’s ruling. In his statement, he described Proposition 22 as a deceptive tactic that ultimately disadvantages and exploits workers of color and immigrant communities who make up a significant portion of the gig economy workforce.

Your take: Drivers, we want to hear from you! As independent contractors in California, a state known for its high cost of living and expenses, what are your thoughts on the recent California Supreme Court decision upholding Proposition 22?

Do you believe that the flexibility and benefits provided under this classification are sufficient, or do you feel that being classified as employees would better serve your interests? Let us know by replying to this email, and we may share your thoughts in a future edition of this newsletter!

Laid-Off Office Workers Struggle to Survive in the Gig Economynbsp;

SOURCE – Business Insider (Bypass paywall)

As layoffs continue to rise, particularly in the tech sector, many former office workers are turning to gig economy apps like DoorDash and Uber to make ends meet. However, they are quickly realizing that the earnings from these platforms are often insufficient to support a living wage.

• In an essay for Business Insider, Chandler Moncada, a former Uber Eats driver who lost his corporate job, shared his experience of working 12-15 hour shifts to pay his rent. Despite his efforts, he faced numerous challenges, including low pay, hidden tips, tip baiting, and excessive wear on his vehicle.
• Moncada’s story illustrates this: As more people turn to these platforms for income amid increased layoffs, the increased availability of gig workers inevitably leads to a saturation of the market, resulting in lower earnings for everyone involved. This oversupply of labor creates a race to the bottom, where workers are forced to accept lower pay and longer hours just to stay afloat, perpetuating a vicious cycle of exploitation and financial instability.

DoorDash Driver Exposes ‘Single Sauce Packet’ Scam Targeting Food Delivery Workers

SOURCE – TikTok

In a recent TikTok video, DoorDash driver Lemon Reccord, known as @favoritelifecoach on the platform, warned fellow food delivery drivers about a scam that targets them through suspicious orders. Reccord received an order from Taco Bell for a single sauce packet with no food or drinks included.

Shortly after, he received a phone call from someone claiming to be a detective with the Houston Police Department, alleging that the order was placed fraudulently. The “detective” requested Reccord’s credit card information linked to his DoorDash account under the guise of a “three-step verification process” to credit his account.

• Suspecting a scam, Reccord contacted DoorDash, who confirmed his suspicions and flagged the account.
• He ended the video by urging other delivery freelancers to be cautious and mindful of such scams, emphasizing that any calls from alleged detectives regarding fraudulent orders are fraudulent themselves.
• Scammers have a history of targeting delivery drivers and employing various tactics to steal their hard-earned money.

Lyft Settles Shareholder Lawsuit, Agrees to Implement Safety Measures Against Driver Misconduct

SOURCE – U.S. News & World Report

Lyft has reached a preliminary settlement in a shareholder lawsuit that accused the company’s officers and directors of failing to prevent sexual and physical assaults by drivers on passengers.

As part of the settlement, Lyft has agreed to implement several safety and governance reforms, including increasing passenger awareness of the “Alert 911 Silently” feature on its app, providing easier access to 24/7 live human support for reporting problems, and improving driver training and its code of business conduct and ethics.

• These changes will be in place for at least three years. While Lyft officials denied wrongdoing, the company settled to avoid the cost and disruption of litigation.
• The settlement also requires Lyft’s insurers to pay $700,000 to cover the plaintiffs’ legal fees.
• The lawsuit, which was the last shareholder case arising from Lyft’s March 2019 IPO, highlighted concerns about the company’s reputation due to inadequate driver training and background checks, as well as concealed defects in its electronic bikes that led to numerous injuries. The settlement is subject to a judge’s approval.

Are Restaurants and Delivery Apps Sabotaging Delivery Drivers + Wage Increases?

SOURCE – YouTube Shorts

RSG Senior Contributor, Sergio Avedian, is getting to the bottom of a growing issue for Uber: driver acceptance rates. You can watch Part 1 and Part 2 of the series here.

These rates have a direct correlation with driver pay, as more and more drivers employ strategies to maximize earnings. Uber’s TOS, per independent contractor law, cannot remove you from the platform for rejecting trips.

This means more drivers are declining trips that aren’t worth their time. In this episode, he explores whether the algorithm is pricing trips correctly, specifically after four years of inflation where driver costs have gone through the roof.

Is it time for the rate card to come back and get rid of upfront fares? Does this mean drivers will need to sacrifice being able to see the destination?

QUICK HITS

DoorDash hired Amazon veteran and current Flexport executive Parisa Sadrzadeh as its new vice president of strategy and operations. – THE INFORMATION (Paywalled, no way to bypass)

Controversial startup rideshare company BlackWolf is planning an expansion to Chicago, the third largest U.S. city. – CHICAGO BUSINESS

Lyft company president Kristin Sverchek is exiting the company on August 20. Lyft has stated that her departure does not stem from any internal disputes or conflicts with the company’s leadership, board members, or employees. – CNBC

Uber CEO Dara Khosrowshahi sold 500,000 shares of common stock on July 15, 2024. – TRADING VIEW

Must Listen Or Watch RSG Content

Here are this week’s featured podcast episode and YouTube videos:

• RSG258: Rideshare In The AIR With Nikhil Goel From Archer
• Costs Are Up, But Uber Isn’t Paying Up. What Gives? | Driver Diary with Sergio
• How To Handle The 5 Biggest CHALLENGES Of Driving Uber & Lyft in 2024
• Uber City To City – Is It Just Uber Intercity Rebranded?
• The Rideshare Guy en Espa?ol
• Make sure you Subscribe so you don’t miss out on future conversations and interviews!

Uber just announced a big partnership with T-Mobile/Play Octopus. Sign up for Octopus here and you’ll get a $25 bonus once you start driving!

Full-time drivers can earn up to $100 per month (plus any extra tips from happy riders) and can refer new drivers to the platform for a $25 referral bonus.