Bulletin
Investor Alert

June 16, 2021, 7:47 a.m. EDT

Uber, Lyft drivers say new California law isn’t solving their health-care needs

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Uber Technologies Inc. (UBER)
  • X
    Lyft Inc. Cl A (LYFT)
  • X
    DoorDash Inc. Cl A (DASH)

or Cancel Already have a watchlist? Log In

By Levi Sumagaysay

A ballot initiative passed by California voters last fall has failed to make good on its promise to ride-hailing drivers, state lawmakers and drivers said Tuesday.

“Voters were sold misinformation, based on what we’re seeing on the ground,” State Assemblymember Wendy Carrillo said.

The state reopened after more than a year of COVID-19-related restrictions, which is expected to lead to a ride-hailing rebound, and drivers are calling on Uber Technologies Inc. /zigman2/quotes/211348248/composite UBER -2.29% and Lyft Inc. /zigman2/quotes/208999293/composite LYFT -10.56% to automatically provide them with the health insurance subsidy that was promised to them under Proposition 22. A survey commissioned by SEIU 721 shows that only 15% of drivers polled had applied for the stipend, and nearly 86% are likely to be deemed ineligible.

Proposition 22 was passed by 58% of California voter s in November after Uber, Lyft, DoorDash Inc. /zigman2/quotes/222973991/composite DASH +0.78% and Instacart spent more than $200 millio n on the campaign. The initiative — which allows gig companies to continue to treat their workers as independent contractors — promised a guaranteed wage for drivers, plus health care stipends for those who work for the apps 15 hours a week or more.

But drivers are finding that many of them don’t qualify for the stipends, which a Sacramento Bee report says covers about 40% of the average premium for the lowest tier of a Covered California plan, especially if they have health coverage through the state.

Neide Tameirão, a Lyft driver who spoke at a news conference organized by We Drive Progress and Mobile Workers Alliance, said she worked about 50 hours a week before the pandemic to make ends meet. After Proposition 22, she said “nothing has really changed.”

“I still work 50 hours a week and my earnings are still barely enough to get by. I don’t make enough money, so I’m on Medi-Cal.”

Tameirão said she was rejected when she applied for the health-care stipend, because she was on Medi-Cal, the state’s health insurance program for low-income individuals and families, plus those who are elderly, blind or disabled.

“They know a lot of their drivers are already on Medicare and Medi-Cal,” added Jerome Gage, a Southern California-based driver for Uber and Lyft and a worker organizer. “If you have an employer-based healthcare plan, that also disqualifies you. They put all these barriers in place.”

Mentioning that Lyft is scheduled to hold its annual general meeting on Thursday, Carrillo — a Democrat who represents the 51st Assembly district that includes East Los Angeles — said, “Lyft shareholders should know: Their company promised good wages and health care. They have not kept their promise.”

Lyft did not return a request for comment, but Geoff Vetter, a spokesman for the Protect App-Based Drivers & Services Coalition, said the companies have communicated to the drivers about how to qualify and apply for the new health benefits.

“In the five months since Prop 22 passed, thousands have started receiving the health care stipend and more will sign up to receive it as app-based work rebounds,” Vetter said.

An Uber spokeswoman sent the following statement: “The goal of the healthcare stipend is to provide the drivers and delivery people who don’t already have health insurance a path to access coverage. Surveys of drivers and delivery people with Uber show that the vast majority already have health insurance coverage from a separate employer, through a spouse, prior service, or some other source.”

The drivers and two members of the state Assembly also called for federal action by way of passage of the PRO Act, which would give drivers the right to organize. In addition, they urged the National Labor Relations Board to classify drivers as employees, not independent contractors.

The PRO Act was passed by the U.S. House of Representatives in March. The Senate has yet to take it up and may not do so because it does not appear to have enough support from senators.

See: PRO Act, called ‘most important labor legislation in several generations,’ passes House

State Assemblymember Miguel Santiago, a Democrat who represents the district that includes downtown Los Angeles, said the state is “subsidizing” the gig companies. Carrillo also pointed out that taxpayers “had to cover 100% of cost of unemployment” for drivers who were out of work because of the pandemic, because Uber, Lyft and other gig companies do not pay into states’ unemployment insurance funds.

See: Uber, Lyft and DoorDash stocks plunge after Biden’s labor secretary says ‘in a lot of cases, gig workers should be classified as employees’

Lucas Chamberlain, a driver in San Francisco, said he has worked for almost all the ride-hailing and delivery apps, and has done about 6,000 trips with Uber. He, too, is on Medi-Cal and was denied the health care stipend.

In 2019, he said he was doing a delivery for Uber Eats on his Vespa when he was struck by a vehicle. He needed surgery on his leg and physical therapy afterward, none of which Uber paid for, he said. Under Proposition 22, drivers are now supposed to be automatically enrolled in accident-protection insurance.

“I deserve to be an employee, to be treated equally, I deserve PTO and sick leave,” Chamberlain said.

“They should be ashamed,” Chamberlain said of gig companies. “I’m not a number, I’m a person and I deserve to be treated fairly by these corporations.”

/zigman2/quotes/211348248/composite
US : U.S.: NYSE
$ 41.81
-0.98 -2.29%
Volume: 42.97M
Aug. 4, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$80.36 billion
Rev. per Employee
$488,553
loading...
/zigman2/quotes/208999293/composite
US : U.S.: Nasdaq
$ 49.53
-5.85 -10.56%
Volume: 21.66M
Aug. 4, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$18.24 billion
Rev. per Employee
$505,814
loading...
/zigman2/quotes/222973991/composite
US : U.S.: NYSE
$ 178.52
+1.39 +0.78%
Volume: 1.24M
Aug. 4, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$57.72 billion
Rev. per Employee
$742,666
loading...

This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.