SEVERE WX : Wind Advisory View Alerts

Uber rides and food deliveries will cost more in California to cover new driver protections

Uber said Monday that customers in California will see prices increase this week for rides and food deliveries to help cover the costs of new benefits for it...

Posted: Dec 14, 2020 12:52 PM

Uber said Monday that customers in California will see prices increase this week for rides and food deliveries to help cover the costs of new benefits for its workers.

The new flat fees, which range from $0.30 to $2 depending on the service and location, will take effect Monday. The price hike comes as a controversial new gig economy law, which Uber and its peers spent millions pushing to pass, is set to take effect this week.

Californians voted in November to pass Proposition 22, or Prop 22, which exempts companies like Uber from having to classify their gig workers in the state as employees entitled to basic rights and protections such as workers' compensation, unemployment insurance, family leave, or sick leave.

Under the new law, Uber's drivers and delivery workers are independent contractors with some benefit concessions, including a minimum earnings guarantee based on "engaged time," when a driver is fulfilling a ride or delivery request, but not the time they spend waiting for a gig. In a blog post and an email to drivers about the changes, the company said, "If you earn less than the guaranteed minimum over 2 weeks, we'll pay you the difference automatically."

Drivers will receive $0.30 reimbursement per engaged mile, lower than the IRS' estimated $0.58 per mile cost of owning and operating a vehicle. Its workers will also be enrolled in an injury protection plan beginning this week. And starting next year, those with 15 on-trip hours per week will get a stipend for healthcare.

To fund these benefits, consumers will pay a "California Driver Benefits Fee" that varies by city, and by service, the company said. Rides will cost an extra $0.30 to $1.50. For food deliveries through Uber Eats, fees range from $0.99 per order in Los Angeles to $2 per order in San Francisco.

Uber had previously teased a number of drastic changes it may have had to make to remain in business in the state if the Prop 22 ballot measure had failed and the company was forced to classify its drivers as employees. The company said it might have had to downsize its fleet of drivers, shut down ridesharing in much of the state and tack on fees for riders to cover the more extensive benefits employees would receive in places it continued to operate.

Uber, along with Lyft, DoorDash, Instacart and Uber-owned Postmates, spent more than $200 million pushing the ballot measure.

On an earnings call two days after its political win in California, Uber CEO Dara Khosrowshahi said that execution of Prop 22 "may have some implication as it relates to rates," but that the company believes "any effect that it has on rates will not have a significant effect on trip volumes one way or the other based on the kinds of sensitivities that we've seen in the past."

Companies like DoorDash and Lyft have similarly said they expect to tack on some additional costs for customers associated with the changes for workers.

DoorDash spokesperson Taylor Bennett told CNN Business that rather than add a new fee, the company is exploring slight increases to existing service fees on California orders beginning Wednesday in response to new benefits associated with Prop 22.

Lyft notified drivers in an email last Friday that the minimum earnings and compensation for vehicle expenses associated with Prop 22 would go into effect on Wednesday. A spokesperson for Lyft said the company did not have anything to share regarding changes for riders.

Uber and Lyft have a long history of steep losses, and have said that they will achieve profitability on an adjusted basis next year. DoorDash, which went public last week, turned a rare quarterly profit during the pandemic before returning to a loss in the most recent quarter.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 345344

Reported Deaths: 4084
CountyCasesDeaths
Multnomah54651678
Washington37724310
Marion35705439
Clackamas28835298
Lane26661291
Jackson22465297
Deschutes19252122
Umatilla14081139
Linn12200114
Douglas11664238
Josephine9174191
Yamhill8438108
Klamath7549106
Polk707380
Malheur542374
Benton521531
Coos481591
Columbia368143
Jefferson355650
Union309944
Lincoln306033
Wasco275839
Crook263643
Clatsop238027
Baker195628
Tillamook191926
Hood River186036
Morrow180223
Curry177019
Harney106424
Grant96512
Lake86910
Wallowa65712
Gilliam1484
Sherman1453
Wheeler941
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 4802761

Reported Deaths: 70456
CountyCasesDeaths
Los Angeles147341026379
Riverside3689534978
San Diego3631694151
San Bernardino3558485562
Orange3224975513
Sacramento1574982273
Santa Clara1443001886
Fresno1437452048
Kern1437161600
Alameda1197741365
San Joaquin1016431696
Ventura1004421162
Contra Costa99102969
Stanislaus849231310
Tulare78753945
San Francisco53974644
San Mateo53781618
Monterey50676582
Solano45734334
Santa Barbara44770518
Merced41680577
Sonoma40638400
Placer38813412
Imperial35591762
Kings32197312
San Luis Obispo29590330
Madera23420281
Butte23298257
Shasta23230334
Santa Cruz20830217
Yolo20092247
Marin17570243
El Dorado16947149
Sutter13762169
Napa12797100
Yuba992780
Tehama9240103
Humboldt9085108
Nevada902590
Mendocino751686
Lassen743743
San Benito735972
Tuolumne671793
Lake6499103
Amador536763
Siskiyou442742
Glenn429930
Calaveras380279
Del Norte355739
Colusa301618
Inyo194239
Mono16285
Plumas15476
Mariposa126215
Trinity85811
Modoc6678
Sierra1710
Unassigned1480
Alpine1020
Out of CA00
Medford
Clear
68° wxIcon
Hi: 66° Lo: 35°
Feels Like: 68°
Brookings
Clear
59° wxIcon
Hi: 68° Lo: 42°
Feels Like: 59°
Crater Lake
Clear
68° wxIcon
Hi: 52° Lo: 26°
Feels Like: 68°
Grants Pass
Partly Cloudy
68° wxIcon
Hi: 69° Lo: 33°
Feels Like: 68°
Klamath Falls
Clear
66° wxIcon
Hi: 65° Lo: 27°
Feels Like: 66°
Big changes later this weekend
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events