By Eliza McCullough, Brian Dolber,* Justin Scoggins, Edward-Michael Muña, and Sarah Treuhaft
Working conditions and compensation in the rideshare industry have significant consequences for millions of California’s workers and their families, who are disproportionately people of color and immigrants. With the advent of Uber and Lyft, the number of adults who work as taxi drivers or chauffeurs for their primary job tripled over the past decade. From 2020 to 2021, 1.3 million Californians drove for rideshare and food delivery companies.
Uber and Lyft dominate the rideshare industry, providing on-demand ride-hailing and delivery services via mobile apps that depend on mass data collection from drivers and consumers. Despite the level of control that these companies exert over their workforce through algorithms, they maintain that their drivers are independent contractors. This is a key element of their business model, allowing them to avoid providing drivers employment benefits like health insurance and paid sick leave, or paying a minimum wage.
In 2019, California passed legislation (Assembly Bill 5) that would have clarified conditions of independent contracting for all California workers and required Uber, Lyft, and food delivery companies to treat drivers as employees. In response, the companies spent a record-shattering $224 million drafting and campaigning for a ballot initiative, Proposition 22, to rewrite labor laws in their favor. The initiative passed in 2020, allowing companies to legally classify their drivers as independent contractors not subject to basic employment protections, despite drivers’ lack of control over setting their own fares, or other conditions traditionally part of independent contractors’ rights. In effect, Prop 22 rewrote labor law for California’s entire app-based transportation and delivery workforce.
To understand the impact of Prop 22 on driver compensation, the National Equity Atlas partnered with Rideshare Drivers United and 55 rideshare drivers working across the state’s major rideshare markets to collect and analyze driver data from November 1, 2021, to December 12, 2021, using the Driver’s Seat Cooperative mobile app. We assessed how compensation under Prop 22 compares with what compensation would be if the drivers were classified as employees. We also conducted interviews with a subset of these 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.
This is the first study led by drivers that directly collects earnings and work condition data, with disaggregation by race/ethnicity, to estimate compensation under Prop 22. It builds upon our previous study analyzing driver access to health care and borrows from a methodology developed by the UC Berkeley Center for Labor Research and Education, whose research projected that drivers would earn subminimum wages under Prop 22 and similar legislation.
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Immigrant Integration & Racial Justice
Our work on immigrant integration and racial justice brings together three emphases: scholarship that draws on academic theory and rigorous research, data that provides information structured to highlight the process of immigrant integration over time, and engagement that seeks to create new dialogues with government, community organizers, business and civic leaders, immigrants and the voting public to advance immigrant integration and racial equity.
Economic Inclusion & Climate Equity
In the area of economic inclusion, we at ERI advance academic theory and practical applications linking economic growth, environmental quality, and civic health with bridging of racial and other gaps; produce accessible and actionable data and analysis through the data tools; and establish research partnerships to deepen and advance the dialogue, planning, and actions around racial equity, environmental justice, and the built environment.
Social Movements & Governing Power
ERI’s work in the area of governing power includes: conducting cross-disciplinary studies of today’s social movements, supporting learning and strategizing efforts to advance dialogues among organizers, funders, intermediaries, evaluators, and academics, and developing research-based social change frameworks and tools to inform—and be informed by—real-world, real-time efforts towards a vision of deep change.
In 2020, the USC Program for Environmental and Regional Equity (PERE) and the USC Center for the Study of Immigrant Integration (CSII) merged to form the USC Equity Research Institute (ERI).
The full list of publications published under our previous and current names can be found in our publications directory.