Policy

California gig workers say Prop. 22 isn’t delivering promised benefits

The gig-economy companies want to use Prop. 22 as a model in keeping workers as independent contractors.

Gig workers hold a sign in a crosswalk outside Uber headquarters in San Francisco.

Gig workers in California want companies to automatically provide health care stipends to those who work the required number of hours.

Photo: Megan Rose Dickey/Protocol

When Instacart sent Saori Okawa an email saying she was eligible to apply for a health care stipend, the delivery driver had been expecting it.

Instacart and other gig-economy companies had spent $224 million urging voters to pass Proposition 22, with a key message that it would give workers employee-like benefits while keeping their status as independent contractors. The companies viewed the ballot measure as critical for their businesses, the only realistic way of staving off AB 5, a California law that strictly limits when companies can hire workers as contractors.

Now, as Congress considers the PRO Act, a measure that would use some aspects of AB 5 in considering whether workers can unionize, some couriers and drivers in California are protesting Prop. 22, saying the actual benefits they're getting fall far short of what was promised.

Okawa submitted her documents but was rejected because she's already insured through Medi-Cal. Prop. 22 does clearly state that stipends only apply to those who purchase policies through Covered California, but Okawa said the Prop. 22 advertisements were misleading.

"During the Prop. 22 campaign, they said if you're working a minimum of 25 hours that they were going to give [the stipend]," she said. "They didn't say it only applies to this or that."

She and dozens of other gig workers staged a protest, organized by We Drive Progress, Mobile Workers Alliance and SEIU 1021, outside Uber's new offices in San Francisco to demand that companies automatically provide health insurance stipends to all workers who meet the minimum time requirements. Under Prop. 22, companies can make gig workers apply for the benefits.

Okawa has worked for Uber, Instacart and DoorDash over the years, but spends the bulk of her time working for Instacart, she said. Okawa, an immigrant from Japan, said many of her friends in gig work are also immigrants, and either have Medi-Cal or no insurance at all.

If she were to receive the stipend, Okawa said, she would then be able to afford to get a commercial policy through Covered California's marketplace, which could offer better coverage.

Gig workers hold a sign at a protest in San Francisco. Saori Okawa (left) with a fellow gig worker at the rally in San Francisco.Photo: Megan Rose Dickey/Protocol

"A lot of times, my Medi-Cal has a lot of restrictions on the doctors," she said. "So I would like to look into better insurance if there is one. And if [companies] are helping. A lot of times we're not making a lot of money."

Jorge Orantes, a ride-hail driver for Uber and Lyft, who is currently uninsured, would like to get health insurance through Covered California but cannot currently afford it, he told Protocol. He'd also like the provision of a stipend to be automatic.

"We want our stipend that they promised to us," he said.

During the Prop. 22 campaign, critics pointed out that the promised stipend would be difficult to qualify for. Workers would have to purchase a Covered California policy in advance, then hope that they made enough hours to qualify for the stipend, which would cover 82% of the cost of a typical policy known as Bronze coverage. If their hours slipped, they would still have to pay the full cost of the premium.

In March, Instacart said 12% of California shoppers were eligible for the health care subsidy, which meant they had worked more than an average of 15 hours per week in the fourth quarter of 2020. Of those eligible, Instacart said 25% requested and received the subsidy. That resulted in Instacart spending $2.2 million on health care subsidies.

Uber says the goal of the stipend is to "provide the drivers and delivery people who don't already have health insurance a path to access coverage," spokesperson Kayla Whaling told Protocol.

Whaling pointed to a recent survey, commissioned by Uber, that shows 89% of drivers already get health insurance from another source. So far, 14% of drivers have qualified and signed up to receive health care stipends. But another survey, commissioned by SEIU 721, found that many drivers don't understand how to receive the health care stipend from companies. It also found that 62% of drivers do not believe Prop. 22 has made it easier to receive health insurance benefits.

DoorDash said it's proud of the benefits Prop. 22 has been able to provide to workers, a spokesperson told Protocol.

"Since Prop. 22's passage, we've worked hard to educate Dashers on these new benefits and ensure the process to access the health care stipend for those who qualify is quick and easy," the spokesperson said.

The Protect App-Based Drivers And Services Coalition, which consists of Uber, Lyft, DoorDash, Instacart and Postmates, echoed that sentiment. Geoff Vetter, a spokesperson for the coalition, said that companies have "extensively communicated with drivers" about their benefits, how to qualify for the stipend and how to apply for it.

The issues with Prop. 22-style benefits could spread if other states adopt similar measures. In an earnings call with investors, Lyft CEO Logan Green said Prop. 22 "can provide a model for other states." Lyft formed a Super PAC, Illinoisans for Independent Work, which is making similar promises of preserving "independence" and "flexibility" for gig workers.

But, according to workers at the Tuesday rally in San Francisco, companies have not clearly communicated how to get the benefits that came along with Prop. 22's flexibility.

"We are here today because we want our health care," Orantes said. "They said we'd get health care, but they don't give us anything."

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