California: Proposition 22 Threatens Gig Workers’ Rights

Have you ever ordered food or groceries on an app? Did you know that many workers hired by apps are being exploited?

These workers are known as gig workers because they work on-demand and are paid for each task they complete.

A 2016 Pew Research survey found that nearly 1 in 10 people in the US have taken on gig work.

Gig companies classify workers as independent contractors instead of employees.  That allows them to circumvent federal and state labor protections since independent contractors don’t get minimum wage protections, guaranteed sick pay, or the ability to join a union.

The gig companies also don't pay into Social Security or Medicare on behalf of the workers they classify as independent contractors.

Grocery shopping and delivery services is the latest boom area for the gig economy. During the Covid-19 pandemic shopping platforms have seen demand skyrocket.

Instacart, one of the biggest service providers, increased sales by 500% in the last year.

But that success isn’t shared with its shoppers. 

The platform uses an opaque algorithm to calculate how much each gig will pay, and workers say pay fluctuates dramatically, and is now less than what it was before the algorithm.

A 2019 study by Working Washington found that, the average base pay is $7.66 an hour.

Ginger Anne Farr, Instacart shopper: While I was working full-time for Instacart I had to go on financial assistance and receive food stamps just to survive to feed myself.

Karyn Johnson-Dorsey, Instacart shopper: I'm not suggesting that they pay us enormous salaries. I'm just suggesting that they pay a guaranteed minimum wage. I also would like to know how I am being paid.

One of Instacart’s rivals is Target-owned Shipt, which also has its own opaque algorithm to calculate pay.

Philippa Mayall, Shipt shopper: They are really underestimating the shop times, so then we are not getting paid a fair amount. And it's really potentially $15 an hour, but then once you minus all the expenses on top of that, then you are being paid less the minimum wage, unless somebody tips.

Workers told us that tips make up as much as 50% of their pay. But companies have not made it easy for workers to get tips.

Willy Solis, Gig Workers Collective: There's a tremendous amount of glitches that we keep running into. Glitches in the app and other problems are making tips even more unreliable, it is causing a huge fluctuation in our pay.

We’d like to report that the issues have been resolved, but they have not. It is really, really hurting the shopper community.

Shipt told us that its “updated pay model accounts for the effort it takes to complete and deliver orders.”

Adding, “throughout this change we’ve been transparent with shoppers”.

But Shipt didn't discuss whether it complies with minimum wage standards.

Instacart did not respond to our request for comment.

California has a new law, Assembly Bill 5, that addresses some of these problems in that state.

AB5 prevents gig companies from misclassifying workers under state law.

Under the law, gig workers will have

minimum wage

paid sick leave

Overtime

Necessary expenditures reimbursed and some basic rights protected.

But some gig companies are trying to take away these worker protections by using Proposition 22.

Venna Dubal, Professor, UC Hastings College of Law: It says that all of these workers, all of these low-income workers don't get access to the minimum wage, they don't get access to overtime compensation.  They don't get Workers Compensation. I know that this proposition is incredibly dangerous. It creates a lower standard of worker protections for the most vulnerable workers in our economy.

Labor rights protect us from exploitation at work. Say no to exploitation. Vote no on Proposition 22.