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Gig Drivers Struggle with Sub-Minimum Wages Post-Prop 22, Study Reveals

gig drivers making below minimum wage
© Dan Gold

A groundbreaking analysis from the UC Berkeley Labor Center and the Center on Wage and Employment Dynamics has revealed that gig drivers in major metropolitan areas across the United States are earning significantly less than minimum wage. The study examined data from over 52,000 trips made by nearly 1,100 drivers in Los Angeles, San Francisco, Boston, Chicago, and Seattle, finding that most drivers barely scrape by when accounting for all work time, gas, and vehicle wear and tear.

The release of this report comes as the California Supreme Court is set to hear arguments challenging Proposition 22, a measure sponsored by gig companies that classified drivers as independent contractors. Simultaneously, a trial in Boston is addressing a similar challenge by the Massachusetts Attorney General.

According to the study, California passenger app drivers have a median wage of approximately $5.97 per hour without tips and $7.63 per hour with tips. Meal delivery drivers fare worse, earning about $4.98 per hour without tips and $11.43 per hour with tips, all of which fall far below the state’s minimum wage of $16.00 per hour.

Proponents of Proposition 22 had argued that the measure would increase earnings for gig drivers in California. However, the study’s findings indicate that drivers for companies like Uber, Lyft, and Grubhub are earning well below the state minimum wage. Furthermore, Uber and Lyft drivers in California are making less than their counterparts in Boston, Chicago, and Seattle.

“A deep dive into the data shows that drivers are making sub-minimum wages,” stated Ken Jacobs, co-chair of the UC Berkeley Labor Center and one of the report’s authors. “Gig drivers are getting a raw deal.”

Professor Michael Reich, chair of the UC Berkeley Center on Wage and Employment Dynamics and another of the report’s authors, added, “We were especially surprised by the low pay of delivery drivers. Once you factor in expenses, many delivery drivers are just working for tips.”

The report’s findings suggest that policies similar to Proposition 22, which are being proposed in other states like Massachusetts, are unlikely to raise drivers’ earnings to meet state minimum wage standards.