is imposing new fees on rides and deliveries in California to help pay for new benefits for gig drivers in the state. The new benefits stem from the November approval of Proposition 22, a ballot measure that exempted companies like Uber,
from a law called Assembly Bill 5 that would have otherwise required them to classify drivers as employees.
During the Prop 22 campaign, the companies emphasized that drivers would get new benefits under the measure, even if they weren’t as generous as those that would be required under Assembly Bill 5. This week, Uber (ticker: UBER) notified California riders that it will provide drivers and delivery people with new benefits, including guaranteed minimum earnings, injury protection insurance, and a health-care stipend. Riders are going to help pay the freight.
“You’ll see a new California Driver Benefits Fee added to each ride or delivery to help make these benefits and protections possible,” the company said in the notification.
In response to a query from Barron’s, Uber said the fee varies by geography and service. For Rides, the fee ranges from 30 cents to $1.50, with fees of 30 cents per ride in San Francisco and 75 cents in Los Angeles. For Uber Eats, the fee varies from 99 cents per delivery (in Los Angeles) to $2 per delivery (in San Francisco.)
A DoorDash (DASH) spokesman said the company won’t impose a single flat fee, but confirmed that it is “exploring slight percentage increases in the service fees for California orders starting Wednesday,” when asked whether the company plans to do the same.
The spokesman also said DoorDash is considering “certain promotion adjustments [to the Dash Pass subscription service, for example] that may affect price for some customers,” and adds that the company will “monitor the impact and adjust as the measures continue to be implemented.”
Lyft (LYFT) didn’t immediately respond to queries about whether they plan a similar approach to cover additional benefits for drivers in California, although according to the company’s website, Lyft levies both a “platform fee” and “service fee” on every ride. The site says the platform fee “is a variable amount that helps us maintain the platform, make new app improvements, and keep our community growing,” while the service fee “is a fixed amount that helps support regulatory, safety and operational costs.”
Write to Eric J. Savitz at [email protected]