Major Gig Company Has Raised Prices

Many major gig companies have raised prices in California after prop 22. 

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Many major gig companies have raised prices in California after prop 22. 

Instacart’s service fee is rising from 5% to 8%, making it the last Gig company to announce prices in the wake of Proposition 22. However, the passed state ballot provides gig workers, independent contractors, by giving them additional benefits. 

 However, the increased prices will not be applied to instacarts monthly or annual subscription services. Moreover, it will help to cover driver benefits which is included in Prop. 22. , the company said, including 120% of the state’s minimum wage, a healthcare stipend, 30 cents per mile vehicle expenses, and occupational accident insurance.

“Historic new offerings” for gig workers who get to maintain “their independence and flexibility”, but labor groups argue these perks are inferior compared to the benefits of full employment, and there’s no evidence conditions for gig workers are improving under Prop. 22 said by the spokesperson of Instacart. 

Moreover, Postmates is taking between 50 cents and $2.50 per order; Uber is attaching a $1.50 fee for rides and $2 for food delivery; Lyft’s fees are 30 cents to $1.50 based on location and Doordash is charging higher service fees.

However, Labor advocates are of the view that gig companies raising prices is a “corporate bait and switch.” Gig Workers Rising said in a statement in reply to Uber’s additional fees said Gig companies argued that making drivers employees would raise prices, but fees are still going up anyway. “Now that Prop. 22 has passed, Uber is announcing that riders will have to shoulder increased costs after all so that the company can continue to skirt its responsibilities to workers,” 

Moreover, Veena Dubal, a professor at the University of California, Hastings College of the Law, argues that big companies are using driver benefits as a pretext to raise prices in their “quest to make a profit.”

Dubal said “Customers have been experiencing artificially low prices because of venture capital subsidies,” he adds “We’ve known for a long time that service fees were going to have to go up because the entire business model is based on capturing the market, addicting consumers to the service and then raising fees.”

 However, Uber CEO Dara Khosrowshahi has called Prop. 22, which went into effect in December, the “third way” to classify drivers. While gaining independent contractor status, drivers get some benefits of employment. Uber and other gig companies are sending out that model around the world as lawmakers around the world look to enforce them. Labor groups, though, say their promised benefits are inadequate. Prop. 22’s minimum wage and vehicle expense are less advertised because it only accounts for time driving and doesn’t include time spent between riders or orders.

However, UK Supreme Court ruled on Friday that Uber drivers should be treated as workers and not self-employed independent contractors.