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Unintended Consequences of California Proposition #22


The passage of California Proposition #22 was intended to improve the remuneration of independent contractors comprising the Gig Economy. 


In accordance with the legislation, workers will receive a partial health-care stipend subject to performing 15 hours a week in delivery service.  For a full stipend, workers are required to spend 25 hours per week in “engaged” time, not including time spent driving without an assigned delivery.  There are no allowances for time-off due to illness. 


GrubHub reduced the default tip charge of 20 percent to zero, but added an additional benefit fee of $1.50 to each order in California.  The money raised is assigned to a central pool for qualified recipients. Effectively this will limit the number of drivers expected to be eligible for an allocation. Drivers maintain that the changes introduced by GrubHub and other delivery companies effectively negate the benefits projected from Proposition #22.