Seamless, which is owned by the app-based food delivery company Grubhub, has followed its parent company in setting the default tip option for drivers to zero in the wake of Proposition 22’s passing in California.
On December 16, GrubHub shifted its model to introduce a new $1.50 “driver benefits” fee for California customers, saying it would subsidize the costs of providing drivers with new benefits under Proposition 22. The company then reduced its default tipping option to zero, introducing a prompt that read “If you would like to tip on top of the standard Driver benefits payment, 100% of your generosity will go to the driver.”
Seamless followed suit, with the exact same fees, prompts, and messages for customers who make deliveries through the Grubhub-owned platform. Motherboard tested the app in New York and Washington D.C., where the tip option defaulted to 10 and 20 percent respectively. In California, the default tip was zero and went up to $1.50, with an option to enter a customized tip amount.
Proposition 22 was a ballot initiative that exempted gig companies from reclassifying their workers as employees rather than independent contractors. It passed after a company-funded campaign spent well over $200 million (including millions donated to the California GOP) and deployed a record number of lobbyists. Waves of misleading political mailers and sponsored academic research were used to try and win over voters, while a targeted harassment campaign was launched against a vocal critic. All this was backgrounded by constant threats from the Prop 22 backers that the companies would leave the state if all else failed. Proposition 22 promised to provide ride-hail and delivery workers a guaranteed minimum pay of 120 percent of local minimum wage, a healthcare stipend, and some coverage of expense costs. Researchers at the Berkeley Labor Center found in a recent study that Proposition 22 would actually result in a decrease in driver earnings to $5.64 an hour.
A Grubhub/Seamless spokesperson told Motherboard that drivers are seeing a 20 percent increase in pay post-Prop 22 and they're seeing stable, guaranteed earnings before tips.
“On tipping, what we have seen so far is that Grubhub drivers in California are receiving 20 percent higher total pay per order with Prop 22 than before,” they said in a statement. “In a competitive market for drivers, California drivers are choosing to deliver for Grubhub more than ever before and now have more stability with guaranteed earnings before tips that are based on 120 percent of the local minimum wage and $.30 per mile during active delivery time, plus 100 percent of the tips they receive. We are always tweaking our product to maximize value created for drivers, diners and restaurants. Diners continue to have the ability to leave a tip for their driver, including through the custom tip feature.”
Suhauna Hussain reported for the Los Angeles Times in late December 2020, however, that the changes have slashed into Grubhub driver earnings, with one interviewed delivery worker estimating a 30 to 50 percent reduction in daily pay.
All this comes after a wave of price hikes from Prop 22 drafters DoorDash and UberEats, partially on the grounds that abiding by California employment law would radically increase prices and drastically reduce service.
Meanwhile, DoorDash has increased its service fees and tacked on city or county-wide fees in response to delivery caps passed during the pandemic to help struggling restaurants and Uber has introduced flat fees across California for both food delivery and ride-hailing.
At the same time, ride-hail workers in California and a union are arguing that Proposition 22 is actually unconstitutional and its obscure, hard-to-parse sections meant to protect the law from legislative backlash may have actually undermined powers expressly given to the legislature and Supreme Court.