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Following Prop 22 Victory, Postmates Slaps California Customers With Biggest Fees Yet

Delivery apps warned that if Prop 22 didn’t pass, diners would pay more for every order. Then, they added big new fees anyway.

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Postmates will charge diners as much as an additional $2.50 per order to cover the benefits they promised if Prop 22 passed
Photo by Alexi Rosenfeld/Getty Images

A little more than a month after Postmates said that its prices would remain the same for customers following the passage of Proposition 22, the Uber-owned company has reversed course, charging California diners as much as an extra $2.50 per order, Forbes reports.

It’s just the latest food delivery company to add a significant fee to every order following the passage of Proposition 22, a ballot measure that San Francisco-based food delivery companies Uber, Instacart, Postmates, and Doordash spent over $218 million on to ensure that — unlike other companies that operate in California — their workforce of delivery drivers would remain classified as independent contractors. That classification means that the companies are not legally required to offer those workers basic labor protections like minimum wage and health care, benefits that come at a significant cost to most companies — and could prove impossible for the venture-funded delivery companies, none of which have reached profitability in their many years in business.

In their promotion of Proposition 22, the delivery companies promised that they’d offer workers their own benefits packages, including minimum pay rates and a stipend or subsidy for health care. In return for their support, the companies said, California voters could expect that the companies would remain in operation across the state; and that prices to use the services would not increase.

But within weeks of the November 3, 2020, election, in which Prop 22 was passed by 58 to 42 percent, a Doordash spokesperson told Eater SF that the company would add “slight percentage increases in the service fees” for all orders across the state, as well as “certain promotion adjustments” to products like its Dash Pass offering, which currently promises no-fee delivery on certain orders for a flat $9.99 per month.

Meanwhile, a spokesperson for Uber told Eater SF that as of December 14, customers of its Eats offering will see an increase of between 99 cents and $2 per order. Uber’s home city of San Francisco will be charged at the top end of the spectrum, at $2 per order, while Los Angeles customers pay less than half that, an extra 99 cents for every Eats delivery.

But when contacted by Eater SF in December, a spokesperson for SF-based Postmates — which since December 1, 2020, has been owned by Uber — said that while Uber Eats had added a fee, “at this time, Postmates pricing remains the same for customers.” That’s apparently changed, however, as after the SF Chronicle placed orders in various cities across California, the newspaper determined that Postmates had started adding a California Driver Benefits fee to deliveries within the state, one that tacks on “$2 in San Francisco and $2.50 in both San Jose and Oakland.”

A notation on Postmates’ support site says only that the fee “helps us fund the new benefits offered to drivers thanks to the passing of Prop 22,” that is, the proposition that Postmates spent millions on to ensure its passage. According to the Chron, “fees vary by market and range from 50 cents to $2.50 throughout the state.”

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