App-based services helped California survive the pandemic

The economic devastation of the pandemic is well-chronicled. At its peak, more than two million Californians lost their jobs. About a third of California restaurants were expected to close, many permanently, according to the California Restaurant Association. Families struggled to pay for rent, food, and basic necessities. The worst hit populations were low-income families, communities of color and small, minority-owned businesses.

In the wake of such devastation, a recent report found that app–based rideshare and food delivery platforms helped provide earnings for displaced or struggling workers, and helped keep many restaurants and retailers afloat.

App-based delivery provided $9,115,111,056 in direct revenue to restaurants and merchants, helping keep restaurants open and workers employed

According to the new report, which aggregated data from the state’s four largest app-based rideshare and food/grocery delivery platforms, during the first year of the pandemic (March 2020 – February 2021):

–117,019 restaurants and merchants utilized app-based delivery services in 2020, empowering them to access new streams of revenue and reach new consumers as in-person dining was prohibited or seriously limited.

–California consumers placed more than 258,617,620 individual orders with restaurants and merchants through app-based services.

–App-based delivery provided $9,115,111,056 in direct revenue to restaurants and merchants, helping keep restaurants open and workers employed.

Access to app-based platforms and customers was especially vital for smaller, mom-and-pop restaurants and retailers as well as minority-owned businesses that didn’t have reserves, resources, and technology to sustain prolonged shutdowns or market to customers in order to keep orders coming in.

Similarly, app-based platforms provided much needed opportunities to earn money during the pandemic—to supplement income, make up for lost jobs, or simply provide reliable and flexible earning opportunities for hundreds of thousands of Californians.

According to the report:

–1,280,240 drivers in California earned income through app-based platforms during the first year of the pandemic.

–808,469 Californians started app-based rideshare and delivery driving for the first time during the pandemic, proving that app-based platforms were critical to helping workers who lost jobs or income or those who needed a new way to earn.

–$4,223,994,921 in total earnings was paid to app-based drivers during the first year of the pandemic.

App-based services and platforms were able to, quite literally, keep people out of poverty, help mothers and fathers put food on their tables, and keep others from losing their homes.

Not very long ago, these app-based services and jobs were at risk of being eliminated or severely reduced in California. The Legislature passed devastating legislation in 2019 that would have destroyed the ability of app-based drivers to work independently, undermining the flexible earning opportunities that drivers overwhelmingly desire, and the viability of on-demand platforms. Economic studies predicted that, should drivers’ independent contractor status be eliminated, about 900,000, or 90%, of app-based jobs would have disappeared.

In response, California voters passed Proposition 22 in November 2020, which preserved app-based driver independence and flexibility, while providing historic new benefits like health care and workers-comp like insurance coverage.

Prop 22 not only saved jobs, but it saved the app-based services that were absolutely vital during the recession and that will continue to be critical as our economy reopens and rebounds.

The voters have spoken. We’re nearing the end of a pandemic that decimated our communities and rocked our economy. Leaders across the state are asking policymakers in Sacramento to focus on policies that will help Californians get back on their feet.

Let’s put an end to frivolous policy proposals more concerned with grabbing headlines than doing right by struggling communities.
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Editor’s Note: Jay King is president & CEO of the California Black Chamber of Commerce.