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How Does Prop. 22 Affect App-Based Drivers?

Rideshare Employees vs Independent Contractors

In November of 2020, California passed Proposition 22, an initiative that would allow certain rideshare and delivery companies to classify their drivers as independent contractors. The statute overruled California’s Assembly Bill 5 (AB 5), which was signed over a year prior in September of 2019. AB 5 instituted a three-factor test for acquiring independent contractor status.

To be categorized as an independent contractor, the bill requires the person/employee to be:

Free from a hiring entity’s control in regards to their performance and work completion
Performing tasks/work outside of the hiring entity’s usual course of operations
Engaged in an established trade, occupation, or business of the same nature as the work performed

The passing of AB5 and its test led to an abundance of gig economy workers being labeled as employees instead of independent contractors. This classification change took a toll on benefits, wages, and other occupational aspects. So, what does Proposition 22 mean for rideshare and delivery employees?

→ What’s the Difference Between an Owner/Operator and an Independent Contractor?

How does Proposition 22 affect app-based drivers?

Proposition 22 was a California ballot initiative that responded to the state’s recently passed Assembly Bill 5. AB 5 codified the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles that required employers to classify workers as employees unless they met the qualifications of an independent contractor according to the bill’s “ABC test.” And while AB 5 included exemptions from the Dynamex test for certain occupations, app-based rideshare drivers were not among the list. Since the bill’s passing, rideshare companies and delivery services have faced numerous legal suits disputing driver classification. With Proposition 22, companies like DoorDash, Uber, and Lyft could continue classifying their California drivers as contractors.

More specifically, the proposition allows these companies to label their drivers as independent contractors so long as they don’t:

Provide specific dates, times, or a minimum number of hours a driver must work
Require drivers to accept specific delivery requests
Prevent drivers from taking employment with other rideshares and/or delivery services or any other lawful business

In exchange for this allowance, the proposition requires these rideshare and delivery businesses to offer specific compensation and benefits for their drivers. The initiatives’ statement of purpose declares that it intends to enact labor policies specific to California rideshare companies and drivers. These policies will protect the legal rights of rideshare drivers and ensure that they are afforded employment protections and benefits, including minimum wage, healthcare subsidies, automobile accident insurance, and more.

Proposition 22 also states:

Rideshare drivers are entitled to 120% of California’s mandated minimum wage for their engaged time (i.e., the time between accepting a service request and fulfilling/completing said request) in addition to 30¢ per engaged mile.
Rideshare companies will provide drivers who average a minimum of 15 hours per week with a healthcare subsidy that is consistent with the requirements stated in the Affordable Care Act.
Rideshare companies will provide occupational accident insurance (with at least $1 million in coverage) to drivers for medical expenses and lost income resulting from an injury sustained while active on the company’s app.
Rideshare companies must obtain automobile liability insurance (with at least $1 million in coverage) to protect and compensate third parties that sustain any injuries and/or losses caused by a driver during their engaged time.

→ How the PRO Act Could Affect Owner/Operators

Why was Proposition 22 declared unconstitutional?

While companies like Uber, Lyft, and DoorDash praised the passing of the ballot, others were not so enthused. Some even saw the proposition as unconstitutional, including Alameda County Superior Court Judge Frank Roesch. In August of 2021, he ruled in favor of a lawsuit filed by the Service Employees International Union, calling the initiative “unenforceable.” He stated that multiple sections negated specific California laws, including a stipulation that required a seven-eighths majority for amendment approval, making any attempt at change nearly impossible. The judge also agreed that the proposition’s ban on workers’ rights to collective bargaining violated California ballot measures that limit single subject provisions.

Despite the judge’s ruling, the proposition remains in effect. The Protect App-Based Drivers & Services Coalition (PADS) and other committees and companies in favor of Proposition 22 plan to appeal the ruling to keep it in effect. However, other organizations, like the “No On Proposition 22” coalition, are fighting against those in favor and working to have copycat bills in other states overruled.

What are the pros and cons of Prop 22?

As previously mentioned, Proposition 22 would give rideshare companies the right to classify their employees/drivers as independent contractors and guarantee things like minimum wage, occupational benefits, and more. However, there are some concerns in regards to the effect this initiative could have on would-be employees.

The pros and cons of Proposition 22 include:

PRO: Drivers will have guaranteed minimum earnings, calculated at 120% of minimum wage.

CON: Earnings are based on a driver’s engaged time and do not cover the time spent waiting for a service request.

PRO: Drivers will receive a 30¢ reimbursement for engaged miles.

CON: Reimbursements will not be given for gas, maintenance, cleaning, or necessary PPE (i.e., disposable face masks, sanitizer, etc.).

PRO: Employers will subsidize 41% of healthcare at a weekly average of 15 hours (engaged time). At 25 hours or more, employers will subsidize 82%.

CON: On average, ⅓ of a driver’s time is spent waiting for a service request, meaning it could take at least 20 hours to reach the 15-hour requirement.

PRO: Rideshare companies are required to provide occupational accident insurance (with coverage equaling at least $1 million), automobile liability insurance (with coverage equaling at least $1 million), and disability payments. Accidental death insurance will also be made available to the driver’s spouse, children, and/or other dependents.

CON: Insurance coverage and disability payments will be dependent on a driver’s engaged time. For instance, if an accident occurs while the driver is awaiting a service request, the coverage may lapse. Regarding disability payments, the driver will only receive 66% of their average weekly earnings (calculated from the month before the sustained injury).

In addition, rideshare workers would not have access to paid paternal/family leave, paid sick leave, or unemployment compensation or benefits with Proposition 22. However, there is no way of knowing whether or not this will become an amendment in the foreseeable future. The Legislative Analyst’s Office also said that with the passing of Proposition 22, app-based companies wouldn’t be forced to pay their employees as much, which would keep fares and fees low for customers.

How to Identify When a Clutch is Failing

5 Signs of a Bad Clutch

For heavy-duty trucks, the clutch plays a crucial role in the rig’s full functionality. The mechanical piece acts as the link between your engine, transmission, and driveshaft and allows drivers to shift between gears while hauling freight. The clutch also optimizes your engine’s performance, maximizes your rig’s fuel economy, and helps drivers achieve top-notch safety, when properly maintained.

While most clutches are designed to withstand long hauls and excessive use, these mechanical links are not indestructible. The fact is, at some point in your driving career, you’re guaranteed to replace a clutch or two. How often you replace them depends on several factors, including how well you operate the equipment and the amount of maintenance you put into it—but you’ll still replace the piece, eventually.

Signs of a failing clutch and how you can fix it.

As previously mentioned, the life of a clutch can vary depending on the application, hauling frequency, and the weight of your cargo; even the amount of traffic you face can have an effect. And while some modern rigs offer a maintenance light for the clutch, older rigs don’t have the luxury. So, how do you determine a failing clutch before it becomes a dangerous problem?

Here are the most common indicators to listen and feel for when determining the state of your clutch:

1. The engine is running fast, but the rig is moving slow.

When it feels like your engine is running faster than your rig, you may be experiencing “clutch slippage.” This issue occurs when the clutch’s ability to generate friction is compromised.

The issue is, the clutch relies on this friction to turn the flywheel, and without it, the clutch has to work harder to produce less energy, resulting in the engine running harder than your truck. This could also cause your engine to be noticeably louder when accelerating.

So, what causes slippage, and how do you fix it? Generally, slippage is caused by wear and tear on the clutch or heat damage from “burning the clutch.” The problem can also be due to an oil or transmission leak, or occur when the pressure link is damaged or does not transmit adequate force due to a blockage or rust damage.

2. When the clutch pedal is pressed, you hear a squealing or chirping.

If your clutch pedal is squealing or chirping, it’s likely due to an issue with the throwout or pilot bearing. To avoid this problem, regularly check the parts and keep them well-lubricated to avoid frequent rubbing.

3. The pedal is noisy, sticky, spongy, or loose.

If you notice the pedal making any abnormal noises or feeling sticky/spongy, you may be looking at an issue with the clutch fork. This problem can be due to inadequate lubrication or general deterioration and can be determined/fixed by a technician.

If the pedal squeaks or feels loose, you may need to replace the pedal’s spring or another ill-fitting component.

4. The clutch won’t engage.

A few different things could cause this issue of a sticky or unresponsive clutch. For starters, there may be an issue with the clutch pedal not being compatible with a specific part or component. However, you could also be looking at a problem with the clutch disc or pressure plate.

The possibilities for this problem are somewhat endless, so it’s best to have a technician run further diagnostics tests to determine the cause and solution.

5. You hear a grinding noise.

This grinding noise is often called a “dragging clutch.” While this could result from an issue with the pressure plate or throwout bearing, it’s typically a problem with the release mechanism.

When you press the clutch pedal, your clutch should release so you can change gears without grinding them. However, if there’s a problem with the release, the gears will create a grinding sound and, in turn, damage your transmission.

You will most likely need a new clutch assembly to resolve this problem, but you should have a technician inspect your pedal to ensure all components are correctly installed.

If you notice any of these signs, it’s vital to make an appointment with a trusted mechanic or service technician. They will be able to diagnose your clutch’s issue properly and determine which parts and/or repairs you may need.

How to optimize the life expectancy of your clutch.

Whether you’re replacing parts of your clutch system or replacing the entire mechanism, every truck driver will eventually be forced to replace their clutch. However, with proper maintenance and regular inspections, you can optimize the life and performance of your clutch and keep on trucking.

Below are the best ways to keep your clutch in top shape:

1. Don’t ride the clutch.

You’ve probably heard this statement before, but it’s essential for a long-lasting clutch. After a long haul, it can be easy to rest your foot on the clutch pedal or leave it halfway down to make changing gears more manageable. But, in the long run, the minimal amount of comfort you will achieve is not worth the excessive amount of damage to your clutch and transmission.

Bottom line, when you aren’t shifting gears, keep your foot off of the clutch. Instead, use the dead pedal or the floor.

You should also avoid using your clutch as an alternate brake or as a way to prevent your rig from rolling back on hills.

2. Be sure to shift gears properly.

To properly change gears, only shift after you’ve fully engaged the clutch and keep the pedal down until you’re in gear. Once you’re where you want to be, come off of the pedal quickly and smoothly.

It’s vital to the longevity of your clutch to make decisive changes. And while a few modulations may be necessary when coming out of first gear, it’s essential to not leave your clutch in between the “engaged” and “disengaged” positions for too long.

3. Always park in neutral.

When parking your heavy-duty truck, be sure to park while in neutral. To do so, put your transmission in neutral, then apply your parking brake. After that, shift into first gear if facing uphill, or reverse if facing downhill. Following these steps will not only prevent your rig from rolling away but will also ensure that there is no excess pressure on your clutch.

How a repair loan can help.

When your truck breaks down or needs parts and repairs, your income and livelihood are put at risk. And if the repairs or parts required aren’t within your budget, you could be facing quite the predicament. Fortunately, Mission Financial Services can help by offering specialized commercial vehicle repair loans that assist in covering the cost of repairs and help get your rig back on the road.

To obtain a commercial vehicle repair loan, you will need to complete and submit three online forms, including a credit application, vehicle spec sheet, and sales order.

Get Started Today

Q&A: Trucking Expert Talks Inventory Shortage

What began as whispers of a potential vehicle shortage quickly became a leading source of concern for fleet owners and operators. This looming threat of operations being forced to shut down over inevitable repairs and mishaps or a lack of vehicles to move freight is troubling in these times of high demand. And with so much uncertainty regarding the issue, many in the industry are left with unanswered questions and concerns.

To answer the main questions surrounding the inventory shortage, we sat down with Charles Smith, Regional Business Development and Marketing Manager for Mission Financial Services. As an auto finance institution operating across the country, Mission Financial has provided Smith a unique opportunity to see behind the curtain on many of the industry’s pressing topics.

Exclusive Interview with Charles Smith

Q: What has been the most significant hardship for Mission Financial Services during the shortage, and how have you dealt with it?

A: The biggest hardship here at Mission Financial is the lack of applications being funded.

With the current situation, dealers just don’t have the inventory to meet the demand of the customer, which trickles down to financial institutions that are used to funding deals on a regular basis. One way we’ve dealt with this is to keep knocking on doors and letting my customers know that Mission Financial is still here for them.

Q: What has been the most considerable hardship for the dealers and/or others in the industry?

A: The biggest hardship for my dealers would be the lack of inventory. Now, the supply can’t keep with the demand. Not only is the trucking industry feeling the heat, but other industries are as well.

Q: Was COVID-19 the only cause of the vehicle shortage?

A: Yes, COVID-19 was the driving force of the shortage. When the pandemic hit China, the production of automotive microchips experienced a major decline, because that is where they are produced. Without these chips, manufacturers can’t produce new units, which is why we are where we are today. What we are currently experiencing is the result of a global domino effect.

Q: When and how do you think it will end?

A: Unfortunately, at the moment, I see no end in sight. According to recent market analysis, it may be another year before we can see some relief from this devastating virus. However, some of my dealers remain optimistic that we could feel some ease by the second quarter of 2022.

Q: Any advice for drivers, fleet owners, and other industry members?

A: To my drivers out there: keep your equipment well maintained so you can keep moving freight until you get the new rig you’ve probably already ordered. Plus, with spot rates at an all-time high, there’s a lot of money to be made out there. Just keep on truckin’ because we need you.

How to Keep Your Truck on the Road

The Importance of Semi-Truck Repair Loans

Recently, the trucking market has taken a nosedive due to the severe vehicle and parts shortage that has been wreaking havoc since 2020. With the current inventory not meeting industry demands, the market for these vehicles has become insanely competitive. In fact, in July of this year, Class 8 vehicles and other heavy-duty trucks sold rapidly while their prices spiked at a year-over-year rate. According to the ACT, unit sales went up by 26.6% compared to last year’s numbers and prices of Class 8 vehicles increased by at least $77,000. Unfortunately, due to the current state of the world, there’s no guarantee as to when inventory or prices will balance back out.

Those who already have a running rig have an advantage over the new drivers entering the buying and selling arena. However, if your truck breaks down and is in need of parts or a serious repair, you may find yourself in the same situation as green truckers.

→ Everything You Need to Know about Annual Semi-Truck Maintenance

The truth about used truck repairs

On average, a single truck driver travels anywhere from 45,000 to 100,000 miles per year. And with working hours and delivery demands regularly increasing, it can be easy to forget about scheduling regular or preventive maintenance. However, for used trucks, care is crucial for keeping your rig on the road, especially amid the current inventory shortage.

It’s also important to prepare and plan for the inevitable repairs that come with owning a used or older truck. As an owner/operator, it’s vital to keep essential tools in your cab so you can solve common repairs on the fly and stay on schedule.

The most common used truck repairs include:

Brake issues
Diesel emissions repairs
Engine overheating
Starter failure
Tire repairs
U-joint failure
Wheel bearings

If you want to be extra careful, be sure to prepare your vehicle for the various seasons and the weather conditions that come with them, like high temperatures in the summer and icy roadways in the winter.

→ 5 Most Common Truck Problems and Repairs

The impact of the vehicle shortage

As previously mentioned, since the start of the COVID-19 pandemic, automotive manufacturers and parts manufacturers have been battling a labor decline and production delays brought on by the effects of the coronavirus. These obstacles eventually caused a massive vehicle and parts shortage that still affects dealers and consumers globally. Once cases declined and businesses began reopening, manufacturers assumed they’d be able to ramp up production and compensate for the lack of product. However, they did not anticipate their suppliers being hit by a wave of various natural disasters, further causing more closures and setbacks. Dealers saw no end in sight and began offering extreme incentives and personalized financing plans to move stagnant inventory, not realizing they’d be left with virtually nothing in the way of new and used stock. This move ultimately solidified the shortage that companies and consumers are still battling to this day.

Unfortunately, this shortage has had a significant effect on the trucking industry. Newer truck production is still moving at a snail’s pace due to a large raw materials shortage, and truck dealers are experiencing drops in sales of up to 0.6% month-over-month. Under these circumstances, drivers could sell their used rigs and receive top-dollar, but it would be unwise if they plan on using that money to buy a new or used truck, seeing as how neither really exists at the moment. Shippers are also continuing to pay higher premiums for transportation due to the disruptions in the supply chains. The DAT suggests that spot and contract rates are higher than they’ve ever been while freight volumes decreased by about 8%. To top it all off, drivers are experiencing port congestion, unloading delays, a tighter intermodal capacity, and more freight than the commercial trucking industry can handle, especially as the holidays move in.

→ Where Did All of the Trucks Go?

How semi-truck repair loans can help

As a truck driver, your vehicle is your lifeline. When it breaks down or needs parts and repairs, your income and livelihood are on the line. And if the repairs or parts required aren’t within your budget, you could be facing quite the predicament. Fortunately, companies like Mission Financial Services can help by offering specialized commercial vehicle repair loans. These loans assist in covering the cost of repairs and help get your rig back on the road.

With older or used vehicles, you’re more likely to face frequent, costly repairs than newer trucks, especially if you’re operating at a higher capacity. That’s why it’s crucial to have a personalized repair loan at the ready to protect your investments and income.

For added protection, companies like Mission Financial Services offer a multitude of specialized loans and financing offers, including:

Repair loans
Commercial vehicle title loans
Personal loans
And refinancing options

→ What are your options to cover the cost of semi-truck repairs?

Why wait?

To obtain a commercial vehicle repair loan, you will need to complete and submit three online forms, including a credit application, vehicle spec sheet, and sales order. You will provide your contact information, your past and present employer, income specificities, and any previous financing information for your credit application. The vehicle spec sheet will require information like make, model, vehicle I.D. number, and mileage so you can obtain the best loan that fits your exact needs. The sales order will show the sales price of your commercial vehicle as well as its taxes and fees.

APPLY NOW

How Much Do Truck Drivers Make?

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Top 10 Truck Driving Jobs

Take a moment and think, what is one industry that has been behind the success of every other business in the world? That’s right, the trucking industry.

There’s no denying that the profession of trucking has and continues to be one of the largest contributors to the American economy. Without it, millions of hardworking individuals would be without a job, and other businesses, like Amazon and Walmart, would collapse due to limited resources and the inability to ship. Different vital industries like construction, oil and gas, and automotive would also suffer greatly without trucking. And without the success of these enterprises, America’s economic infrastructure would ultimately give way.

-> What Would Our World Be Like Without Truck Drivers?

So you see, truck drivers indeed are the backbone of our society, the oil that keeps the machine running smoothly, if you will. Fortunately, the essential occupation doesn’t seem to be going anywhere, making it one of the most secure jobs in the world. The only thing left to do is pick the type of driver you would like to be. No pressure.

What are the Different Types of Truck Drivers?

Flatbed Truckers

Built differently than traditional tractor-trailers, flatbed trucks typically require additional training or education to execute safe and effective operations. On top of that, their drivers must thoroughly understand what they will be hauling and how to secure it properly since flatbed loads must be secured differently from tractor-trailer cargo. Typical freight includes vehicles, military vehicles, oversized freight, and oddly shaped cargo that doesn’t fit well on other truck types. Fortunately, since flatbed trucking is more demanding, it typically offers higher pay than different driving positions.

Dry Van Truckers

Dry van trucking is an excellent position for those entering the occupation with minimal experience. These drivers are typically responsible for single trailer rigs that contain items like non-perishables and dry goods. A bonus for this title is that drivers are often not accountable for unloading upon arrival.

-> Buying vs. Leasing a Semi-Truck: An Owner Operator’s Guide

Tankers

If dry goods aren’t your thing, you may be interested in becoming a tanker. Tankers primarily transport a variety of liquids, including gasoline, chemicals, and even milk. However, there are times that tankers will also be responsible for hauling dry products like cement or sugar. But in some cases, these drivers could also be dealing with highly explosive chemicals and gases. Since moving this delicate cargo can be, in some ways, dangerous, special training is required before starting this job.

Freight Hauler

Otherwise known as commercial truckers, freight haulers specialize in moving cargo that does not fit into a specified category like reefers and tankers. These drivers need to be flexible and good with change.

-> Post-Pandemic Era for the Freight Industry?

Refrigerated Freight (Reefer Drivers)

Refrigerated freight truckers have a pretty strenuous position. They are responsible for hauling loads that need to be kept at specific temperatures, like food, meats, highly perishable goods, medical products, and body products. That all being said, it’s crucial that reefer drivers know how to regulate the trucks’ temperatures, monitor for fluctuations, and adequately store freight for best refrigeration and temperature stability. Like flatbed drivers, reefers are often paid more than other types of drivers due to the amount of responsibility they are charged with.

Local, Regional, and OTR Drivers

Local, regional, and OTR drivers are labeled or defined by the mileage they acquire. While local drivers only haul within a city, regional drivers often move freight throughout an entire state or metropolitan area. For OTR drivers, they have the potential to be given routes across the United States.

-> Why Owner/Operators Should Run Hard This Holiday Season

Auto Haulers / Car Haulers

Auto haulers, are given special trailers that can hold an abundance of various automobiles. Where they are taking these automobiles varies. Drivers may be transporting from auctions, local vehicle lots, or ports; you name it. With tens of thousands of dollars on the line, you better believe this job comes with a more than fair wage.

Hazardous Materials Drivers

The typical hazardous materials driver will haul fuel, compressed gas, chemicals, waste, and other flammable/combustible materials. It’s crucial for drivers to be knowledgeable about the contents they’re hauling and how to handle them safely in the event of an emergency. To ensure everyone’s safety, special training, certifications, and/or permits will be required.

-> 5 Things Owner/Operators Should Do to Achieve Success

LTL Freight Truckers

LTL, or Less Than Truckload, drivers move smaller freight and don’t need to go as far as standard shipments. With their cargo being on the smaller side, they will typically have multiple stops to make in one day and are generally responsible for unloading their own freight.

Low Boy

The trailers that sit close to the pavement and the truckers who drive them are low boys. These rigs sit lower to accommodate taller equipment or cargo and provide stability with a lower center of gravity. In most cases, these trailers are hauling overly large freight, like manufactured homes, construction equipment, etc. However, these low boys don’t fly solo. They often are escorted by vehicles with flashing lights and signs that read something like ‘Caution’ or ‘Oversized Load.’

Which Type of Truck Driver Should I Choose?

It’s clear that trucking is not only a high-demand profession, but it is a career that offers flexibility, the opportunity to travel, and the chance to meet and develop camaraderie with fellow drivers. Regardless of your age, gender, or educational background, your chances of achieving success are just as probable as the next. Best of all, the variety of job titles allows you to choose an occupation that best suits your life.

Before deciding, you’ll want to consider personal factors such as your location, risk tolerance, situation, and experience. For example, if you’re new to the industry, you won’t want to dive headfirst into something like transporting hazardous materials. There is a great likelihood that you will hold multiple positions with various skill requirements throughout your career. So, use this list as a guide to discover where to start or where to go next.

Want to know how much truck drivers make? Download our infographic!

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