Uber is testing a new feature in California that will allow drivers to set their prices for rides. Previously, Uber will preset prices for the drivers.
According to a report from The Wall Street Journal. The new feature allows drivers to increase fares to up to five times more than Uber’s original price.
the new changes let drivers increase fares in 10 per cent increments, up to five times what Uber sets the base price of the ride. The feature effectively creates a bidding system where drivers with lower prices get the first customers. As demand increases, drivers who have their prices set higher will be matched with riders.
The system will give drivers independence according to the states newly enacted gig law.
The law was enacted by a coalition of progressive groups and labour unions in the Empire State. Their main goal is to push a new standard for gig economy workers.
According to the law, the workers are exploited every single day. They are treated incredibly poorly. Their income is not reliable. Their health and welfare standards are incredibly low. They’re at the whim of these companies that dictate the terms of their work. Hence, the coalition needed to get an AB5 passed in California.
Uber and Lyft are affected by the gig law. The two companies classify the drivers as contractors and not employees. This means drivers are exempted from company benefits such as overtime, unemployment insurance and workers compensation.
The new fare-setting system here is designed to give drivers independence to better comply with the state’s newly enacted gig work law. Uber’s goal is to — despite the new law — continue classifying drivers as independent contractors that Uber simply helps connect with riders. Classifying drivers as employees would cost the company hundreds of millions of dollars a year by forcing it to provide benefits like minimum wage guarantees, overtime, unemployment insurance, and workers’ compensation.
The test is currently limited to drivers who are operating within airports in Santa Barbara, Palm Springs, and Sacramento. Uber reportedly wants to see how it works with smaller cities in California first. Later on, it will decide whether to roll it out statewide to far larger markets like Los Angeles or San Fransisco.