Uber this week announced it’s testing a feature that will allow drivers in parts of California to set their own fares. It’s not doing so out of generosity, but more to try and comply with a new law.
According to the Wall Street Journal, the test means that drivers taking airport fares in Santa Barbara, Sacramento, and Palm Springs can increase their fares by 10 percent in increments, up to about five times what the usual Uber fare would be. Reportedly they can also decrease their fares, so getting a ride will now basically be a bidding war, as riders are algorithmically matched with the cheapest ride. So it’s basically letting the market decide: high fares and long waits for riders, or low fares and more rides?
The reason for the new change appears to exist so Uber can say it’s complying with California’s new gig worker law. AB5, which was signed into law last September, essentially makes it more difficult for Uber to continue to classify its workers as contractors rather than employees. Any company that wishes to employ contractors must first pass an “ABC test” proving the worker is an independent entity that isn’t controlled by the company and doesn’t do the company’s primary work.
Just to be clear, if Uber did classify its workers as employees, it’d have to pay them minimum wage and benefits. Uber later said in a statement it had no intention of reclassifying its employees, adding that driver feedback suggests “flexibility” is what they’d prefer. That perceived reliance on flexibility has become the stick with which Uber and its compatriot companies are attempting to beat back the law.
Uber, alongside Lyft and Postmates, is putting its support behind an initiative that would repeal AB5 while also guaranteeing workers minimum wage and some of the benefits they’d receive if they were employees without reclassifying them. If it really wants to convince people it’s not in the business of employing drivers, not dictating what they can earn from their work would be a decent place to start.
According to WSJ, the new test rolls out in smaller cities with the intention of deploying in major cities later if it’s a success.