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Uber Is Testing A Feature That Allows Drivers To Set Their Own Fares

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Uber Is Testing A Feature That Allows Drivers To Set Their Own Fares

Uber drivers are now literally “in the driver’s seat” when it comes to their pay. 

The company is testing a new feature in California that allows some drivers to set their own fares, according to the WSJ

Starting this week, drivers who drive passengers from airports in Santa Barbara, Palm Springs and Sacramento will be allowed to charge up to five times the fare Uber sets on a ride. Uber confirmed the new feature in an e-mail and said it “would give drivers more control over the rates they charge riders.”

Uber has made numerous changes in the way it works in California in response to Assembly Bill 5, which requires the company to treat workers as employees instead of independent contractors. Uber has argued in the past it is just the technology platform that connects drivers with riders, but at least 2 lawsuits have been filed alleging that Uber has misclassified drivers. 

Meanwhile, the authors of AB 5 have encouraged some of California’s biggest cities to enforce the statute. 

The fare test is one of several measures the company has taken in response. Uber has also capped commissions on rides across California and allowed drivers in the state to see where riders were going, allowing them to choose which rides to pickup and which ones to leave. 

Uber’s latest changes set up a bidding system that allows drivers to increase fares in 10% increments. The price includes a base fare, time spent and distance covered and there is no limit to how often drivers can raise prices. One a rider pings the app, Uber matches the rider with the driver that has bid with the lowest price. Drivers who set high prices are gradually dispatched as more riders request rides.

The changes give drivers more autonomy, but could obviously have backlash. Higher prices could see riders move to Lyft, which hasn’t made any of the same changes. 

Uber will also allow drivers to set lower prices than Uber’s price and will allow drivers to opt out of surge pricing. Drivers can pick a fare that is as low as 1/10th of the fare Uber sets. 

Harry Campbell, a former Uber and Lyft driver who runs the Rideshare Guy blog for drivers said: “Drivers want to make more money, but now they’re competing with another driver for that money, so it’s a lot more work and a lot more confusing. What happens if drivers start setting fares lower and lower just so they can get rides?”

He continued: “The test program also doesn’t account for quality, because it doesn’t give drivers with better ratings the ability to charge the higher price, as would typically be the case in a free marketplace.”

Lawyers say that allowing drivers to set prices strengthens Uber’s case to keep employees as contractors and not employees. 

Dan Handman, a partner specializing in labor and employment law at Hirschfeld Kraemer LLP’s Los Angeles office said: “It could be a game-changer for that. But whether or not they can also use this to show that drivers are outside their normal course of business is questionable.”


Tyler Durden

Wed, 01/22/2020 – 18:25

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