New Uber Pilot Signals Business Model Shift In CA

With the newest of many initiatives to reportedly provide drivers with greater independence as a reaction to the state’s new gig economy law, Uber Technologies Inc. is piloting a function that allows some drivers in California to set their own rates. Drivers who shuttle riders from airports in Palm Springs, Sacramento and Santa Barbara can charge as much as five times higher than the Uber-set fare on the ride per an unnamed source cited in a report by The Wall Street Journal.

The fare test, as well as other recent changes, are reportedly part of the ridesharing firm’s moves to bolster its case that its drivers work with some autonomy. Uber put a cap on its commissions for trips in California earlier in January. And, in December, it let drivers in the state view the destinations of their trips, allowing them to select their journeys. Drivers in the past agreed to jobs without knowing where their ride would end.

The firm has made several changes to its operations as it responds to the passage of Assembly Bill 5 (AB5). The legislation makes firms treat workers as employees who can have sick days, among other benefits, instead of independent contractors if they are controlled by an employer and they pitch in to its usual course of business. Uber, however, has contended that it is a tech platform that links passengers with drivers and is not a transportation firm, so drivers are not a part of its normal course of business.

The news comes after it was reported that Uber was removing upfront pricing and replacing it with estimates in response to the California gig economy law that took effect at the beginning of the year. Reuters saw an email to passengers, as well as drivers, on Jan. 8 telling them that a journey’s final price would be calculated at drop-off “based on the actual time and distance traveled.”

The company reportedly wrote in the email, “Due to a new state law, we are making some changes to help ensure that Uber remains a dependable source of flexible work for California drivers.”