In a move that will give more flexibility to its drivers, less predictability to passengers and potential legal protection for its parent company, Uber now is letting California drivers set their own rates — within limits.
In a “driver announcement” on its blog, Uber wrote, “If you drive in these cities and choose to not change your multiplier, you will still get the benefit of default time and distance rates, as well as surge fares. Current time and distance rates are not changing in your city. You don’t have to do anything to stick with ‘Auto-pricing’, which is the default setting in the Driving preferences menu.
“But if you do choose a new multiplier, as usual, riders will be able to see an upfront estimate of their fare before they request a trip. If they are matched with a driver whose fare is set higher than the upfront estimate, they will have the option to accept or decline the offer and search for other drivers in the area,” the blog says.
Uber’s move comes as the company confronts a California law called AB5 that took effect this year. The measure makes it harder for companies to classify workers as independent contractors rather than as employees. As a poster child for what has become known as the “gig economy,” Uber has been the target of numerous class-action lawsuits alleging its policies unfairly misclassified drivers as contractors while treating them as employees.
The new California system, which was tested in several cities before its statewide implementation this week, allows drivers to charge up to five times the base Uber rate for services.
Some observers have questioned whether drivers will earn considerably more than they currently make or avoid increasing rates due to competition.
California voters will get their say on whether ride-share drivers working for companies such as Uber should be considered employees this fall. Proposition 22 on the November ballot would, if adopted, exempt big companies from the new gig-economy regulations.