Uber drivers can now charge up to five times more for rides at three California airports in the company’s latest experiment with the Golden State’s new gig-worker law.
The ride-hailing giant started a program Tuesday allowing drivers to effectively set their own prices above or below Uber’s at the airports in Santa Barbara, Sacramento and Palm Springs.
The test marks the latest effort by Uber to give drivers more flexibility in response to AB5, a California law that raises the potential for Uber’s drivers to be classified as employees instead of independent contractors, which would entitle them to benefits like unemployment insurance. Independent contractors pay their own Social Security and Medicare taxes and insurance, but also set their own hours and determine the rates they charge.
“Since AB5 has gone into effect, we’ve made a number of product changes to preserve flexible work for tens of thousands of California drivers,” Uber spokesman Harry Hartfield said in a statement. “We’re now doing an initial test of additional changes which would give drivers more control over the rates they charge riders.”
Drivers accepting trips at the airports can multiply Uber’s rates for private UberX and UberXL rides by a factor as high as five in increments of 0.1, the company said. Starting next week, drivers can also set their so-called fare multiple below 1, meaning passengers would pay less than Uber would normally charge, according to the company.
Uber will connect a passenger who orders a trip with the driver offering the cheapest price, according to the Wall Street Journal, which first reported on the program. Drivers with higher prices will reportedly be given trips as more riders order them.
Uber said the program will evolve in the coming weeks and months.
The San Francisco-based company has made other adjustments in response to AB5 even as it continues to fight the law, which aims to force app-based firms to pay workers a minimum wage and provide benefits such as sick days.
Uber scrapped upfront pricing for certain California rides this month, meaning passengers only see a price range rather than an exact fare before they book a trip. The company has also begun showing drivers the destinations and fares for trips upfront when they’re deciding whether to accept or reject rides.
Uber and Postmates filed a lawsuit last month to block AB5, which lays out a test for whether workers should be classified as employees or independent contractors. Uber has argued that it is only a platform that connects drivers and passengers rather than a full-blown transportation company.
Uber shares jumped more than 5 percent in intraday trading on Tuesday on news that it sold its Uber Eats business in India to Zomato, a competitor. Uber has been moving trim its money-losing food delivery business amid complaints from investors, who want the company to stop losing money.