Uber Won’t Let California Drivers Set Their Own Prices Anymore After Rider Cancellations Increased 117%

Topline

Uber will no longer allow drivers in California to set their own prices after rider cancellations increased 117% over the past year, the latest change to Uber’s service following the passage of Proposition 22, which made ride-hailing drivers independent contractors.

Key Facts

In a blog post, Uber said it is removing the ability of drivers to set their own fare multiplier because “over the last few months, 80% of riders matched with a driver with a fare multiplier above 1x declined the higher fare and did not re-request a ride on Uber.”

Uber implemented the feature last year in an effort to show that drivers were independent enough to be classified as contractors instead of employees.

For riders, Uber will no longer show an estimated price range before requesting a ride, meaning the app will only show a single upfront price.

Uber was reportedly considering nixing a feature that lets drivers in the state see destinations before they accept a ride, the San Francisco Chronicle reported, but that will remain the place for now.

Crucial Quote

“We’ve seen that most riders are simply not taking trips with fare multipliers above 1x or without an upfront price. As California reopens, we need to make changes so all drivers can get more trip requests and riders can count on getting a ride when they request one,” the company said in the blog post.

Key Background

 The question of how much control ride-hailing companies have over their drivers was central to determining whether they are employees under a California law called AB-5 that was passed in 2019 in an effort to make app-based drivers employees, but Uber argued in court that since drivers could set their own prices and see destinations, they were truly independent. But with the passage of Prop. 22, the recently passed state ballot measure keeping gig workers independent contractors, Uber no longer needs to demonstrate how little control it has over drivers.

Source: https://www.forbes.com/sites/rachelsandler/2021/04/08/uber-wont-let-california-drivers-set-their-own-prices-after-rider-cancellations-increased-117/