Uber testing new feature that lets California drivers set their own fares

midian182

TechSpot Editor
Staff member

Earlier this month, Uber started making changes to its app in California to better comply with Assembly Bill 5, or AB5, which forcefully reclassifies many gig workers in the state as employees, entitling them to benefits they would normally miss out on, such as sick leave, minimum wage, and unemployment insurance. It appears the latest feature is also in response to AB5.

From Tuesday morning, drivers operating around airports in Santa Barbara, Palm Springs and Sacramento will take part in a scheme that lets them increase fares in 10 percent increments, reaching five times Uber’s base price for the ride, according to the Wall Street Journal. The feature works like a bidding system, in which Uber matches the drivers with the lowest fares to the first customers. Those with higher fares will be matched with customers as demand increases.

If the experiment is successful, Uber will reportedly roll it out to larger cities in California, such as Los Angeles and San Francisco.

Uber hopes that the feature will give its drivers more autonomy, thereby supporting its claim that it is a technology company and not a transportation firm. It follows other changes designed to comply with AB5, including an alteration to its pricing model in California (customers are given an estimated price range), providing drivers with more information about a fare before accepting a ride, and not penalizing drivers for rejecting a ride request.

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mbrowne5061

TS Evangelist
I like the concept of letting drivers bid, but let them underbid as well. Let Uber set a 'suggested' bid rate, or just show a current average of the local bid rate, and let the drivers adjust as they please. Then, Uber can take a percentage off the top.
 

wiyosaya

TS Evangelist
I like the concept of letting drivers bid, but let them underbid as well. Let Uber set a 'suggested' bid rate, or just show a current average of the local bid rate, and let the drivers adjust as they please. Then, Uber can take a percentage off the top.
As I see it, that might just bring the race to the bottom to uber if they allow drivers to underbid.
 

mbrowne5061

TS Evangelist
As I see it, that might just bring the race to the bottom to uber if they allow drivers to underbid.
That is the idea behind free-market economics, yes. Conversely, as prices dropped, fewer people would drive, decreasing supply, stabilizing prices.