Uber changing app to avoid reach of California’s new gig workers law
For the past month, the ride-hailing company Uber has been piloting new features in California, such as letting drivers set their own payment rates, in hopes it will avoid the reach of a new state law threatening to reclassify its contractors as full-time employees.
But workers – and legal experts – say they aren’t fooled.
“This is a smokescreen to make it look like we have more say than we do,” said Steve Gregg, a California driver who has completed more than 16,000 rides for Uber and Lyft over the past three years. “They are trying to manipulate their public image.”
On 1 January, California enacted a law known as AB5, which changes the way contract workers are classified. It implements a three-part standard for determining whether workers are properly classified as independent contractors, requiring that 1) they are free from the company’s control; 2) they are doing work that isn’t central to the company’s business; and 3) they have an independent business in that industry.
As a means of complying, Uber now allows drivers to get more trip information up front before accepting a rider’s request, including travel time, distance, destination and estimated fare. Drivers can now reject ride requests without penalty.
The change gives drivers the illusion of more autonomy, but “seems like a trick”, said Veena Dubal, an associate professor of labor law at University of California-Hastings. If a driver sets a fare too high, they may end up waiting longer for a passenger. If they set it too low, they won’t be able to cover their costs.
“This is incentivizing a race to the bottom”, Dubal said. “I am skeptical this is good for workers.”
Nor will it help Uber drivers to pass the three-part test at the center of AB5, Dubal said, as the core of Uber’s business will still be driving. Drivers will thus fail part two, which declares a worker must be “doing work that isn’t central to the company’s business” in order to be a contractor.
Instead, she suggested these changes may lead customers to believe drivers have more autonomy than they do, which is key ahead of the ballot measure Uber has pledged to introduce in 2020 to counteract AB5.
Uber drivers have long asked for more freedom to cancel rides, but the changes are too little too late, Gregg said.
“Nothing has really changed, but Uber makes it as convoluted as possible to make it seem like they have changed,” he said.
Since 21 January, Uber has been testing an additional feature in several cities that allows drivers to set their own payment rates, in an effort to prove its employees are contractors with freedom to set their own wages.
Under this new bidding system, Uber sets a base fare and drivers are then able to increase the rate in 10% increments, to reach up to five times the base price of the ride set by Uber. Uber then matches each rider with the driver who has set the lowest price. Drivers who have set higher fares will be matched as more rides are requested.
It is currently being tested only at airports in Santa Barbara, Palm Springs and Sacramento, a spokesman for the company said. He said these changes were meant to “enhance drivers’ control” over their earnings to address AB5.
“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,” he said. “We’re now doing an initial test of additional changes which would give drivers more control over the rates they charge riders.”
Uber has also introduced measures on the rider side, showing them a range of prices based on distance and time when hailing a ride rather than the set rate provided in the past. They will also be able to select “favorite” drivers to be matched with again in the future.
“This has much more to do with public perception than whether it will actually have a legal impact on AB5,” Dubal said. “The intention is to create confusion among the riding public and among drivers.”