With the new labor law, Assembly Bill 5 (AB5), in effect, the ride-share company Uber Technologies Inc. has made changes to its app in California. The biggest change to the app is that customers will see a price range instead of seeing an upfront pricing on trips. Other updates include the ability to “favorite” drivers and schedule rides with them as well as adjustments to the Uber rewards program.
On the drivers’ side, flat surge pricing has ended, giving drivers more incentive to drive during busy hours. They can even see how much they will make on each ride, beforehand, which has caused Uber to warn drivers that they shouldn’t refuse trips. Although drivers won’t get punished for rejecting trips they don’t want to make, Uber has warned them that rejecting trips, especially to avoid certain neighborhoods, would violate the company’s policy and California law.
However, even with these changes to the app, Uber has started working on an initiative with other major players in the gig economy, such as Lyft, Postmates, and DoorDash, for the November elections to push back against this law. This initiative aims to reverse AB5 while guaranteeing a minimum wage of $21 an hour and benefits for drivers.
Uber’s new changes to the app, and their policy in California, may be a cause of concern. With no upfront pricing for customers and no flat surge pricing for drivers, prices for California trips may increase as much as 30% due to AB5 and the reclassification of independent contractors as employees.
For more information on AB5 and its effects on independent contractors, you can learn more here.