Following legislation to reclassify Uber’s independent drivers as employees, California was the first state in the US to offer better protection for VTC drivers since January 1, 2020. That’s why, the mobility giant Uber has decided to launch a new feature on its application. Indeed, drivers will now be able to set their own price, multiplying up to 5 times the price announced by Uber. Zoom on this new method engaged by the firm and the various opinions.
Uber, a group often at the heart of the controversy
In recent years, the Uber Group has been controversial on a number of issues. From sexual assaults, to the Brussels driver recently filmed drinking during his ride, Uber has had to deal with several polemics. In addition to this, there are now issues related to the status of their drivers. In different countries, there have been a lot of protests on this issue. Considered as self-employed person, Uber drivers are currently not categorized as real wage earners.
A vision reviewed by the California senate last September. Indeed, the Senate passed a bill, called AB5, aimed at forcing Uber-type platforms to grant employee status to all their drivers. “A person who provides work for remuneration must be considered an employee and not a self-employed worker,” explains the new law. As of January 1, 2020, Uber is therefore obliged to impose employee status on all its VTC drivers. Consequently, it include rights as social protection, minimum wage, unemployment, pension and many others…
Uber’s counterattack on their drivers
In order to demonstrate theirs drivers’status of self-employed worker, Uber decided to add a new feature to their application. Indeed, since January 21, the group has been allowing drivers to set their own prices. Currently in the test phase, only drivers transporting passengers from Californian airports will be able to set their own prices. A price that is up to 5 times higher than Uber’s tariff ! This means that VTCs are completely free to choose their ride costs. On the other hand, the increase can only be made in 10% intervals. Please note that fares can be increased or decreased. Currently, the price increase by Uber is managed by computer, in order to automatically identify high demand. Thus, the implementation of this new feature, will allow the customer to choose the highest bidder driver.
Rather mixed opinions from drivers and users
On the driver’s side, two sides are clashing. Indeed, some are eagerly awaiting the passage of this law in order to be able to take advantage of the rights of employees. While others, much more sceptical, are afraid of being locked into this status. One of the biggest constraints would be that they would no longer be able to work the hours they want, or to be paid by the hour and not be able to work overtime as they wish. Added to this are the tedious administrative procedures due to the status of employee. Despite the adoption of this law, the protection of consumer interests also plays an important role. According to Lorena Gonzalez, the California Democrat who initiated the proposal, “As legislators, we will not allow companies that play the system in good conscience to continue to save money on the backs of taxpayers and workers”.
On the contrary, for Lyft, the other american company also targeted by this bill, Uber’s new functionality could strongly serve the end customer. According to them, “users may have to pay more and wait longer, and some areas may no longer be served at all. This would be particularly devastating … in areas that are poorly served by public transport or less densely populated”. To address this potential problem, Uber aims to introduce a new customer experience enhancement feature in the near future. A feature, soon to be available throughout the United States, that would allow users to bookmark some drivers. Passengers will therefore be able to choose drivers that they have already validated. Thus improve the offer and safety of users.
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January 11, 2021