Uber is leveraging the ability of drivers in California to set their own prices, and may soon eliminate their ability to anticipate travel destinations, Thursday said.
At the same time, Uber and Lyft are hanging on to incentives to recruit new drivers as driving requests increase nationwide as the pandemic eases.
Last year, Uber gave California executives more control over rates and where travel would go as part of its campaign to prove that its executives were independent contractors and that they should not be reclassified as employees under AB5, California’s employment law which came into effect on 1 January. 2020.
As first reported in The Chronicle, Uber acknowledges that the changes have worsened the service because drivers would choose lucrative rides, and so many riders have been waiting much longer for service.
Uber now wants to overturn the drivers’ new freedoms, which it will do in the coming weeks across the country, including in the Bay.
Thanks to November’s proposal 22, AB5 is no longer a concern. Uber and other gig companies spent $ 220 million to Prop. 22, which keeps managers as independent contractors – something that, according to the gig companies, is essential for their business models.
“While these changes gave executives more freedom than any other stock app offers, it also resulted in a third of executives taking down more than 80% of ride requests, making Uber very unreliable in the state,” “Uber said in a statement on Thursday. ‘As the recovery from the pandemic is taking up steam, we want to make sure drivers can get a ride when they need it, and that all drivers get more trips regularly. To that end, we begin to work back on some of the changes. ”
Uber said about 40% of drivers use the name-rate feature, which has enabled them to multiply the base rate by as much as five times. But riders do not like the higher rates. About four-fifths of drivers whose drivers try to ask for more have canceled their trip in the past few months and have not requested a ride on Uber again, the company said.
The result: fewer rides for all drivers, including those who stuck to the base money.
As part of the change last year, California riders saw estimated price ranges for their rides instead of fixed advance prices. It also reduced travel requests, says Uber. Now it will again show a set price for riders.
Separately, Uber said it was spending $ 250 million on incentives to get more drivers behind the wheel.
“In 2021, there are more riders requesting travel requests than there are drivers available to host them. This is a great time to be a driver,” the company said in a blog post.
Many drivers for Lyft and Uber stopped working last year, either because there were not enough rides or because they were afraid of contamination. New federal programs that provided unemployment benefits for the self-employed made it viable.
According to press reports, Lyft also has incentives, such as $ 800 bonuses to return to management and coverage of rental costs.
“As more people are vaccinated and people are eager to move around, we are seeing a huge increase in the demand for rides – which means it’s a great time to ride,” Lyft said in a statement. “We are working to meet this demand, including providing incentives to drivers, who are busier and earn more than before the pandemic.”
It said managers are busier than ever and see higher earnings. Over the past two weeks, drivers in the top 25 markets have averaged more than $ 36 / hour, compared to about $ 20 / hour before the pandemic. Drivers in San Francisco average about $ 35 / hour, compared to about $ 28 / hour pre-pandemic.
“Rideshare volume has reached a new record level for 2021 and was our biggest week since March 2020,” Lyft said in a blog post last week.
“Lyft is the poster child for the reopening, with a ‘springboard-like’ pent-up demand on the horizon, with a much more lucrative model on the other side of a vaccine being deployed to the masses by the summer,” Wedbush wrote. analyst Dan Ives in a research report.
“The companies are working hard to increase the supply side,” said Harry Campbell, a Los Angeles manager who runs the RideShare Guy blog and podcast. “Drivers say they are earning better than the last few years (with) training rides and bonuses.”
Carolyn Said is a staff writer for the San Francisco Chronicle. Email: [email protected] Twitter: @csaid