A year ago, Uber showed its drivers in California ride destinations before picking up passengers and having them set prices in an effort to prove that the drivers were truly independent contractors. It was part of the company’s strategy to prevent managers from being classified as employees under AB5, the California Employment Act.
Uber now acknowledges that the move has hurt business and is considering leveraging its visible destinations and pricing policies, The Chronicle has learned. The seesaw may disappoint drivers who appreciate the extra control over their work.
The San Francisco company said Monday too many drivers are making lucrative rides and choosing other requests to make the service unreliable. Uber no longer has to worry about proving that drivers are independent contractors, because Prop 22 – the ballot box measure in November that cost Uber and fellow gig companies $ 220 million to succeed – includes their status as non-employees.
“Uber is reevaluating the changes we’ve made in California so we can make Uber more reliable,” the company told The Chroncle.
In January 2020, a few days after AB5 went into effect, Uber made the changes, saying they were “due to new state laws” and warned riders that they could drive harder. AB5 makes it harder for businesses to claim that workers are not employees. It is based on a test that states that employees are employees, unless they work free from a company’s work, are not central to the core business of a company and have their own independent companies in the line of work.
Uber’s goal was to show that drivers have more freedom and flexibility and therefore meet the requirements. Drivers could set their own price as a multiple of an Uber base price, could see where riders were going, and could reject ride requests without penalties. Riders did not see any more prizes before a ride.
Uber argued in court last summer that drivers’ ability to see destinations and set prices means they are truly independent. California and three city attorneys are suing Uber and rival Lyft over the classification of drivers under AB5, in a case that continues but will now only look at conduct before Prop 22 went into effect.
But on the street, the move backfired. A third of California drivers turned down more than 80 percent of their ride requests, making the service unreliable, Uber said this week. About one-fifth of potential passengers in California end up not finding a ride, a seven-fold increase from before. The pandemic has further limited the number of drivers, who now have to grapple with the risk of the virus.
The changes have hurt airports excessively, Uber said. Airport rides have long been a lucrative backbone of the service, and this is where the company hopes to see greater demand as more Americans begin to travel as they are vaccinated.
Uber says the weekly ride percentage for airports in San Francisco and Los Angeles is less than 60%.
Harry Campbell, a manager of Uber and Lyft of Uber and Lyft in Los Angeles, who runs the blog and podcast of The RideShare Guy, said that drivers who work full time would like the additional controls so they can make the most profit .
“To make it work as a full-time manager, you have to be very strategic,” he said. ‘Many drivers (previously) were shocked when they found out they did not know where a passenger would go until they accepted the ride. When Uber added the destination feature, it was a game changer for many drivers. ”
But as a passenger, Campbell said he noticed the service was worse.
Uber gave tweets of boring riders saying they hated negotiating prices, waited longer for rides and were sometimes hijacked at the drop in higher rates, if they did not have a winding space, for example.
“It was a pattern, a little annoying for Uber to give drivers features they want and then take them away,” he said. “This kind of function was something that managers always wanted. I think drivers would be pretty pissed to lose it.
Overall, Campbell thinks the flip-flip could alienate drivers, though Uber is now hanging incentives to attract more people to work.
“It was a pattern, a little annoying for Uber to give drivers features they want and then take them away,” he said. “This kind of function was something that managers always wanted. I think drivers would be pretty pissed to lose it.
Carolyn Said is a staff writer for the San Francisco Chronicle. Email: [email protected] Twitter: @csaid