A year ago, Uber let its California drivers see ride destinations before picking up passengers and let them set pricing in an effort to prove that the drivers were truly independent contractors. It was part of the company’s strategy to block drivers from being reclassified as employees under AB5, California’s gig-work law.
Now, Uber is acknowledging that the move has hurt business and is considering axing its visible destinations and price-naming policies, The Chronicle has learned. The seesaw may disappoint drivers who appreciated that extra control over their work.
Too many drivers cherry-pick lucrative rides and decline other requests, making the service unreliable, the San Francisco company said on Monday. Uber no longer has to worry about proving that drivers are independent contractors, because Prop 22 — the November ballot measure that Uber and fellow gig companies spent $220 million to pass — enshrines their non-employee status.
“Uber is re-evaluating past changes we made in California so we can make Uber more reliable,” the company told The Chroncle.
In January 2020, days after AB5 took effect, Uber made the changes, saying they were “due to new state laws” and warning riders that they might have a harder time finding a ride. AB5 makes it harder for companies to claim that workers are not employees. It relies on a test that says workers are employees unless they work free from a company’s control, do work not central to a company’s core business, and have their own independent enterprises in that line of work.
Uber’s goal was to show that drivers had more freedom and flexibility and thus fit those 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 no longer saw pricing before a ride.
Uber argued in court last summer that drivers’ ability to see destinations and set prices meant they were truly independent. California and three city attorneys are suing Uber and rival Lyft over driver classification under AB5, in a case that continues, but now will look at conduct only before Prop 22 took effect.
But on the streets, the move backfired. A third of California drivers declined more than 80% of their ride requests, making the service unreliable, Uber said this week. About a fifth of potential passengers in California now end up not finding a ride, a sevenfold increase from previously. The pandemic further constrained the number of drivers, who must now grapple with the risk of the virus.
The changes disproportionately hurt airports, Uber said. Airport rides have long been a profitable backbone of the service, and that’s where the company hopes to see increased demand as more Americans start to travel as they become vaccinated.
Weekly ride completion rate for San Francisco and Los Angeles airports is less than 60%, by far the lowest for major airports in the country, Uber said.
Harry Campbell, a Los Angeles Uber and Lyft driver who runs the RideShare Guy blog and podcast, said that drivers who work full time liked having the additional controls so they could reap the maximum profit.
“To make it work as a full-time driver, you have to be very strategic,” he said. “Many drivers (previously) were shocked to find out that they didn’t know where a passenger was going until they accepted the ride. When Uber added the destination feature, it was a game changer for a lot of drivers.”
But as a passenger, Campbell said he’s noticed that the service is worse.
Uber provided tweets from irate riders who said they hated having to haggle over prices, were waiting longer for rides, and sometimes were hijacked into higher rates at the last minute when they had no wiggle room because of a flight to catch, for instance.
Overall, Campbell thinks the flip-flip could alienate drivers, even as Uber is now dangling incentives to draw more people back to work.
“It’s been a pattern, a bit of a tease for Uber to give drivers features they want and then take them away,” he said. “This type of feature was something drivers always wanted. I think drivers will be pretty pissed off” to lose it.