Uber is testing a new feature in California, which will allow drivers to set fares for rides, as opposed to accepting Uber’s pre-set prices.
The drivers will be able to increase fares in 10% increments up to 5 times the original Uber preset.
However, there is a catch. Drivers will be entered into a bidding system of sorts. The drivers with the lowest prices win the earliest customers.
In instances where demand is higher, drivers with higher prices will also get riders.
California recently enacted a gig economy law that mandates gig economy firms such as Uber to give their drivers some form of independence.
Related article: Uber Kicked Out of Colombia
The law, which was pushed by labor unions and progressive groups, aimed at establishing a new standard for gig economy workers.
The groups alleged that gig economy workers are incredibly exploited: working in adverse conditions, for unreliable income, and low health and welfare standards.
The new law targets companies such as Uber and Lyft; for whom the drivers are classified as contractors and not employees. Hence, they cannot benefit from employee perks such as overtime, unemployment insurance and workers compensation.
Uber will however continue classifying drivers as independent contractors that they (Uber) connect with riders.
Classifying drivers as employees would cost the company hundreds of millions of dollars a year by forcing it to provide benefits like minimum wage guarantees, overtime, unemployment insurance, and workers’ compensation.
