Skip to content

Uber drivers in California can now set their own rates on select airport pickups

Jan. 22, 2020
4 min read
Uber drivers in California can now set their own rates on select airport pickups
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

California Uber drivers have officially started to test setting their own UberX fares.

This change comes after the state of California introduced the Assembly Bill 5 (AB5) law, which classifies individuals previously considered contract workers as employees. In an effort to keep drivers categorized as contract workers, Uber has introduced a new fare-setting system that allows them to pass the "ABC test" set by Bill AB5.

As of Jan. 22, drivers in Palm Springs, Sacramento and Santa Barbara are testing a new fare-setting system on airport pickups. According to The Verge, Uber reportedly wants to test this new pricing approach in smaller cities before deciding whether to roll it out statewide and to larger cities, like Los Angeles.

What's changed?

Drivers will be able to increase ride prices in 10% increments, up to five times the fare originally set by Uber. Essentially, this creates a bidding system where the drivers willing to drive for the lowest price will be matched with riders first, whereas those who are charging higher prices will be matched as demand increases.

Related: You could now wait over an hour for an Uber at LAX — here's how I avoided the headache

Another change impacting riders in the test California locations is that fares listed when you request a ride are a range, not an exact number.

In addition to the fare-setting change, Uber has made some changes for California drivers. For one, drivers will now be able to see trip request information, such as pickup, trip time, distance and destination, prior to accepting the ride. This change allows drivers to see what they can expect to earn from the ride. Based on that, drivers can reject rides without penalty but that could make it more difficult to get a ride.

Passengers will also be able to add drivers to a list of "favorites," which gives them priority when it comes to future ride reservations. Unfortunately, with the new fare system comes the loss of Uber Rewards benefits, such as price protections on certain routes and flexible cancellations.

Related: The best credit cards for Uber

Sign up for our daily newsletter

Why did these changes happen?

The purpose of the bill that contributed to these changes was to give contract employees, like Uber drivers, increased protections like minimum wage, sick days, workers' compensations and unemployment benefits. Uber's goal is to continue to help connect riders and drivers, thus, keeping drivers as independent contractors.

In order to avoid the new AB5 law that would require Uber to pay workers significantly more in benefits, it has to pass the "ABC test," which dictates that the individual is:

  • Free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and, in fact,
  • The worker performs work that is outside the usual course of the hiring entity’s business
  • The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity

Uber's new fare-setting system allows the company to comply with the new law by giving drivers more independence. Uber has expressed concerns about the new bill. "AB5 threatens to restrict or eliminate opportunities for independent workers across a wide spectrum of industries," said an Uber spokesperson in an emailed statement.

For more TPG news delivered each morning to your inbox, sign up for our free daily newsletter.

Bottom line

Uber's new fare-setting system is still in the experimental phase in select cities. Time will tell what the service's long-term approach will be to comply with this law.

Are you located in any of these three testing areas? We'd love to hear your thoughts about the new changes.

Featured image by (Photo by shutter_o/Shutterstock)

Top offers from our partners

How we chose these cards

Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
See all best card offers

TPG featured card

Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review
Apply for American Express® Gold Card
at American Express's secure site

Rewards

3 - 4X points
4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.

Intro offer

60,000 bonus points
Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

Annual Fee

$250

Recommended Credit

670-850
Excellent/Good
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees
Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees