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

Jan 22, 2020

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 

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 photo by shutter_o/Shutterstock.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.