Original title: Frontline丨Uber Compromise: Online ride-hailing drivers can set their own prices and are not penalized for refusing orders
Under pressure from California's new work laws, Uber is constantly compromising. According to the Wall Street Journal, Uber is testing a new policy in California that allows drivers to set their own ride prices under certain circumstances. Drivers can increase the price specified by Uber by 10%, up to 5 times the original taxi price.
California's Act No. 5 passed on September 18 last year stipulates that online ride-hailing drivers should be regular employees rather than independent contractors, which means Uber/LyftAnd sharing economy companies need to provide drivers with benefits such as minimum wage guarantees, overtime pay, unemployment insurance, and workers' compensation.
According to The Verge, some experts estimate that employee labor costs are 20% to 30% higher than contractors' employee costs, which is equivalent to spending hundreds of millions of dollars on Uber and Lyft every year. This time, Uber hopes to allow drivers to earn more income independently by adjusting the new pricing policy.
Uber has continued to fight. Over the past five years, the company, together with other online car-hailing companies, has persuaded the governments of more than a dozen other states to pass laws that classify drivers as contractors. Next, Uber will also jointly invest 60 million US dollars with Lyft to support California's voting plan and seek to push ahead with legislative amendments.
However, at present, the bill is a foregone conclusion, and Uber has to compromise more rights for drivers in order to ease the conflict.
Previously, Uber also allowed California drivers to obtain information such as travel time, distance, destination, and estimated fares in advance. Drivers can also refuse any ride requests without being penalized; California drivers will also no longer receive the exact price, and the final price depends on the actual time and distance; passengers can also set specific drivers as “favorites” so that drivers can get repeat customers again.
New York is the city with the largest market share for Uber and Lyft. New York City recently passed regulations setting minimum wage for drivers and has also re-suspended new rental vehicle licenses. This means that Uber and Lyft cannot continue to expand in New York; they can only maintain the size of their current vehicles.
Not only is it based in the US, Uber is under tremendous policy pressure overseas. Not long ago, local governments in London, Colombia, and Germany all filed lawsuits against Uber. The conflict is due to Uber's failure to handle competitive relationships with traditional taxis and local online car-hailing platforms until now, when it landed there, and there are also hidden safety issues.
Bradley Tusk, president of Tusk Ventures, an early investor and advisor to Uber, put it bluntly, “The domino effect is not only possible, it's guaranteed.” Until Uber becomes truly profitable and is recognized by investors in the secondary market, Uber's open and secret battles with local authorities may even intensify in the future.
The advantage of online car-hailing over traditional cruise taxis is that prices are more transparent and cheaper. The platform, as a third party, intervenes in management, and can handle drivers more quickly and directly when they pick orders and refuse to load. However, when Uber is pressured to make adjustments for drivers, the cost is that the user experience has been sacrificed, and users may not continue to pay for Uber's compromising behavior in the future.