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Uber Ditches Flat Pricing in California — Will Now Give Estimates

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Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


What a day for rideshare news!

First, Chase partnered with Lyft for increased points and cashback earnings on a dozen credit cards.

Now, Uber will cease upfront pricing for rides in California. Instead, you’ll only receive an estimate when searching for a ride in the Golden State.

Reuters reports the rideshare giant sent an email to customers explaining the changes. (I didn’t receive one — and I live in California!)

Reuters says the change applies to all private rides. But upfront prices will still be provided for shared or “pooled” rides.

As SFGate’s Madeleine Wells notes, “The final price for your ride will be calculated at the end of the trip, rather than before you actually request it.”

So it’s somewhat akin to taking a taxi. (At least you have an estimate of how much to fork over.)

Plus, “drivers won’t get punished for rejecting trips they don’t want to make,” writes Bloomberg (via the Los Angeles Daily News). “Uber included a cautionary note, however, that drivers shouldn’t refuse trips solely to avoid certain neighborhoods as doing so would violate the company’s policy and California law.”

FWIW, I searched for a ride tonight from LAX and Hollywood landmark Dolby Theatre. The estimates weren’t yet in place:

I wouldn’t be surprised if Lyft soon follows suit. Why?

What’s Going on in California?

(“What’s going on in California?” Rhetorical question of the Millenium.)

California Governor Gavin Newsom signed into law Assembly No. 5  (not to be confused with this), which drastically restricts the “gig economy.”

To put it very simply: many independent contractors must now be considered employees based on myriad conditions. (Full disclosure: I’m an independent contractor with several clients and currently dealing with concerns regarding AB5.)

Uber told drivers the company is:

“[S]implifying our fare structure to further clarify the relationship between you and your riders, and Uber’s role as a technology platform.

“Starting this week, Uber’s Service Fee on UberX trips in California won’t be more than 25% of the trip fare and will be shown in advance on your offer card. The final trip fare will be calculated at the end of the trip, and it will be based on the actual time and distance of the trip.

Your trip receipt will show the trip fare, Uber’s Service Fee calculation, and your take-home earnings.”

I’m no lawyer (perhaps one of our many awesome readers who practices law can weigh in on this) and not entirely sure how drivers remain independent contractors under the new law.

I also wouldn’t doubt the changing-to-estimates pricing is an idea to motivate riders to voice protest against the new law.

But, anyway, if you arrive in California and wonder why you’re getting estimates for rideshare, that’s what’s up.

— Chris

 

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Featured image: ©iStock.com/gguy44

Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


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3 Comments

  1. The Sacramento Soviet at it again. Im an independent but the government in CA is becoming so anti-business no wonder everyone is leaving for Texas.

  2. I received the notice and live in California; thanks Newsom for messing up another thing in my life. Use Uber a few times a week have not encountered one driver that was in favor of this in the last few months only very vocal against it, the law reaches a lot further and negatively affects a lot of people, hopefully, will get repealed done the road.

  3. Jackson Adamson

    @Matthew

    But if they move let’s hope they don’t bring along the same voting patterns that got California into the mess it is in. Sure, most blacks and non white latinos (80-90%) will always vote for people who want higher taxes, more regulations and bigger government because it means more welfare, housing and other benefits for themselves at the expense of productive people. But that is only half of the picture. White liberals make up the other half of people in California voting for it and them moving from California because of high taxes and expansive regulations to decent states like Texas will condemn those states if they don’t change their voting patterns.

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