On a recent morning in Santa Monica, California, Sergio Avedian pulled into the parking lot of a Vons supermarket, signed into the Uber driver app, and waited.
At 7:07 am, a ride request came in for a trip to LAX that the app promised would earn Avedian between $9 and $12. He declined it. Another request, again for the airport, for $13 to $17. He declined. Another request, a short, $3 to $4 trip within Santa Monica. Nope.
It went on like this, with Avedian lingering in the parking lot, sipping his coffee, and declining requests from Uber riders as he waited for something he considered worth his time. Thirty minutes later, he got it: A 15-mile ride toward Glendale, near where he lives. Just over an hour later, he dropped his passenger off. She paid $93.51; he pocketed $76.68.
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Avedian has been driving part time for Uber and Lyft for four years, but just two months ago, or anywhere outside California, this sort of strategy wouldn’t have worked.
But in January, in response to a new state law, Uber changed the workings of its driver app in the Golden State, affecting some 395,000 drivers. Drivers can now see where a rider wants to go and an estimated payout before they accept. They are, theoretically, not punished by the Uber algorithm for rejecting too many rides. (Though starting last week, Uber began sending fewer requests to those who reject or cancel the vast majority of their ride requests.) Driver bonuses are structured differently. And around three California airports, Uber is experimenting with allowing drivers to choose their own fares.
In response, some savvy California drivers have changed their behavior. “I’ll just sit down and cherry-pick,” says Avedian. “I’m doing fewer rides and making more.”
Gabe Ets-Hokin, a writer and ride-hail driver around San Francisco, has embraced the same strategy. “When it became clear to me that Uber was not going to fire us for excessive cancelation or for declining rides, I started doing it whole hog,” he says.
A spokesperson for Uber said that the changes in the app were prompted by Assembly Bill 5, a new California law that attempts to clarify the difference between an independent contractor and an employee. “Gig economy” companies like Uber, Lyft, Postmates, and Doordash have always classified their workers as contractors, freeing them from paying Social Security or payroll taxes, or complying with federal laws regarding wages, hours, and working conditions. AB 5 tightens the rules for qualifying as a contractor, requiring that a worker be “free from the control and direction” of the company they’re working for; perform work outside the “usual course” of the company’s business; and engage in the same type of work when not working for that specific company.
“Employers often respond to changes in the law by tweaking their business practices to avoid responsibility, and that’s clearly what we’re seeing here,” says Benjamin Sachs, a professor of labor and employment law at Harvard Law School.
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But not every business is controlled by a black box of an algorithm, designed to poke, nudge, and push both drivers and riders to drive and ride more. Since Uber changed its rules for California drivers, a small group of dedicated drivers—who have long clustered in forums on Reddit, a website called UberPeople, and in groups on Facebook to trade tips—have been studying how to peek inside the new black box, and make more money doing it. Avedian even coaches drivers on smart driving methods.
Uber has changed the way its bonuses work. Instead of handing over a lump sum after a driver hits a set number of trips in a set amount of time, Uber now lowers the company’s take, increasing the driver’s pay for future rides. A driver who may have once paid out 20 percent of each ride to Uber may now have to give the company only 15 percent once they hit their ride goal; that may prompt some drivers to stay on the road to earn bonuses. (The goals are set region by region, but drivers say that the thresholds now are generally lower than they were when Uber handled out a cash bonus.)
Last month, Uber also launched what a spokesperson called “an initial test” at three California airports, which allow drivers to set their own fare “multipliers” for base fares, travel times, and distance rides. The setting allows them to bid and even undercut the prices that other drivers are willing to accept—and may allow Uber to argue that drivers play a role in setting their own prices, as other independent contractors do.
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That still-in-development system might create its own set of motivations—and downsides for riders. Right now, Uber’s algorithm rewards drivers with higher ratings and more premium vehicles, matching them with highly rated passengers willing to pay more money for larger cars and comfortable service. But a bidding system could put more emphasis on price rather than quality of service, says Harry Campbell, who runs a blog and podcast for drivers called The Rideshare Guy. “This is a tricky balance,” he says.
The changes in California could lead to other unpleasant side effects. If too many drivers are choosy about their destinations, it could take riders longer to find rides. This may explain why Uber recently decided that it would stop sending as many requests to those who decline too many rides. The effect might be especially frustrating for California riders who live far away from busy downtowns, or, as David Zipper has pointed out on CityLab, in an area that drivers want to avoid. (Uber says this kind of discrimination is against its community policy and can lead to driver deactivation.)
Riders have also chafed against another Uber change in California: showing them estimated price ranges, rather than a set, upfront price. “One of the things that has made Uber stand out, especially from a consumer’s point of view, is that it has been so frictionless,” says Campbell. The new approach to pricing may change that.
Legal experts say all this wrangling might not persuade judges that Uber is not an employer. Orly Lobel, a professor who studies employment law and intellectual property at the University of San Diego, says Uber is targeting the first part of the new state test, requiring contractors to be free from an employer’s control. But the second prong of the test, which requires the work to be “outside the usual course” of the company’s business, should present problems with the courts, she says. Uber has always argued that it’s a platform, not a transportation company—but many in the legal world haven’t bought that.
“That’s why the apps have been fighting AB 5: because it can be interpreted so broadly that it is very hard to get out of its scope with tweaks,” Lobel says.
Uber and Postmates have sued the state of California, arguing the law is unconstitutional. Last week, a federal judge denied the companies an emergency injunction. Uber, Lyft, Postmates, and Doordash have dedicated at least $110 million to a state ballot measure that would create a third worker classification category, guaranteeing drivers a minimum wage, a health care stipend, and accident coverage. For now, AB 5 rolls on.