Uber Taking California Pay Model National In Pilot Program To Attract New Drivers

By Editor, Times of San Diego

February 28, 2022

Uber is testing a new driver algorithm in 24 U.S. cities that allows drivers to see pay and destinations before accepting a trip, while also raising incentives.

The company – which has been doing something similar in San Diego and throughout California post-Proposition 22 – hopes to encourage drivers to take on short rides in an effort to attract more of them to the service.

The changes, which are currently in pilot programs, mark the most wide-ranging updates to Uber’s driver pay algorithm in years and come at a time when the company is still trying to win back drivers who left at the start of the pandemic.

Fares paid by consumers are not affected.

Drivers have long demanded the ability to see the fare and destination before accepting a trip. Uber has resisted, saying it could open the door to drivers cherry-picking trips or discriminating against riders in disadvantaged neighborhoods.

Uber already has a similar approach in California, launched in the wake of a 2020 state battle over gig worker rights to prove its drivers are independent contractors.

But the company said its latest fare pilot in the U.S. was not related to gig worker regulation. The test has been rolled out in cities across Texas, Florida and the Midwest where gig worker reforms are not on the agenda.

“Gig work is very competitive, not just with Lyft, but other platforms, and we think this feature really enhances our platform’s competitiveness versus others,” said Dennis Cinelli, Uber’s head of mobility in the U.S. and Canada.

Cinelli said the shifts at this point would not impact consumer prices, adding the changes “aren’t financial features.”

Uber declined to comment on the financial impact for the company, which could mean it has to incur higher costs for short trips.

Cinelli said the company had not seen any discrimination by drivers in California since the policy launched there in 2020.

“Otherwise, we wouldn’t have rolled it out at this time,” he said, adding that Uber had the ability to deactivate drivers who repeatedly declined trips based on race or low-income areas.

Providing drivers with upfront pay details meant the company also had to reduce earnings for longer trips to prevent drivers from avoiding short rides, Cinelli said.

Uber said data from some cities with upfront pay have shown a 22% average increase in driver earnings for trips in which the distance to the pickup location is longer than the trip itself.

Driver responses were mixed on some online groups. Some complained the pilot-program algorithm seemed arbitrary and no longer allowed them to calculate pay based on a per-mile basis.

“My earnings are already destroyed by the high prices for gas and now Uber is taking even more money away from me on long trips,” said Kevin Hernandez, a Houston driver.

Other drivers in online groups said the upfront information allowed them to select only higher-paying rides, with several drivers sharing screenshots of increased earnings since the launch of the altered algorithm.

Expansion will depend on drivers. “If we’re not seeing it attract and retain drivers, we wouldn’t roll it out further,” Cinelli said.

(Reporting by Tina Bellon; editing by Peter Henderson and Sandra Maler)

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