Uber plans to allow drivers charge customers for fares

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Last year, a bill that asked for independent contractors to be given employee benefits was filed in California. While the bill cuts across many businesses, one business to be affected by it includes ride-sharing companies like Uber.

In response to this bill (known informally as the gig-economy bill or the AB5) Uber appears to be working towards compensating drivers by giving them improved rewards from their work.

The $50 billion-valued company has announced that it is testing out a feature that allows its drivers set their own fares for trips. This feature is currently being tested in California and has not been rolled out yet.

Uber has operations in many countries including Nigeria. As at 2018 it had over 9000 drivers in the country. These drivers aren’t exempt from the circumstances that led to the gig economy bill because recently, some Uber drivers in Abuja announced a strike and aired their grievances on the internet.

“Mostly, what we want is for them to cut down the commission fee they collect,” an Uber driver said. ” In South Africa and Switzerland, Uber collects only 15 per cent commission from drivers, but here in Abuja, it is 25 per cent, which is difficult for the drivers to meet up.”

Uber drivers in Nigeria would therefore be licking their lips at this new prospect because the new feature, if applied in Nigeria, would be exactly what the drivers wanted.

While Uber might not cut down its commission, it is however, giving the drivers a chance to reasonably and competitively charge their own fares.

A driver can set a fare as high as five times Uber’s set price. If a ride costs #1000 according to Uber, the driver can increase it up to 5 times Uber’s price. That is up to #5000, but no higher.

According to Reuters, if the fare will be increased, the driver has to increase it in increments of 10%. For example for a trip of #1000, the ride will be increased to #1,100 first, after which another 10% increment can be made. The driver can keep increasing the fare until he is satisfied or he max’s out at the #5000 (five times Uber’s initial fare).

Overall implications

If the new feature is rolled out, drivers will be able to charge more for rides booked by passengers. Drivers can make more for each ride they undertake.

However, Uber has not clarified if its commission will also increase as the fare increases. Neither has the ride-sharing company explained if the price increment will be allowed for every destination.

If its drivers make a habit out of increasing fares outrageously and above what passengers consider fair, Uber could be run out of business pretty quick. This is because competitors such as Bolt and other ride-hailing options could charge significantly lower and gain a lot of market share from Uber.k

The new feature also means that drivers can keep working as flexibly as they have been from the start.

While Uber may pitch this as a counteroffer in California, it does not substitute or account for accident insurance and other employee benefits that drivers are requesting for under the AB5 bill in California, and other parts of the world.

(Technext)

Yetunde Adegoke

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