Stock

: Uber confirmed drivers decrease fares than passengers and blamed California legislation for supporting it

Uber Technologies Inc. announced on Friday that it had shown drivers lower fares than the drivers actually paid and promised to change the practice, attributed to a California law the company spent tens of millions of dollars on .

above
ABOUT,
-0.23%
made the change after the San Francisco-based Mission Local news site reported that drivers across town were consistently seeing a lower fare than what drivers actually pay, raising transparency for drivers wanting to know how much Uber is doing every trip is shortened.

Uber spokesman Matthew Wing confirmed to MarketWatch that the practice would change, saying California drivers and drivers will be different due to charges imposed on Proposition 22, the voting initiative passed by a majority of the state's residents in November See amounts, see different amounts.

Uber, Lyft Inc.
LYFT,
-0.44%
and other gig companies spent more than $ 200 million in support of Proposition 22, which promised drivers certain new benefits to circumvent a state law that required them to treat drivers as employees rather than independent contractors . Uber passes the cost of these new benefits on to drivers – including guaranteed earnings of 120% of the minimum wage during the drivers' busy or booked period, health grants for some drivers, and more – which makes them pay a higher price for the ride as a driver do, said Wing.

For more: Gig employees see wage changes, customers see higher prices according to Prop. 22

"They weren't shown these charges on the driver's receipts," Wing said. "They were only shown the amount of the fare from which they received a reduction."

Uber will be showing the same information to drivers and drivers starting next week, he said.

Advocacy group Gig Workers Rising on Friday scoffed at Uber's statement. "If that discrepancy was really just about the 'performance fee' of Prop 22, why deny transparency?" Said Lauren Casey, chief organizer at Gig Workers Rising.

Casey also pointed out complaints from drivers that many of them did not benefit from Proposition 22. For example, drivers who received Medi-Cal, the government health insurance program for low-income individuals and families, are not eligible for the health grants.

See: Uber and Lyft Drivers Say New California Law Won't Solve Their Health Needs

Uber and Lyft say they have already paid millions of dollars in guaranteed healthcare income and grants since Proposition 22 was passed last year. Wing stated that the prices drivers see are what they are willing to pay for the ride, but driver pay is determined by factors beyond the base price and distance, such as: B. the duration of a trip, which can vary.

Mission Local's story includes questions about Uber's take-rate – what percentage of the cost of a trip the company receives versus the revenue from drivers. Uber has said its take rate is around 25%, but based on the calculations of the reporter on that story, the drivers' average take rate was around 56%, meaning the company's take rate averaged around 44% .

"The usage rate for individual trips does not currently include driver incentives, so it does not fully reflect how much the driver earns on a trip, nor does it give a complete picture of how much Uber drivers are actually making," said Ubers Wing.

With demand for rides picking up again, both companies say drivers in the top markets these days make an average of more than $ 30 an hour, excluding tips. However, drivers who went on a one-day strike this week told MarketWatch that their earnings have declined.

See: Uber and Lyft Drivers Strike for a Day

Lyft said this week that it is giving drivers a weekly breakdown of their earnings, deductions, what the drivers are paying and where that money goes.

Related Articles