Uber letting drivers set fares in California test

The change applies to certain drivers in three California cities

Uber is giving some drivers in California cities more autonomy over how they charge riders in response to a gig worker law that went into effect in the state on Jan. 1, the company confirmed to FOX Business.

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"Since AB5 has gone into effect, we’ve made a number of product changes to preserve flexible work for tens of thousands of California drivers," an Uber spokesperson said. "We're now doing an initial test of additional changes which would give drivers more control over the rates they charge riders."

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Uber drivers carrying passengers at three airports in Santa Barbara, Palm Springs and Sacramento will be able to set fares up to five times higher than Uber's original rate.

Uber could roll the feature out statewide, the person involved in development said. The feature lets drivers implement fare hikes in 10% increments, but drivers with the lowest prices will be matched with riders first.

Uber has made other changes because of AB5, including letting drivers see riders' final destinations instead of picking them up without knowing where they ride would end.

The new law, Assembly Bill 5, would require many businesses to treat their gig workers as W-2 employees. Uber and Postmates, a tech company with a similar business model, filed a lawsuit over AB5 earlier in January in an effort to block the law.

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The international Teamsters union accused Uber and Postmates of waging "war" on working people because of the lawsuit.

"This recent lawsuit filed by major corporate interests seeking to invalidate AB-5 is the most recent demonstration on the war that is currently being waged against working people in our country," Teamsters international Vice President Ron Herrera said in an official statement.

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The companies say the law is irrational and vague.

"State legislators had the opportunity to expand benefits for hundreds of thousands of independent workers in California, a step Uber has been advocating for and one that other states already have taken," Uber said in a statement to FOX Business earlier in January. "Instead, they passed AB5 using a biased and overtly political process ... We are joining a growing group of companies and individuals suing to ensure that all workers are equally protected under the law and can freely choose the way they want to work."

Uber plans to spend big on a ballot measure to counteract AB5, the company said in September.

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