California drivers, it’s time for another big announcement from Uber! As we’ve covered over the last few weeks, Uber has rolled out a series of new changes, including new driver features and fare card changes. Today, as first reported by the Wall Street Journal, Uber is announcing even more changes related to its fare multiplier. Essentially, at certain airports, Uber drivers will be able to set their own prices.
Before we get into that exciting news, some background. By now, all drivers in California should be able to see where their passengers are going and see estimated earnings when they get a request. In addition, all drivers have the surge multiplier and Quest Bonus in the form of a lower service fee. The new driver features were released by Uber in December 2019, and fare card features were released in early January 2020.
Over the next two weeks, Uber will be rolling out more changes to the ways drivers determine their own pay – starting with today’s announcement for drivers in Palm Springs, Sacramento and Santa Barbara.
There are two main components to the upcoming changes:
- Drivers picking up at the Palm Springs, Sacramento and Santa Barbara airports will be able to set their own price (via multiplier) at the airport or just outside of the airport. Drivers can set their prices higher, lower, or the same as Uber’s price.
- Drivers will be able to opt out of surge – drivers can set their multiplier from the airport and choose to not accept surge pricing.
Drivers won’t see all of these changes at once – first, they’ll only affect drivers picking up at those three airports. Second, the opt out of surge feature won’t come for another week or so. Uber may roll this out slowly to other California drivers and airports, but with a change this huge, it’s not going to happen at LAX tomorrow.
So let’s break down how this works and what drivers can expect to see soon!
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Drivers Get to Set Their Own Rates… With Some Caveats
Starting today (Tuesday), drivers in Palm Springs, Sacramento, Santa Barbara will be able to set their own price at the airport. Drivers will do this via their Driving Preferences setting once they are outside or inside one of those three airports.
As you can see from the screenshot below, drivers will be able to set their fare multiplier up to as high as 5x Uber’s price down to as low as .1x (below Uber’s price). Setting your fare multiplier at 1x means you have the same price as Uber – you’re not higher than the Uber rider cost nor lower.
Obviously, it makes sense why a driver would set their multiplier higher – to earn more! However, why would a driver set it lower? Well, rider and driver connections are based on the lowest price out there – meaning if a passenger requests a ride at Sacramento’s airport and there are two drivers waiting, one with a multiplier set to 3x and one with a 1.3x multiplier, the 1.3x multiplier driver will get the ride before the 3x multiplier driver.
Opting Out of Surge
Within the next week or so, drivers at the Palm Springs, Sacramento and Santa Barbara airports will also see changes to surge. With this change, drivers will be able to opt out of surge (but keep whatever multiplier they have set).
Again, drivers and passengers will be paired with the lowest/cheapest driver price, so if you opt out of surge but your fellow driver does not, you (assuming your multipliers are the same) will get the ride over them. Uber is betting on some drivers wanting to stay busy and lower their fare multipliers and refuse surge, which could be the case for some drivers out there, especially on longer rides.
If you do decide to accept surge pricing, you will get whatever is higher between your multiplier and surge. For example, if you set a 1.3x multiplier and surge is 2x, you will get will get 2x at these airports starting starting today.
Drivers will not know what their fellow drivers are charging right away, but Uber will nudge you by letting you know higher multipliers could cause you to wait longer (see screenshot above).
Why Isn’t This Rolling Out to More Airports?
Obviously, many drivers would like to see this at more airports in California. However, with a change this big and given how hectic airports can be, it makes sense that a change like this won’t happen overnight. However, Uber has said they will see how this roll out goes and, if it goes well, will be rolled out throughout California airports.
This truly is a ‘wait and see’ type of app change, but we will make sure to update you as this change rolls out across the state.
What Can You Expect to See Over the Next Few Weeks?
If you don’t live near the Palm Springs, Sacramento, or Santa Barbara airports, not a whole lot yet. Drivers near those airports will see changes inside the Driving Preferences section, which they can toggle up and down as they want. This is only rolling out to UberX and XL drivers at the moment, although Uber says these changes will expand to Black and other services down the line.
In roughly a week from now, drivers near these airports will also see a switch asking if you want to participate in surge or not.
How the Uber Fare Multiplier Has Affected One Driver in Palm Springs
Luis G. is a RSG reader and driver in the Palm Springs area who has already tried out the fare multiplier feature at the airport.
“I was excited to test this feature out due since you can basically set it and forget it while maximizing your earnings during busy times of the day. I’ve found that I don’t have to set up this feature each time I go to the airport so that’s another benefit.
If you’re using fare multiplier and you want to make a change, it’s easy to adjust your rate as needed so you’re not locked into whatever you initially choose. I normally set it at 1.8X when there are plenty of other drivers around to keep up with the competition, but I set it a 3X when no one is there. I’ve even played around with setting it 5X just to see the rate but know I probably won’t get a trip especially if there are other drivers around as well.”
Luis has been driving for Uber part-time in California for over 5 years. He works as a tax preparer during the day but drivers for Uber for extra money generally during the morning for a few hours or on weekends.
Like many other drivers’, Luis doesn’t feel this new feature will be a complete game-changer, but it may be a step in the right direction. There is still some confusion among drivers regarding who gets priority, especially if other drivers are a few miles away and are not using the fare multiplier.
“The only question I have is what will happen or who will have priority when we’re not at the airport and there are no more drivers at the staging area? Will they prioritize by price or by who’s closest?” Luis added.
While Luis is a fan of having this new freedom as an Uber driver, he’s not looking forward to being able to opt-out of surge pricing.
“This would not be a good thing for drivers and would make things much more competitive while pressuring drivers to lower their own rates in the hopes of getting a trip quicker. At the end of the day, doing this does not benefit the driver or make it more profitable for them.”
Our Take on the Big News
As usual of late, these changes are only rolling out in California and in response to AB5. And although this test is limited to three smaller airports, being able to set your own prices is an important part of being a true independent contractor. The one complaint we’ve heard from drivers in response to all the changes in California is that drivers still don’t have the ability to set their rates, well apparently Uber is listening.
Obviously, this is a small test and drivers will only be able to set prices at airports, but I could easily see this expanding to every single ride in the future. One thing that will be interesting to watch though is drivers who set their price too low. Drivers often complain about over-saturation so in a world where drivers have the ability to set their own rates, could this make it a race to the bottom? Only time will tell!
Readers, what do you think of this latest announcement from Uber? Is this something you’re excited to see?
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-Melissa @ RSG