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8 min read

    8 min read

    Over the past couple of months in response to AB5, drastic changes have taken place on the Uber driver app. Uber Service Agreements and Amendments have kept pace with these changes and have been pushed to drivers through the app. Senior RSG contributor Sergio Avedian read all 27 pages of the agreement from last year, and today he’s digging deep into the agreement from January 2020.

    I have this good habit: I won’t sign anything before I read a document I am asked to sign in its entirety. Let it be one page, or 27 in the case of Uber’s driver agreement from November 15, 2019.

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    After reading it, I was given the task to write an article on RSG on how to opt out of Uber’s Mandatory Arbitration clause since drivers have to sign these agreements in order to continue driving. In the article above, I provided a link that will make it very easy to opt out correctly and quickly. Drivers have 30 days to opt out from the day they electronically sign the agreement. Other drivers like Jay, are going the arbitration route though.

    Now, Uber is back with more changes to their driver agreements, and I am up to the task of deciphering it for the drivers. For me personally, there are some very troubling paragraphs in the new agreement.

    This will be a long article with a lot of screenshots with commentary attached for highlighted sections. You can take a look at all of the PAA documents in their entirety here. Please go through the whole article and let me know if my concern is valid with your comments below.

    What’s in Uber’s New Terms of Service and Other Agreements?

    Uber’s alphabet soup consists of: TOS, TSA, PAA

    • Terms of Service (TOS) Older Versions
    • Technology Services Agreement (TSA) November 15, 2019 version
    • Platform Access Agreement (PAA) January 6, 2020 version

    All of the above have changed drastically in language, especially the new Platform Access Agreement (PAA) from the previous ones since AB5 became law in California as of January 1, 2020.

    The new PAA clearly is placing the Driver as Uber’s technology platform customer and the Passenger as our Peer to Peer (P2P) services customer. Uber is basically acting as a payment collection agent for the drivers and charging drivers a 20-28% Service Fee to access its technology platform. This means that the receipts the passengers receive now are sent by Uber on behalf of the drivers.

    Drivers charge the passengers by miles and minutes (Uber still sets the rates, and in Los Angeles they are 60 cents a mile and 21 cents a minute) for transportation services provided plus applicable surge, tolls, fees, etc. Uber simply collects the fare from the passenger, deducts their so called platform Service Fee and pays the driver a fixed percentage of the fare (75% in most cases).

    Uber separately charges the passenger a new Marketplace Fee (now variable by the way but $3 in most cases) for using the Uber technology platform. The driver does not know how much this fee is and it is excluded from the driver’s Fare Details.

    Driver and Passenger Agreements with Uber

    Please, take a look at all the highlighted sections below as well as I urge you to take your time and read the content on all the screenshots attached.

    1.1 Could it be clearer that Uber is not considering drivers as employees? They don’t want to touch the word Employee with a ten foot pole!

    1.2 First sentence cracks me up! Uber says they don’t control us, but I disagreed in my recent article, “I Got Skunked By The Uber Algorithm”. Algorithms decide which rides to allocate to which driver and when. Let’s not kid ourselves here, Uber is in total control of the driver other than when to turn the app on or off. Even that is questionable, as many of you may have noticed. Uber has a tendency to turn your app off, throttling you or putting you in quiet time outs for a period of time after declining too many requests.

    2.6 Accepting ride requests creates a direct business relationship between the Driver and the Passenger! We provide transportation services to the Riders, because they are our customers.

    2.7 More clear language that I will not get to wear my Uber shirt and hat any time soon.

    2.9 Funny, I always thought there’s fuzzy math applied to my driver ratings!

    Insurance Agreement

     

    I had to underline everything regarding Insurance coverage. I probably read this page at least half a dozen times. What is most troubling for me is in Sections 3.3 and 3.4! We will maintain Workers Comp Insurance? Since when?

    In 3.4 above, Uber clearly states that they may reduce or cancel the policy that has been provided by them. Do we have Uber maintained insurance or not? Are we covered in case of an accident? How many drivers out there have insufficient coverage? They may be one accident away from a lifelong disaster. So far, when I accept a ride, I immediately take a look at the Waybill for that specific trip and take a screenshot of it.

    Deactivation and Arbitration Agreement

    5.3 So the policy of unjust deactivations continues. We are all one bad ride away from getting booted off the platform. One fraudulent complaint away from deactivation, as it happened to my student and friend Jay, who I had coached and did an article on his success story. 8000 rides, 4.95 rating and he was booted a week before Christmas 2019!

    What a shame, if AB5 needs to do anything, it has to bring these unfair deactivations to an end. Uber must stop being the judge, jury and executioner!

    6.3 Very troubling, Uber shifting all this onto the driver for 60 cents a mile!

    6.4 Also in this agreement, Uber said they don’t control us, but what does an algorithm do exactly? I know these algorithms are so sophisticated that driver earnings could be immensely affected!

    Use this link to opt out of the Mandatory Arbitration clause in minutes. It must be done within 30 days and most if not all drivers signed the PAA about January 6-8.

    Payment Processing

    Drivers, take a good look at the highlighted sections above!

    Fares, gratuity: Since when are drivers enabled to charge a fare for the trip? Uber has set the mile/minute rates and continues to do so, not the driver. Things are changing I guess!

    Our Service Fees: Uber allows us to use its technology platform for a fixed (20-28%) Service Fee.

    Rider Payment: Riders will pay Drivers a Fare and pay Uber a Marketplace Fee (variable) outside the Fare.

    Limited Agency: Uber is now our agent; it is a payment processor for the Driver. The Fare and gratuity is considered direct payment to the Driver from the Rider!

    Receipt: Receipt will be electronically sent to the Rider on the Driver’s behalf.

    Destination Discrimination

    Finally, some clear language about transporting unaccompanied minors. I hope Uber drivers will keep this in mind and reject all of these trips, a few dollars is not worth a lifetime of grief!

    Last paragraph is definitely interesting to me. Harry had David Zipper on his podcast not too long ago, and they discussed this exact same issue. Will riders be discriminated against due to the neighborhoods they live in?

    There has also been extensive media coverage about potential discrimination since Uber drivers now know the destination of the passenger (in California, at least). I guess Uber had to put specific language in the new PAA since they started disclosing rider destinations. Will Uber deactivate drivers who continuously reject trips to and from bad neighborhoods since it violates Uber Community Guidelines now? Time will tell!

    My Take on Uber’s New Platform Access Agreement

    Uber is in a giant push to defeat AB5 not only legally, but they’re working very hard to change public opinion. If fares go up or most short trips are rejected, Uber will use this evidence against the drivers and AB5!

    In addition to these changes, Uber is also feverishly collecting signatures for a petition to qualify a ballot measure for the upcoming 2020 elections to repeal AB5. This is an ad on Craigslist I saw the other day; it looks like a high payout for signature collectors! They may end up making more than drivers.

    I think Uber is being smart here. Uber is hedging their bets by throwing a bone to the drivers in case everything else fails as far as their legal challenge is concerned. They are separating themselves from Lyft, at least for now.

    Will Lyft follow the big brother and bring back Prime Time, or show destination? Lyft is definitely rolling the dice with the entire market cap of the company. If Uber, Lyft, Doordash and Postmates are able to tie up AB5 in courts or repeal the law in its entirety, I bet Uber will take back all the seemingly positive changes for CA drivers.

    Do all these changes in the PAA make us independent contractors? Uber legal team definitely must think so!

    Have you ever read the TOS, TSA or PAA in full? Does this make you more skeptical about all the changes? Do you think drivers are true ICs now?

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    – Sergio @ RSG

    Sergio Avedian

    Sergio Avedian

    Sergio has been driving Uber and Lyft for about three years. He has over 4500 rides on both platforms, mostly on Uber. Sergio has a degree in finance, and worked on Wall St. for over eighteen years. In his free time, he still trades stocks and derivatives for himself and a few friends. He is also a PGA certified golf instructor, teaching golf is his passion. Sergio is married with two wonderful kids who take the rest of his afternoons/weekends between their soccer practices and golf tournaments.

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