Uber is conducting initial tests of a new tool that would allow drivers using the app to set their own prices.
Uber is rolling out the new tool to drivers who pick up and drop off passengers at airports in Santa Barbara, Palm Springs, and Sacramento, California, according to the Wall Street Journal. The tool allows drivers to charge up to five times Uber’s rate.
Uber developed the new tool in response to a new California law that changes how employees and contractors are classified. The law, Assembly Bill 5, significantly expands the definition of an employee and tightens restrictions on which workers companies can claim are contract labor.
The new law took effect at the first of the year, and since then, two lawsuits have been filed against the rideshare company alleging that it misclassifies its drivers. Uber has argued that its popular app is merely a medium to connect customers to drivers, insisting that its drivers are not employees.
With the new tool, Uber is trying to lessen the amount of control it has over its drivers and strengthen its case in court that its drivers are contractors. In addition to the new tool, the rideshare company also capped its commissions from rides across the state and began letting drivers pick which rides they wanted to service, rather than automatically pairing them with customers.
Uber’s woes in California are ramping up after its former CEO Travis Kalanick, 43, stepped down from its board of directors last month.
“Uber has been a part of my life for the past 10 years. At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits,” Kalanick said in a statement.
Kalanick co-founded the rideshare company in 2009 with Garrett Camp. Kalanick was forced to resign as CEO of the company in 2017.
