California Assembly Bill 5 and Uber Technologies Inc – Guide for Drivers

To California drivers: keeping you in the driver’s seat, Part 1 and 2

In a direct response to California Assembly Bill 5 (AB5), drivers for Uber Technologies Inc are provided with more information in the driver application form.

As promised in my last blog this blog digs into the changes Uber has already rolled out to drivers in California.

For this exploration the reference sources come directly from Uber’s website: “Keeping you in the driver’s seat parts 1 & 2.”

Uber’s web site announcement tells us why they have made significant updates to the Uber driver application used by California Uber drivers:

 

“There has been a lot of important debate about flexible work and what it means to drive with Uber in California. With the passage of new laws, we’ve been carefully considering how we could further protect your access and enhance the flexibility and transparency of the Uber platform going forward.”

 

In this quote “New laws” refers to California Assembly Bill 5 or AB5.

AB5’s three-part test:

(A) The hiring entity does not control or direct the worker in performing the work in fact or under the terms of a contract

(B) The work performed is outside the “usual course” of the hiring entity’s business

(C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed

In the past I’ve written extensively about AB5… most recently in my last blog, Assembly Bill 5 (AB5) and Independent Contractor Agreements in California, where I made clear why AB5’s test in the all-new California employment law does not force any California company to do anything… AB5 is simply a test for employers meant to guide how they classify workers… traditional employees or independent contractors.

 

California Assembly Bill 5 Caused Uber Technologies Inc to Update the Driver Application

Understanding the 2020 Uber driver application updates is important to drivers in California and to all active and future rideshare drivers. 

I believe the California driver application changes are interesting to every driver completing Uber passenger trips (and people thinking about giving rideshare driving a try) because Uber has made clear they may roll out the driver application updates to other cities in the future and more importantly provides important clues about the future state of the rideshare transportation phenomenon in the United States and possibly international markets too.

From the referenced Uber web pages:

 

“…[for now] these features are available to California drivers only. As with all feature launches, we will monitor the effects of the change to ensure the experience is working properly and doesn’t create any unintended issues for drivers or riders. We will continue to evaluate expanding these features beyond California in the future.”

 

In this blog we’ll walk through seven updates to the California Uber driver application and related functionality… and as a rideshare industry analyst; a rideshare driver with over 14,000 lifetime trips; author of two books for getting the most out of rideshare driving; and online blogger… I’ll be sharing my thoughts on each update.

California Uber Driver Application Update #1 – More Passenger Trip Information

A screenshot in the referenced Uber webpage shows what will be included in every passenger trip request when it appears on the driver’s phone… the trip request popup is described in the referenced Uber web pages in this quote:

 

“By seeing your pickup, trip time, distance, destination and fare upfront, you’ll know what you can expect to earn and where a trip will take you, all before you accept, on every trip. The dollar amount you see is the estimated amount you’ll take home, after Uber’s service fee, if you accept the trip.”

 

This is an important update of special note to brand new drivers in California because new drivers normally do not see any detailed information when a passenger trip request “pings” on their phone. 

After completing a whole lot of Uber passenger trips drivers in the U.S. can earn “Uber Pro” status… at the two highest levels of the Uber Pro program drivers see some basic passenger trip information before accepting a trip request “ping.”

I won’t be going into the details of the Uber Pro Program in this blog… it’s pretty darn complicated and Uber does a good job of describing the program on their webpage.

 

 

With the updates to the California driver application every California driver will see detailed information about a passenger trip request (a gig economy “gig”) and this is a pretty big deal!

Before we start digging into the details of the California Uber driver application updates it’s important to remember why Uber rolled out these changes… as I explained in my last blog California’s new employment law (AB5) provides a stronger legal basis for lawsuits claiming that an employer is incorrectly classifying a California-based worker as an independent contractor.

It’s also important for our thinking to remember that being a gig economy rideshare driver is really not about completing hours of work… at its core rideshare driving is about completing individual rideshare trips… individual gig economy “gigs”… each individual passenger trip is a separate “job”… a separate “gig.” 

In short, each passenger trip is an individual piece of contracted work which is completed by an independent contractor driver.

It’s also important to understand that Uber, Lyft, and the other Ridesharing companies (also referred to as Transportation Network Companies or TNCs) do not pay drivers to get out on the road; or log in and go “online”; or be in their vehicle prepared to accept a passenger trip; or be in a particular part of a city at a particular time; or pay drivers for anything but completing passenger trips… completing individual “gigs.”

Yes, yes… drivers sometimes earn bonuses for things like completing a certain number of trips in a defined time frame… but that’s not the point I’m making here.

Rideshare drivers get paid when they complete a single passenger trip… most drivers choose to complete multiple trips during a continuous period of time BUT that doesn’t by itself make rideshare driving a “traditional job” with a start and end time controlled by an employer… this is a key point… the driver chooses how many trips or “gigs” they want to complete.

These points are important for our thinking… because it’s easy to think about rideshare driving as if it was a “traditional job” and easy to think of rideshare drivers as more like employees than independent contractors. 

Easy to think this way because before Uber and Lyft most gig economy “gigs” did not make it possible to complete multiple gigs, one after the next, for hours at a time… there’s never been anything that compares to being a rideshare driver… it is a brand new thing so not surprising so many people are confused about how it works for drivers.

Certainly, most drivers get out on the road for hours at a time completing more than just one passenger trip… but how many trips requests accepted and completed during a given “shift” of driving is always the driver’s choice.

To help us understand these very important points consider this reality… Uber and the other Ridesharing companies do not promise passengers they will be able to get a ride 24 hours a day, 7 days a week, 365 days a year… a passenger hoping to get a ride might not be able to get one.

This reality supports the TNC’s claim that they are not transportation companies… if they were transportation companies… delivering transportation as a product… it makes sense they would promise passengers transportation?

The TNCs are companies that provide application platforms matching people who want transportation with people willing to provide transportation… getting where you want to go is never a promise… and if you don’t get a ride when you want one you can complain… but it would probably just be a waste of your time and energy.

There are plenty of drivers who would argue this point and say that Uber, Lyft, and the other Ridesharing companies claiming they are not transportation companies are attempting to hide what they really are with a deceptive argument… I strongly disagree!

The reality of rideshare transportation is there could be times when there are no drivers available to provide the transportation someone wants… in these times it’s not logical to believe that the TNC failed you… because they never promised you a ride.

Okay, okay in summary:

  • Uber made changes to the California driver application to support Uber’s position that drivers are correctly classified as independent contractors
  • Uber, Lyft, and the other Ridesharing companies do not promise transportation 24/7/365… they connect passenger with drivers via software and manage the billing of passengers and paying of drivers

 

 

Back to CA Driver Application Update #1…

By providing more detail about a passenger trip before the driver accepts the contracted work Uber Technologies Inc will have a stronger argument in a legal case that a California driver is correctly classified as an independent contractor because the driver accepted the contracted work (a single ride) knowing in advance:

  1. The approximate amount of income to be earned for completing the contracted work (a single passenger trip)
  2. The approximate amount of time it will take to complete the contracted work
  3. Where the contracted work starts and ends (Point A to Point B)
  4. How many miles the driver will have to drive to complete the work
  5. The passenger’s star rating (basic information about the quality of the passenger contracting the work)

Personally, I would love to have this level of detail about each trip; however, the knowledge would not change how I manage my rideshare driving days… it would just be nice to know in advance what kind of trip I was about to complete.

In my book How to Be a Lyft and Uber Driver – The Unofficial Driver’s Manual I explain why I accept almost every passenger trip request and also why I sometimes choose to not accept a trip request… or choose to cancel an trip request after I have accepted it.

Being a rideshare driver doesn’t have to be complicated… driving in Denver, Colorado I consistently average just over $24 per hour doing exactly what is described in How to Be a Lyft and Uber Driver – The Unofficial Driver’s Manual.

To see how my great and not-so-great earning days deliver average income just over $24 an hour driving in Denver, Colorado (metro population 2.8 million)… download a free copy of my Rideshare Earnings Case Study and see over two years of my detailed earning results.

I also have almost zero stress during my rideshare driving days in no small part because I don’t have complicated rules about what kind of trips I do accept or don’t accept; there’s nothing complicated about how I manage my interactions with passengers in my car; nothing complicated when and where I choose to work; nothing complicated about anything else I do as a rideshare driver.

In my book How to Be a Lyft and Uber Driver – The Unofficial Driver’s Manual I provide simple to remember, step-by-step ways to maximize my rideshare driving income and minimize my rideshare driving stress.

California Uber Driver Application Update #2 – Not Accepting a Trip Request Has Zero Negative Consequences

From the Uber web page:

 

“Accept only the trips you want to take and your Uber Pro status won’t be affected. Your acceptance rate will no longer affect your Uber Pro status and access to Uber Pro rewards. Uber Pro points, your driver star rating, and cancellation rate will still determine your status.”

 

California Uber Pro drivers can “cherry pick” trips they want to accept and complete without worrying about losing their Uber Pro program status.

In the online rideshare driver forums there is an abundance of advice from active drivers about not accepting certain kinds of passenger trips… like very short trips.

Maybe it’s different in other cities… but in Denver, Colorado there are times when I can’t count on getting another trip request quickly.  It’s almost always not logical to me to turn down lower-paying short trips waiting for a nice long trip to Denver International Airport when that longer trip request might never come my way.

This Uber Technologies Inc driver application update also seems important to support a legal case that drivers are indeed independent contractors able to turn down work without worrying about a direct negative consequence in the future.

California Uber Driver Application Update #3 – Passengers Can “Favorite” a Driver

 

“In early 2020, riders will be able to request their favorite drivers when scheduling a trip in advance, giving you [the driver] the first opportunity to accept the reservation request as soon as the ride is scheduled.”

 

This update sounds good and supports a legal argument that independent contractor drivers can build their future rideshare driving business success with repeat customers.

On the other hand, a core “benefit” of rideshare driving is without question the ability for a driver to work on their own schedule… accepting passenger trips scheduled in the future reduces this flexibility.

A passenger requesting a trip in advance sets the time and place they want to be picked up.  This means the driver has to manage their time around being at the pickup location at the right time.

 

 

Where I drive, in Denver, Colorado, we have a metro area with over 2.8 million people spread out over 155 square miles.  

Managing my time to complete an accepted scheduled trip means I probably won’t be earning any income during the time it takes to be at the pickup location at the right time and I will incur “deadhead” miles vehicle expenses to get there… possibility a lot of “deadhead” miles.

Just as important to me… if I accept trips scheduled in advance, I’d be giving away my flexibility to work when and where I choose… it’s unlikely I would earn more income than I would just letting my rideshare driving day take me naturally from one trip to the next.

If it were common for me to drive long distances to get my next passenger trip request, I might think differently about this application update… but it’s very rare that I am choosing to have “deadhead” mileage (no paying passenger.)

During my rideshare driving days it’s most common my next passenger trip pickup location is a 10 minute or less drive from my last passenger trip drop off location. 

Also true… when I’m completing passenger trips during evening hours (after about 4 p.m.) it’s very rare I’m waiting more than a few minutes before accepting my next trip request… this is true almost anywhere in Denver’s 155 square miles.

The Lyft driver application has had scheduled trips as an option for a long time… these requests are available to any driver but when I bother to look it’s common to see scheduled trip requests where the driver will earn less than $10 if they accept the trip request… the only way accepting a scheduled trip might make sense to me is if it were a trip where I would earn $25 or more… the pickup location was very close to my home… and with a pickup time close to when I plan to start a work day.

In a very small market (small population city) scheduled trips might benefit drivers and improve a rideshare driver’s total income… but it’s also true in a small market rideshare driving is unlikely to produce anything but side income, certainly not enough passenger trip requests to result in a consistent average hourly income higher than a minimum wage job.

So what does this all mean? 

This Uber Technologies Inc application update might sound good in a legal argument drivers have the opportunity to build a regular clientele but practically speaking it’s really not an important update for most drivers.

California Uber Driver Application Update #4 – Uber’s “Take” capped at 25%

From the referenced Uber web pages:

 

“…Uber’s Service Fee on UberX trips in California won’t be more than 25% of the trip fare and will be shown in advance on your offer card.”

 

In my opinion this is the most important Uber driver application update supporting Uber’s case they are not a transportation company and instead are an “application platform” connecting passengers wanting transportation with drivers willing to take them where they want to go.

In the early days of Uber, Lyft, and the other TNCs, drivers earned exactly what a passenger paid minus a defined percentage of the fare retained by Lyft/Uber as a “Service Fee.”

When there are a lot of passengers requesting trips both Uber and Lyft charge higher fares (Surge Pricing), for example when a large public event ended, using a Surge Pricing model that multiples the normal price for the trip… a passenger accepting a 4x Surge Price would be charged $100 for a trip that would under normal circumstances only cost $25. 

When this happened… if the TNC’s “take” was 25% of the total fare… the driver’s income was $75 of the $100 the passenger paid.

 

 

A few years ago, Uber and Lyft changed how they calculated their “take” of a passenger’s fare. 

After the change (during Surge Pricing) instead of a percentage of the total the passenger paid drivers were guaranteed only a defined payment for each mile of a passenger trip and each minute the trip required to complete.

This change meant the Ridesharing companies could charge a passenger any price a passenger agreed to pay without sharing a defined percentage the increased fare with the driver completing the trip.

After this change many drivers posted example trip receipts in online driver forums and news articles showing that what they earned for a given trip was relatively small compared to what the TNC charged the passenger.

Using the $100 trip example the Ridesharing company's “take” might be $60 with the driver earning only $40. 

The driver still earned more for the more expensive trip… but drivers argued they were not getting a “fair” cut of what the passenger paid.

A few months ago, in response to drivers complaining online and posting examples, Lyft made a change in their driver application and currently Lyft drivers cannot see the total price a passenger paid for a given trip. 

A Lyft representative communicated publicly they made the change because knowing what a passenger paid for a trip was confusing drivers about the pay structure they agreed to in their contracts with Lyft.

Personally, I didn’t get very excited by the examples where Uber and Lyft were taking significantly more than 25% of what a passenger paid… sure I’d always like to earn more income but when I audited some of my trip receipts, I only found a few examples where Uber or Lyft’s “take” was significantly higher compared to the average trip.

Personally, I thought it was interesting I never saw a news article claiming passengers were getting “fleeced” or “overcharged” or in any way treated unfairly… only articles saying drivers were being cheated. 

From my point of view some passengers were probably being charged more than is “reasonable” but no one seemed to care about what passengers were paying… it was very clear drivers were upset because they weren’t getting their “fair” cut of what was arguably an “unfair” charge to the passenger.

I’m excited about this California Uber driver application change and I believe it will inevitably spread to other Uber cities and other TNC driver applications in the U.S.

I think it’s logical that when a Ridesharing company claims they are not a company providing transportation… instead they are a software application that matches riders with drivers… the percentage of the TNC’s “take” shouldn’t change from one trip to the next?

To back up their “not transportation companies” claim… the TNCs, as “middlemen” between passengers and drivers should earn a defined standard Service Fee for facilitating the match…. a Service Fee that does not change from trip to trip. 

As of January 1st, 2020 UberX (basic rideshare service) drivers in California contracts define a 25% Service Fee from the total price a passenger pays.

Obviously, I’m not a lawyer… but I’d think in a court of law it would be pretty easy to argue that “an application matching riders with drivers” would charge drivers a set percentage for making each match… a defined Service Fee for setting up each “piece” of “contracted work.”

If the Ridesharing company’s “take” has the potential to change from one trip to the next this doesn’t sound to me like an “application platform” simply matching riders and drivers… it would be up to a judge to decide if this level of control of the price a passenger pays and how much of the price the driver earns would arguably make the TNC more like a “transportation company” and therefore make drivers more like employees than independent contractors.

Repeating my key thought on driver Application Update #4… I believe this update is the one most likely to someday be rolled out to all drivers in the U.S.

This Uber Technologies Inc update, more than any of the others, is the one which most strongly supports the Ridesharing company’s claim that they are not a “transportation company” and therefore drivers are more independent contractor than employee.

California Uber Driver Application Update #5 – Surge Pricing Change

From the referenced Uber web pages:

 

“During busy times and in places where a lot of riders are requesting trips, your map will now show Surge multiples instead of fixed dollar amounts.”

 

In my experience, driving in Denver, changing back to “Surge multiples” would probably not increase the average amount of income I earn per hour of my time compared to the current way Surge Pricing works.

In Denver when Surge Pricing meant a passenger’s fare was multiplied (1.3x to over 5x normal fare) passengers tended to wait for the Surge Pricing to go away before they requested a trip.

When (after completing a trip) I found myself in a Surge Pricing zone, I often stopped in a parking lot and got out to stretch my legs because it was rare I would get a trip request until the Surge ended or at least went down to a multiple just over normal fares… 1.3 times normal fare seemed most common price point that didn’t scare away potential passengers.

With the “Surge multiplier” method when the Surge Pricing Zone went away, I would get a trip request almost immediately for normal fare pricing supporting my belief passengers were waiting out the higher prices.

 

 

When Surge Pricing was high, 2x (double) normal fare or higher, I almost never got a Surge Priced trip request.

Since Uber’s Surge Pricing based on multiplying standard fares ended in Denver about a year ago my experience is passengers do request Surge Priced trips and I earn a few dollars on top of normal fare… during a very high Surge I have earned as much as $10 extra on top of the normal fare.

The current Surge Pricing method in Denver also locks in extra pay for drivers.

The way Surge Pricing currently works in Denver… if I’m in a Surge Zone and see in the Uber driver application “You’ll earn an additional $3.50 on your next ride” I earn the extra income even if the Surged Pricing Zone goes away… being in the Surge Pricing Zone locks in the extra income on my next trip.

Locking in additional income during Surge Pricing is a big deal and makes it more likely I will navigate toward (or stay in) a Surge Pricing Zone… if I reach the area on the driver application map with higher demand I am rewarded for navigating to the Zone even if the Surge Pricing goes away.

Another thing I like about the way Surge Pricing currently works in Denver… if I get a $3.50 Surge (as example) on top of a Minimum Fare trip I’ve earned about twice as much as I would have earned with standard Minimum Fare pricing alone… if I get a longer trip then all the better because more miles means a larger fare… plus I get the extra $3.50.

We’re talking about the best way to market higher pricing during higher demand.

It makes sense passengers are more likely to accept paying an additional few dollars compared to a fare multiplied to be double or more standard fare… the actual increase for the passenger might be the same but “double fare” or higher sounds worse and isn’t as easy for passengers to understand and accept what the trip will cost compared to “additional $3.50.”

Anyway… Surge Pricing using a multiple of the standard fare is complicated to understand making it more complicated for passengers to decide if they are willing to pay or try to wait out the Surge.

Adding a little extra to the price of a ride feels fair to me… and if it feels fair to customers it is a marketing plan with a better change of being successful over time.

I don’t agree with this update (although I’m clear it’s not up to me) since in my experience the current system works better for drivers (more income because more rides during Surge Pricing) compared to returning to a Surge Pricing system which seemed more likely to have passengers attempting to wait out the Surge.

My guess is Uber is “throwing a bone” to the very vocal rideshare driver advocacy groups in California … I suspect these groups think going back to the multiplier Surge Pricing would be a good thing meaning higher earnings.

And who knows… maybe in a city like San Francisco or Los Angles (Uber’s #2 & #3 highest gross income cities) the multiplier Surge Pricing does mean a higher average income per hour compared to the current system? 

In a city like Denver (2.8 million people in the metro area) or cities with smaller populations… where a Surge Pricing Zone rarely lasts more than15-30 minutes passengers tend to wait out the Surge and drivers who rushed to the Surge Pricing Zone, or found themselves “stuck” there, ended up completing a trip for normal fare.

More than once when Surge Pricing was a multiple of normal fare I would drive away from the Surge because that was the best way to get my next trip request… driving away from a higher demand is the opposite of what a Surge Pricing Zone is supposed to accomplish.

If I saw Surge Pricing 3x or higher I knew it was unlikely I would get a trip request until the Surge went away… as stated earlier drivers earn income by completing trips and earn nothing if they aren’t completing rides.

During the years Denver had “Surge multiples” I did get a handful of big fares including my “great white whale” fare where I earned $260 completing a trip where I would have earned about $30 with normal pricing… but this almost never happened… in my experience no trip requests during Surge Pricing was the norm.

From a marketing point of view $260 for a trip at normal fare the passenger would have paid about $40 doesn’t seem fair… at least not to me… but if what I read online is any indication, I could be the only one willing to publish this opinion.

But I don’t think I am the only one… and I don’t think passengers are happy when they are charged many times higher than standard fares… customers who feel taken advantage of are not happy customers… happy customers mean repeat business.

Also true happy customers might tell one person about their experience but unhappy customers tell everyone they know… we all know this marketing rule.

I earned that $260 fare around 11 p.m. on a Thursday… it was my plan to drive well into the early morning hours but with my “big fish” in hand I drove home and took the rest of the night off.

I hope charging, as Uber puts it: “…Surge multiples instead of fixed dollar amounts” does not come to Denver… I prefer the current system that feels fairer to passengers and I believe better for my rideshare business “bottom line” meaning my average income over time.

To use an analogy… I prefer to catch a basket full of small to medium size fish every day compared to landing a whopper ever once in a while.

The main reason this update in California doesn’t make sense to me is I don’t see how changing back to the multiplier Surge Pricing better supports a case that Uber drivers are independent contractors not employees.

I’ve learned when something doesn’t make sense it probably means there is an important piece of information missing from the equation.

California Uber Driver Application Update #6 – Know Exact Amount on Pool Trips

From the referenced Uber web pages:

 

“Unlike the estimated range you’ll see on UberX trips, your offer card will show the exact amount you’ll earn for every Pool pickup.  Every time a new rider is added to your Pool trip, you’ll also see the additional amount you’ll earn, as well as each rider’s destination.”

 

Currently when I get an additional passenger added to an UberPool trip, I know I’ll earn an additional $0.50 cents, but I don’t know how much more I will earn if I hadn’t gotten the additional passenger. 

Since I don’t know additional income I will earn when a passenger is added to an UberPool trip, I’m always hoping I don’t get matched with additional passengers during a Pool trip.  It’s common to see complaints about Pool trips in the online driver forum and many drivers say: “I never accept Pool trip requests.”

Of course when I think it through I know I earn at least a little more for each additional passenger because I get paid $0.60 per mile and $0.20 per minute during an active trip… additional passengers almost always require some amount of detour from a direct route to the first passenger’s destination… and the additional passenger’s destination could mean a longer trip so more income.

The way UberPool currently works picking up additional passengers always feels like a hassle compared to a private passenger trip. 

I’d love to know exactly how much the additional passenger increased my earnings… I’d feel better about completing UberPool trips.

This Uber Technologies Inc update is consistent with supporting a legal case that drivers are independent contractors… the driver knows how much they will be paid for the additional work and if they pick up the additional passenger the driver has made an independent contractor choice to do the additional work for the defined amount of additional income.

California Uber Driver Application Update #7 – Promotions To Lower the 25% Uber Service Fee

The final update communicated in the referenced Uber web pages has to do with an all-new promotion structure which sounds like it is replacing the current “Quest” promotions for California drivers.

Simply put current Quest promotions require a driver to complete a defined number of trips in order to earn a defined bonus payment.

In the months leading up to Uber’s initial public stock offering the Quest promotions I saw always paid around $100 for completing 50 trips between Monday at 3 a.m. and Friday at 3 a.m. 

During those months I was offered another weekend promotion again around $100 for completing 50 trips between 3 a.m. Friday and 3 a.m. Monday.

 

 

Currently as an Uber Pro Diamond level driver the promotion bonus amounts are not nearly that high… in order to earn a bonus in the $100 neighborhood I’d have to complete 70-90 trips in basically the same time frame.

To better understand how much time it takes to earn a Quest bonus (driving in Denver) know that when I look at my trips per hour over a period of time it’s always average 2 to 2.5 trips per hour.

This is an average, obviously there are times when I complete 3, 4, or even 5 trips during the same hour of time but other times (mostly when completing longer rides) my average trips completed per hour is lower.

When I calculate how much time it will take me to complete a Quest bonus offer, I always use 2 trips per hour in my thinking… if it takes less time great.

This means completing 80 trips to earn a Quest will require me to drive 40 hours in what is essentially four days or only three days during a weekend.

From the referenced Uber web pages:

 

“For example, if you choose a 50-trip Quest and complete 75 trips, you’ll get a lower Service Fee for the last 25 trips.”

 

So let’s say for example the “lower Service Fee” is 20% of the total fare instead of the 25% capped Service Fee discussed earlier… and the driver only gets the benefit of the lower Service Fee for trips completed beyond the defined number of trips in the Quest promotion… impossible to predict how much extra income a driver will earn.

I’ve been completing passenger trips for Lyft and Uber for almost 4 years and anytime there is a promotion where it’s impossible to know how much I will earn if I complete the requirements of the promotion… I ignore the promotion and stick to my routine.  If I earn the bonus doing what I would normally do then great… but I don’t plan my driving days attempting to earn undefined extra income.

When Uber was offering me $100 bonuses for completing 50 passenger trips, I was not completing any trips on the Lyft application (never went online on the Lyft driver application) because I was focused on earning the $100 bonus… I had to focus on completing only trips from the Uber application in order to reach the 50-trip mark in the defined timeframe.

With only the Uber driver application on there were times, most often during the middle of a weekday, where I might go 10 to 15 minutes or even longer waiting for my next trip request… running both Uber and Lyft applications at the same time it’s very rare I’m waiting as long for my next trip.

In my book the How to Be a Lyft and Uber Driver – The Unofficial Driver’s Manual, I go into more detail the simple rules I use to determine the best ways to focus my time on the road… and when it makes sense to run both Lyft and Uber applications or more logical to focus on only one application.

I don’t see how Uber 2020 Driver Application Update #7 supports a legal case that drivers are independent contractors and not employees... so again maybe it’s something the very vocal California driver advocacy groups have requested? 

I suspect this change would cost Uber less for Quest promotions but there’s no way to know for certain. 

Without a doubt some of the changes detailed in this blog will result in less income for Uber on a given passenger trip, perhaps this update will recover some of the “lost” revenue?

We have to remember that Uber has a lot of smart people on staff and when running a business it always makes sense to focus on business success meaning delivering the most revenue within the constraints of other business requirements.

It’s rare that I agree with the changes the extremely vocal “driver advocacy” groups propose… we’ve all seen the photographs of protests with drivers holding signs with catchy “sound bites” that sound like drivers are all being exploited by the TNCs… if you listen to the group’s spokesperson it would be easy to think they speak for all drivers.

Most of the time as a rideshare driver I don’t feel exploited and when I do feel a little exploited, I usually catch myself not following my own advice from How to Be a Lyft and Uber Driver – The Unofficial Driver’s Manual.

If I catch myself thinking negatively, I remind myself that the TNCs are running their businesses which is their choice… and I made the choice to be a rideshare driver and I can make other choices. 

Most often the details of what these “driver advocacy” groups demand sound to me like they are not willing to consider anything about what it takes to run a successful business and the group’s messaging suggests they believe Uber, Lyft, and the other TNCs owe drivers things like a guaranteed minimum hourly wage significantly higher than minimum wage and an additional payment to cover driver expenses.

As a rideshare driver I earn significantly more than minimum wage even after accounting for all of my expenses including self-employment taxes.

If you’re wondering how much you could earn as a rideshare driver check out my second book: Driving for Uber and Lyft - How Much Can Drivers Earn?

I spent more than 20 years working in corporate America helping to run successful businesses including companies that grossed over a billion dollars per year.

For years I spent countless hours participating in meetings where department heads discussed the details for the best to “make the sausage” and in my experience there is always a middle ground where a business can be financially successful and the workers; business partners; customers; etc. get a fair deal too.

In my opinion forcing the TNCs to do things making it harder for them to someday show a profit (none have yet) and even likely to cause them to fail financially make no sense… but from my point of view the way politics often works in California (like passing AB5) doesn’t make much sense either… at least not to me.

I don’t think the TNCs owe me anything they don’t already deliver… of course there is room for improvement… nothing is perfect, there is always room for improvement.

The TNCs provide a way for me to earn income almost 100% on my own terms and I’m honest with myself:

  1. I made the choice to become a rideshare driver and can make a different choice
  2. I did not have to apply for the rideshare driving jog… I did not get interviewed and hired because I was the best candidate and the TNC knew there was sufficient work to justify adding me to their driver pool
  3. I wasn’t promised anything by the TNCs
  4. I know anyone who qualifies to be a driver can be out on the road the same times as me and I accept that reality

 

I’ve learned to be thankful for but not to expect passenger tips and, in my book, How to Be a Lyft and Uber Driver – The Unofficial Driver’s Manual, I explain how this reality significantly helped my metal state of mind as a rideshare driver.

In my book How to Be a Lyft and Uber Driver – The Unofficial Driver’s Manual I provide detailed explanations why most rideshare drivers choose to complete passenger trips for more than one TNC (transportation network company) and I provide easy-to-follow directions how to leverage the every-changing financial incentives with the goal of maximizing your rideshare driving earnings.

Driving for Uber and Lyft - How Much Can Drivers Earn?

 

So there it is… a deep-dive into the updates for California Uber drivers which are arguably a direct result of the passing of AB5.

It’s interesting that Lyft has not announced any changes to their business model in California… maybe like me they are waiting to see what happens next.

Uber is the leader in the rideshare industry and as it’s been from the beginning Uber has the “deeper pockets” meaning it’s more likely Uber will be the first TNC to be sued on the question of whether rideshare drivers should be treated as employees or remain independent contractors.

California Assembly Bill 5 (AB5) clearly will serve to help shape the nature of being a driver for Uber Technologies Inc or Lyft… in California and, I believe in other states.

 

Time will tell and I’ll be here watching and reporting on the most important rideshare industry news… and while I’m watching I will continue to earn meaningful income as a rideshare driver.

If you are thinking about giving rideshare driving a try and you’d like to communicate with me one-on-one click here and I’ll provide meaningful answers to your questions about being a rideshare driver.

Until next time!

California Assembly Bill 5 and Uber Technologies Inc – Guide for Drivers