In an effort to attract more drivers, Uber Technologies Inc is testing a new driver earnings algorithm
in 24 U.S. locations that allows drivers to check pay and destinations before taking a trip and
increases the incentives for drivers to take short rides.
The modifications, which are presently in test programmes, are the most extensive adjustments to
Uber’s driver compensation algorithm in years, and they come at a time when the business is still
attempting to re-engage drivers who left at the onset of the pandemic. Consumers’ fares are not
affected.
Drivers have long wanted the right to check the fare and location before accepting a trip, but Uber has
resisted, claiming that it would allow drivers to cherry-pick trips or discriminate against clients in low-
income areas.
Uber already has a similar programme in California, which was developed in the aftermath of a 2020
state battle over gig worker rights to demonstrate that its drivers are independent contractors.
However, the company stated that its most recent fare experiment in the United States has nothing to
do with gig worker legislation. The test has been implemented in places across Texas, Florida, and the
Midwest where changes for gig workers are not on the agenda.
“Gig work is very competitive, not just with Lyft but other platforms, and we think this feature really
enhances our platforms competitiveness versus others," said Dennis Cinelli, Ubers head of mobility
in the United States and Canada.
Cinelli stated that the salary changes would have no effect on consumer costs at this time, adding that
the modifications “aren’t financial elements.”
Uber declined to comment on the financial implications of the changes, which could result in higher
costs for short journeys.
Cinelli stated that the company has not witnessed any discrimination by drivers in California since the
policy’s implementation in 2020.
“We wouldn’t have rolled it out at this time otherwise,” he added, adding that Uber has the option to
deactivate drivers who refused rides based on race or low-income areas on several occasions.
Cinelli explained that providing drivers with upfront compensation details meant the company had to
cut revenues for longer trips to prevent drivers from skipping short rides.
According to Uber, data from some cities with upfront pay reveal a 22 percent average boost in driver
earnings for trips where the distance to the pickup site is greater than the distance of the journey
itself.
