Uber has made changes to its app in California in response to the passing of Assembly Bill 5. The new California law requires that gig economy workers be reclassified as employees rather than contractors, according to a report by The Verge.
The law applies a test that would determine whether gig economy workers would qualify as contractors. It went into effect in California on Jan. 1st.
Uber implemented changes to its fares and features to comply with the new law. For passengers, Uber will now show an estimated price range instead of upfront pricing on trips. The final price will be calculated at the end of the trip based on the actual time and distance traveled. Before if the fare estimate was too low or too high, Uber would eat the difference or pocket it, according to the report.
Additionally, passengers can now add drivers to a “favorite” list. Uber is also getting rid of some rewards benefits including price protection on a route and flexible cancellations.
For drivers, Uber will end flat surge pricing that occurs during peak demands. Before accepting a ride, drivers will now be able to view more trip information, such as a trip’s time, distance, destination, and estimated fare. They will be able to reject a ride request without penalty.
California rides received an email from Uber last week that the changes were now live.
“These changes may take some getting used to, but our goal is to keep Uber available to as many qualified drivers as possible, without restricting the number of drivers who can work at a given time,” Uber wrote in its email to riders. “We want your Uber experience to be excellent, and fewer drivers on the road would mean a more expensive and less reliable service for you.”
Uber and Postmates are trying to block this new law with a recent lawsuit against the state of California, according to the report.
By reclassifying contractors as employees, Uber could face higher costs. Experts estimate that a workforce of employees could cost companies 20% to 30% more than a workforce of contractors, says the report.