For years, rideshare drivers across the US have asked Uber, Lyft, and other rideshare companies to share information on where a passenger’s destination will be before a trip is accepted.
And on December 3rd, 2019, drivers in California got what we have all been asking for:
Drivers have wanted to see passenger destinations before accepting trips for YEARS because it gives drivers the ability to pick the best rides for them. That means rides that are going toward where we want to go or are more profitable.
And now, when drivers in California get a ping, they’ll see a screen that looks something like this:
This is AMAZING news… but we all know that Uber and Lyft don’t do anything purely out of the kindness of their hearts. So what’s in it for them? Why is Uber just now letting drivers see passenger destinations before they accept a trip?
Why is Uber letting drivers see where passengers are going now? AB 5
In the email that Uber sent to drivers announcing this change, Uber used a word that I think you’ll be hearing from them A LOT over the coming months and years.
In fact, their email read as follows: “Starting today, and through the early months of 2020, California drivers will begin to see some changes that reflect our commitment to being a truly flexible platform”.
What Uber wants to do is ensure that drivers know that they have the flexibility to choose when, where, and how they drive, so there is no question (in Uber’s opinon) that drivers are independent contractors.
You see, rideshare companies now need to pass what is called the new ABC test in California in order to categorize workers as independent contractors.
Under the new “ABC” test, an individual is presumed to be an employee, unless the company can prove all of the following:
A) that the worker is free from control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
By allowing workers to be more “flexible” Uber believes that they are satisfying point A and ensuring that workers are free from the control and direction of Uber.
But could there be unintended consequences?
Regardless of Uber’s ulterior motives, this is a win for Uber drivers.
But, some people believe that adding this feature will have the unintended consequences of destination discrimination.
Destination discrimination is the practice of discriminating against riders based on their destination and is prohibited by Uber’s community guidelines. This is why you see drivers getting deactivated for calling passengers, asking their destination, and then canceling the trip if they don’t like where it’s going.
Critics of this move by Uber fear that if you are for instance getting a ride to a low-income neighborhood, you might have a harder time getting a ride because drivers won’t want to drive into that area… and they could be right.
From a purely economic standpoint, if a driver feels that a certain area is not going to give them another ride, they might not feel that driving to that area is going to maximize their income because they would have to drive back out of that area to find another ride.
It makes economic sense that drivers would be picky with where they choose to drive. It’s the entire reason that drivers have been wanting this feature for so long.
How big of a problem will this be?
In short, we don’t know if this destination discrimination will become a bigger issue or if it will become an issue at all.
But let’s be clear, Uber knows this is a potential problem, and that’s why they never wanted drivers to have the ability to see passenger destinations to begin with.
A number of news outlets like CityLab have reported on this potential issue and Stephen Zoepf, a lecturer at Stanford who coauthored the NBER study of ride-hail discrimination has said: “I can almost guarantee you this will have unintended consequences”.
And as Uber drivers, we all know that there are more and less profitable areas of our cities and we simply follow the money as best we can, which could mean not taking some trips to areas we don’t think are going to be profitable.
So while it’s unclear whether this will become an issue, it is clear that the risk is there.
So what can be done?
If destination discrimination does become an issue, I expect Uber to act quickly and swiftly by implementing some sort of “destination surge” meaning drivers will get a bonus not based on the pickup location, but the dropoff location.
This would be a win-win for passengers and drivers. Drivers are going to be happy to take an extra $8 – $10 to drive to a less profitable area since the “destination surge” fee would make up for potential lost income and then some.
Passengers will also not face longer wait times simply because drivers don’t want to drive to a certain area.
What do you drivers think?
No one knows exactly how things will play out here.
But more than anything, I’m curious to hear what you drivers think.
If and when Uber and Lyft allow drivers to see passenger destinations before they pick them up in your city, will that cause destination discrimination? And if so, is there anything that can be done?
Let us know in the comments below!