Uber to test feature allowing some drivers to set their own fares

Uber is testing a new feature in some areas of California that will allow some drivers to set their own fares.

Starting Tuesday morning, drivers picking up riders in Santa Barbara, Palm Springs and Sacramento, Calif., are able to charge up to five times the cost that Uber sets, an Uber official told The Hill.

The ride-sharing company is starting this program in an effort to give drivers more independence after the state’s gig-economy law went into effect this year. 

Uber confirmed the initiative in a statement obtained by The Hill.

“We’re now doing an initial test of additional changes which would give drivers more control over the rates they charge riders,” an Uber official said.

Under this test, drivers can increase the costs of drives in 10 percent increments. When a rider requests a vehicle, the rider will be matched with the driver with the cheapest cost, while drivers with higher fares are matched as demand increases. 

The potential downsides to the program could be that drivers who set fares too high will have fewer trips and longer waits, while riders may have to pay more for trips, The Wall Street Journal noted.

Uber is attempting to halt any possible damage to its business, a person who worked on the feature told the Journal, and will determine whether to extend the initiative statewide after receiving feedback on the limited rollout.

The move comes as a California law saying Uber needs to treat drivers as employees with sick days and other benefits rather than independent contractors went into effect on Jan. 1. At least two federal lawsuits have been filed against the company saying it mischaracterized its workers.

Updated at 1:13 p.m.