To Cover New Driver Protections Uber Ride Prices In CA Increase

To Cover New Driver Protections Uber Ride Prices In CA Increase

Uber (UBER) said Monday that customers in California will see prices increase this week for rides and food deliveries to help cover the costs of new benefits for its workers.

The new flat fees, which range from $0.30 to $2 depending on the service and location, will take effect Monday. The price hike comes as a controversial new gig economy law, which Uber and its peers spent millions pushing to pass, is set to take effect this week.

Californians voted in November to pass Proposition 22, or Prop 22, which exempts companies like Uber from having to classify their gig workers in the state as employees entitled to basic rights and protections such as workers' compensation, unemployment insurance, family leave, or sick leave.

Under the new law, Uber's drivers and delivery workers are independent contractors with some benefit concessions, including a minimum earnings guarantee based on "engaged time," when a driver is fulfilling a ride or delivery request, but not the time they spend waiting for a gig. In a blog post and an email to drivers about the changes, the company said, "If you earn less than the guaranteed minimum over 2 weeks, we'll pay you the difference automatically."

Drivers will receive $0.30 reimbursement per engaged mile, lower than the IRS' estimated $0.58 per mile cost of owning and operating a vehicle. Its workers will also be enrolled in an injury protection plan beginning this week. And starting next year, those with 15 on-trip hours per week will get a stipend for healthcare.

To fund these benefits, consumers will pay a "California Driver Benefits Fee" that varies by city, and by service, the company said. Rides will cost an extra $0.30 to $1.50. For food deliveries through Uber Eats, fees range from $0.99 per order in Los Angeles to $2 per order in San Francisco.

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