Those volunteers formed a team to work on what was dubbed “Project Luigi,” a companywide initiative tasked with changing Uber’s app for California drivers, according to internal documents and people familiar with the company’s thinking who asked not to be named for fear of retribution. The initiative sought to revamp some inherent aspects of driving for Uber, including adding the ability to see estimated trip fares up front and then reject a trip without penalty.
Those new features — some now publicly unveiled — would help Uber build its case that its drivers are free from its control and are independent, key aspects legislators outlined as exceptions to the new statewide employee mandate.
“Obviously Uber wants to make the case that drivers are operating on their own because without that they have no argument on their worker classification,” said Bradley Tusk, an Uber investor who previously served as a political strategist for the company. “They clearly are worried about losing and want to have a backup plan.”
Uber spokesman Noah Edwardsen said the company is “making a number of changes to the Uber marketplace, which tens of thousands of California drivers use to find flexible work. While we are confident that drivers are already correctly classified, these product changes will further strengthen drivers’ independence and preserve their ability to work when, where and how they want.”
Uber and other California-based tech start-ups like rival Lyft, grocery-delivery app Instacart and food-delivery app DoorDash have built massive businesses worth billions of dollars by relying heavily on a network of independent contractors to drive, shop and deliver for them. That allows the companies to give jobs on demand and eliminates the need to offer most benefits afforded to part- or full-time employees.
But some of those workers have complained that the system leaves them with unpredictable hours and salaries, and little protection when the companies abruptly change policies or pay structures.
Assembly Bill 5, which passed the California legislature in September, aimed to give hundreds of thousands of gig economy contractors employee status, providing wage floors and benefits along with worker protections. According to the text of the bill, a worker would be considered an employee unless the hiring entity could demonstrate they were free from the employer’s control, their work was outside the usual course of the company’s business, and they performed their work as part of an independent job or business.
Uber said its contract workforce was not covered by the bill’s employment requirements and insisted the law would not have any impact on its services. Companies including Uber, Lyft and DoorDash vowed to fight it, pledging to each contribute $30 million to a ballot initiative aimed at establishing the independence of ride-hail contractors. Last week, Uber and Postmates also filed suit in California aiming to block the law, arguing it violates the due process and equal protection laws of the U.S. and California state constitutions.
Internally, Uber also launched Project Luigi, reflecting deep concern within the company over the impacts of the law, the people familiar with Uber’s thinking said, despite its arguments that the law’s employment provisions did not apply to ride-hail drivers.
“They have utilized every strategy from seeking exceptions, to declaring the bill doesn’t affect them, to now creating a new business model that they said was not achievable,” said Lorena Gonzalez (D-San Diego), the California assemblywoman who introduced the bill.
Employees involved in the project volunteered to devote three to six months to the effort, and were given a dedicated space inside Uber’s Market Street office in San Francisco to expedite delivery on one of the company’s top priorities.
As part of the revamp, parts of which were unveiled in early December, Uber announced California drivers would be able to see their estimated fares up front, giving them more power to determine whether a trip was worth their while. Drivers who cancel too many trips have faced penalties, such as a pause in their ability to give rides or even deactivation from the app. (Drivers are not allowed to cancel trips to avoid particular neighborhoods or discriminate against people or certain types of businesses, according to Uber’s community guidelines.)
But as part of the changes, Uber drivers can decline trips upfront based on the information they are provided, and the company said that turning down a trip would not negatively impact a driver’s Uber Pro score, a determinant of rewards and bonus incentives. The change is aimed at giving drivers an additional element of control over the services they provide, meaning drivers only accept “the trips you want to take,” according to Uber’s website. Trips canceled after they already start will negatively impact those scores, however.
It also unveiled the option for riders to “favorite” their drivers, which Uber said would “create opportunity for more business later.” In practice, the company explained, customers would be able to select a “favorite” icon for drivers who earn five stars for their trips. Then when scheduling a trip in advance, such as an early-morning airport journey, that driver could have the first pass at accepting the request when the ride is scheduled, according to Uber’s news release. The features are expected to be available to all of Uber’s California drivers by mid-January.
“We’re going to build more products that help you grow your business with Uber,” the company added, in effect prescribing them a role akin to livery service and black car drivers, while making its argument it was a platform with “zero drivers.”
Uber explains on its website that the new features are specific only to California. “These features are in response to feedback from drivers and the passing of new laws in the state of California,” the company says. “Some changes will take some getting used to. On balance, we are confident that they will improve your experience on our platform.”
Still, Uber’s California changes appeared to lay the groundwork for its response to regulatory battles around the country in 2020. In another internal memo, it said replicating the model established by Project Luigi “versus creating bespoke approaches market by market will be essential in 2020.”
Critics said the existence of what boils down to two different apps — one for California drivers and another for the rest of Uber’s markets — reflects a backdoor effort to build a different Uber experience to strengthen its argument against the employment test, rather than give workers employment protections. Under AB5, companies are required to prove that contractors for their services are performing work outside the core function of their operations. Uber has successfully argued under the same standard that its drivers are independent contractors, Uber’s chief legal counsel said in a conference call with reporters in September.
But changes by companies to add flexibility for their contractors will help — even if they’re to boost a case regarding AB5, said Steven Kramer, CEO of WorkJam, an employee engagement suite that helps gig workers organize their schedules. He expects other companies to follow suit.
“I think there’s an evolution that’s gonna happen around the gig economy,” he said. “I think that what Uber is proposing right now is a step in the right direction but there’s also a balance that needs to be found to make it a win-win by everybody.”
Uber driver Derrick Baker of San Francisco said he was awaiting the new features’ rollout — specifically the ability to see trip destinations so he knows whether a fare is worth accepting. He’s heard from other drivers that some of the new features are already active.
In the past, he said, he’s felt burned by trips where he waited unpaid in an airport queue for 45 minutes only to find out his trip was a small fare taking him just 10 minutes down the road.
Still, he has reservations. “It’s like they want us to be independent contractors, but they wanna pay us like a low-tier, entry-level employee,” Baker said. “They can’t have it both ways.”