On January 1st, Assembly Bill 5 (AB5) came into California, requiring companies to pass the ‘ABC’ test in order to classify their workers as ‘independent contractors’, a classification used by rideshare companies such as Uber and Lyft for their drivers. The bill declares that companies should primarily be hiring employees, meaning workers who are entitled to a minimum-wage pay, sick-leave, and benefits, rather than independent contractors. An independent contractor, as defined by AB5, requires that the worker is free from “the control and direction” of the company they work for, that they perform work outside of the company’s usual course of business, and that they regularly perform work “of the same nature” outside of the employer they are independently contracting for.
In an effort to meet the freedom of control and direction requirement of AB5 and preserve their workers’ status as independent contractors, Uber is testing a system in which drivers are allowed to increase the price of their own rides by a maximum of five times the original cost of the ride. This system is only being tested in Sacramento and two other cities, and within Sacramento is only being tested for rides to and from Sacramento International Airport.
With the risk of a price increase for rideshare users comes an affordable public transit alternative for Sacramento commuters from Sacramento Regional Transit (SacRT). As part of the ‘SmaRT Ride’ collaboration between SacRT and private rideshare network design company Via, an app was launched on January 6th that allows commuters to call SmaRT Ride vans as they would other rideshare vehicles. The app then directs them to a nearby area for pickup in order to reduce overall transit times for passengers and increase the efficiency of routes. The SmaRT Ride service costs $2.50 per ride, $1.25 for riders eligible for discounts, and is free of charge for parties of 5 or more.
Additionally, a Del Paso Heights-based non-profit organization called Green Tech Education and Employment is developing a zero-emissions rideshare hub designed for commuters they designate as ‘low-income’. The hub is funded by a $950,000 California Air Resources Board grant with space provided by the City of Sacramento near Grant Union High School. Green Tech has announced that the hub will have a lot where hydrogen-powered electric cars for rideshare use are parked. Commuters that qualify as ‘low-income’ by Green Tech can register as members and have access to the cars in the lot to drive to their destination on the condition that they are returned afterward to the charging station at the hub.
Uber has announced its intentions to attempt to keep their workers classified as independent contractors. With the possible rise of Uber ride rates if the price-increase system were implemented, affordable rideshare alternatives such as SmaRT Ride and the Green Tech hub could see success in Sacramento.