Happy New Year! Now pay up.
That’s what it feels like with new fees, regulations, and taxes kicking in on Jan. 1 (on Wednesday) for ride-share trips on apps like Uber and Lyft.
In California, there’s a lot to take in. A statewide change to gig job classifications, called AB5, goes into effect as soon as it’s officially 2020.
That means on-demand drivers for apps like Lyft and Uber can argue they should be treated like employees with better pay and benefits, not like independent contractors. Lyft and Uber don’t plan to change anything yet with how it hires, pays, and employs drivers, claiming its drivers are truly independent workers who don’t need to be reclassified.
Uber’s head lawyer Tony West said earlier this year, “…drivers will not be automatically reclassified as employees, even after January of next year… Today, drivers have control over when, where, and how they work.”
Ride-sharing data service Gridwise looked at about 100,000 rides across the country and found the average driver’s hourly rate in the U.S. was $17.21. Last year, it was $18.50.
But the AB5 lawsuits could come in at the stroke of midnight. A lot is up in the air for the ride-hailing and other gig-based companies. Riders won’t notice it right away, but if drivers or food delivery workers switch to a set schedule or other changes, prices for rides are expected to rise.
In San Francisco, a new tax was voted into effect for all ride-share companies with rides that start in city limits. So for your first rides in the early hours of New Year’s Day, Lyft and Uber have to pay a 3.25 percent tax on that private ride. It drops to 1.5 percent on a shared ride or a ride in a zero-emission vehicle (that’s any electric car).
Chicago riders will notice heftier fees for riding in certain parts of the city and at certain times. In the downtown core, a $3 tax is tacked on to every private ride from 6 a.m. to 10 p.m. during the week. Outside that zone, all private rides will see ride fees almost double to $1.25, up from 72 cents. For shared rides downtown it’s also $1.25. Elsewhere shared rides will drop to 65 cents from 72 cents.
For those flying in or out of certain U.S. airports, more changes are a-coming.
In the Washington, D.C., area, Reagan National and Dulles International airports are bumping up their ride-hailing surcharges. Instead of a $4 fee for each trip from the airport, it’ll now be $5.
In Phoenix, Arizona, don’t even try to order a Lyft or Uber. After the city increased airport ride fees, both Uber and Lyft claim it will pull service at Sky Harbor International. It’s not supposed to happen until later into January, so get those ride-shares in while you can on New Year’s Day.
Back in October, the Phoenix city council approved a Jan. 1, 2020 increased surcharge for both airport ride-share pick-ups and drop-offs, at $4 a piece. That fee will go up each year until reaching $5 each way in 2024.
A Lyft statement said they were disappointed in the city council’s decision and would cease operations in January because of the fee increase “in order to prevent the unfair penalization of our drivers and riders. They should not have to shoulder the burden of the city’s budget shortcomings.”
Uber was similarly “disappointed,” stating, “Our riders and drivers should not be treated as a piggybank to fill the Airport’s budget holes.” The statement went on to explain that the ride-share company “cannot accept a partnership that unfairly burdens our shared passengers.” Therefore, drivers just won’t come to the airport anymore at an unset date in January.
2020 is starting out feisty and pricey.