Rideshare drivers are winning through the legislative process. In the last year, two states have enacted pathways to unionization. Unionizing is critical, but drivers need additional structural changes if they are to curb the largely unchecked power of gig corporations and win meaningful improvements in the terms and conditions of their work. 

One such structural change is access to information about what, exactly, a driver earns for a ride. Transparency about “take-rates” — the amount of a fare that Uber takes — could enable drivers to enlist riders in their campaigns. Because rideshare corporations hide behind black box algorithms, however, drivers face steep challenges mobilizing riders, in turn limiting what they might win through collective bargaining. Drivers are accordingly advocating for mandated transparency laws that compel rideshare corporations to disclose their take-rates to riders and drivers alike. 

Attempts to use the legislative process to win increased transparency have met intense opposition from gig corporations at levels perhaps not seen since efforts to classify gig workers as employees. While most efforts have not yet succeeded, one piece of legislation aimed at increasing transparency has survived, at least for now: Colorado’s SB24-075, the Transportation Network Company Transparency Act. 

Under Colorado’s new law, which enabled drivers to unionize with CWA, gig corporations are required to disclose fare breakdowns not only to drivers (who have had intermittent access to similar information), but also — and arguably more importantly — to riders. Since February, gig corporations have informed riders and drivers alike “the total amount of money that the consumer paid or will pay for the transportation task, excluding any tip,” and “the total amount of money that the driver received or will receive for the transportation task before any tip is added, excluding pass-throughs, if any.”

Uber is publicly challenging only the legality of the law’s disclosure requirements. That might be because the company sees the lawsuit as the only viable way to challenge the law, or because Uber believes that without the support of riders and a wealth of new information, drivers might be unable to win significant gains with a union alone. The U.S. District Court for the District of Colorado denied Uber’s motion for a pre-enforcement preliminary injunction last January, but the suit is ongoing with a trial scheduled for January of this year. 

Uber’s First Amendment challenges to mandated disclosures

Uber claims that the law both compels and prohibits speech and fails under strict and intermediate scrutiny. Uber’s central argument is that the law fails under so-called Zauderer scrutiny because the compelled speech is inaccurate, controversial, unrelated to a substantial government interest, and unduly burdensome. 

According to Uber, the disclosure requirements do not address the purported aims of the act (informing the public of Uber’s take-rate) because the disclosures compel “duplicate, misleading, and/or potentially inaccurate speech.” As Uber tells it, disclosing service fees and other charges misleads riders because fees vary, and the variability will unnecessarily anger customers who see high fees that may not represent Uber’s average take rate. But that cuts both ways; for some rides, that fee will be quite small. Uber also claims that the disclosure paints an incomplete and distorted picture by excluding information like passthroughs (the amount that drivers are reimbursed for tolls or similar charges) and because Uber can include certain operating costs, like insurance, only in smaller font. 

Uber argues that the law regulates controversial speech because drivers debate how much they earn — exactly the harm the law is intended to address. Uber also alleges that the law is unduly burdensome and will be even more so should other states adopt similar legislation.

Uber further alleges that the law has led to decreased tipping — and thus is contrary to the government’s interests — because of the timing of its tip screen. Under Uber’s theory, the delay in the tip screen following the ride will cause riders to forget to tip. But Uber cites no data that tipping has gone down, and some drivers have reported an increase in tips following the law’s effect. If there is a decrease in tipping, that might be the result of Uber’s voluntary, not state-mandated, removal of the option to tip during rides.

In denying the pre-enforcement request, Judge Domenico suggested only that the requirements “that micromanage the timing of certain disclosures and that force Plaintiff to ‘deemphasize’ some of the contextual information it wishes to convey” might impose a substantial burden. As other states contemplate similar laws, legislators may wish to consider how best to make legislation not unduly burdensome. 

Uber didn’t just take to the courts in response to the law. Uber sent a message to all drivers alerting them that because of the law, riders would no longer have the option to tip during rides. But as drivers were quick to note, nothing in the law requires that Uber remove the option to tip during a ride, only that Uber must first display information about the fare. And that makes sense — riders might want to know the breakdown before tipping, as it may encourage them to supplement a low fare with a larger tip. 

Uber also removed the ability for drivers who kept their acceptance rate at a certain level (say %70) to set area preferences. While Uber claimed this change was in response to the laws, many drivers saw the decision as retaliatory. 

The possibilities of disclosure requirements

If anything, the disclosure requirements do not go far enough to capture drivers’ real earnings. Take this example: a rider pays $70 for a 41 minute, 35-mile trip. In Colorado, the rider now knows that the driver receives $25. But she might not know that the driver drove 9 minutes to pick her up, making the trip 50 minutes. More importantly, that $25 does not account for wear and tear to the vehicle and the cost of gas for the trip. 

Drivers also want more information before accepting rides. In Colorado, drivers now see how much customers pay after the ride, but a different scheme, for instance, might require that drivers receive that information before accepting the ride, allowing drivers to make more informed decisions.

There is a risk of requiring too much disclosure. More requirements could add merit to Uber’s claims that the regulation is overly burdensome while decreasing the effectiveness of the disclosure. Faced with an excessive amount of information, riders might not appreciate the most critical information.

At the same time, broad disclosure requirements could shed light on TNC practices. For instance, with wide-scale reporting, states might be able to ensure that TNCs do not engage in retaliatory practices against drivers who decline rides. 

If more states (or Congress) enact transparency laws, drivers would be better able to hold rideshare corporations accountable. For years, rideshare corporations have pitted riders against drivers. Rideshare corporations threaten to raise prices in response to every legislative effort they disfavor, causing riders, especially those who depend on rideshare, to mount opposition. But with disclosure requirements, drivers would be able to build solidarity with riders.