Unfair Rideshare? Upholding of Colorado Transparency Laws Riles Uber
In 2024, Colorado passed laws requiring transparency in pricing by transportation network companies (TNC) that showed how much of the fares actually went to the drivers. Uber, by far the largest rideshare company in the world, was not a fan of that plan. They filed for an injunction on January 11, 2025.
A federal court ruled against the rideshare giant on January 31, the day before the new laws went into effect. Uber responded by removing the ability to tip drivers during the trip from their app in Colorado and blocking access to driver rewards. Do the new laws make things better or worse for the independent contractors who drive for them?
Show Me the Money
Uber's business practices have long come under fire for a variety of reasons. They've caught flack for their surge pricing policy, which raises rates during certain times and at certain locations. But it's their treatment of their drivers that has garnered the most scrutiny and criticism.
At the end of the 3rd Quarter of 2024, Uber had 7.8 million drivers providing service for their 58.6 million customers. These drivers are not employees of Uber — they're independent contractors. They have to supply their own vehicle and are responsible for maintenance and fuel.
Uber defines itself as a technology company that takes a fee for providing a service platform linking customers to drivers. While Uber claims to only take 25% of each fare, drivers have insisted that added charges put more of their end in the company's coffers. Colorado decided to do something about it.
Peeking Behind the Curtain
Colorado passed two bills in 2024 designed to provide transparency on how TNCs process fares and give drivers more protection. Both bills order TNCs to disclose how much of the fare they paid goes to the driver.
Effective as of Aug. 7, 2024, SB24-075, also known as the Transportation Network Company Transparency law, gives TNCs until May 1, 2025, to develop a driver deactivation and suspension policy that explains the procedures involved and outlines a method for reconsideration. This policy must go into effect by June 1, 2025.
SB24-075 forbids the forcing of arbitration on drivers as the sole means of settling disputes. It certifies the establishment of a driver support organization to help with suspensions, deactivations, and disputes. Violations of SB24-075 are subject to fines.
HB24-1129, Protections for Delivery Network Company Drivers, covered some of the same ground as SB-075. In addition to fare disclosure measures and a deactivation policy, it stated that tips couldn't be deducted from the fare total and must be paid in full to the drivers. HB24-1129 gave drivers at least 60 seconds to decide whether to accept a delivery task offer and included safety measures such as the securing of pets by customers.
Tipping the Scales
Uber, not pleased with the impending changes, filed a 51-page complaint in federal court on January 11, 2025, for a temporary restraining order and preliminary injunction against the Colorado laws. The company claimed everything from First Amendment rights violations to high insurance rates to unfair font sizing as justification for court intervention in their motion.
While expressing confusion over why Colorado ordered the breakdown of costs after the conclusion of a fare rather than before, U.S. District Judge Daniel D. Domenico denied Uber's Motion for a Preliminary Injunction. While he didn't see just cause to block the laws, Judge Domenico didn't preclude Uber from further pursuing relief through the courts.
In the meantime, Uber is required to follow the laws. That doesn't mean they didn't have a trick up their sleeve.
Slamming on the Brakes
In an email sent to their Colorado drivers in the aftermath, Uber blamed the new laws for changes to their arrangement. As a result, the Uber app would no longer accept tips on Colorado fares. Uber also took away several driver rewards such as area preferences, extra destination filters, and priority/premium support.
Will the Colorado laws designed to help rideshare drivers hurt them instead? Some have added personal QR codes to their back seats to facilitate tipping, but it's unknown if that will be effective. In any case, rideshare customers can now see exactly how big a bite the TNCs are taking out of their drivers' cookies.
Related Resources
- What Are the Laws on Tipping? (FindLaw's Law and Daily Life)
- Can I Sue if I Signed an Arbitration Agreement? (FindLaw's Arbitration Law)
- What Happens When a Lyft or Uber Driver Leaves With Your Belongings? (FindLaw's Law and Daily Life)
