Uber, the ride-hailing giant, recently announced an increase in its minimum age for new drivers in California. The move is most likely the result of higher steering and insurance costs.
In a statement, Uber said that the age limit for new Uber drivers in California will now be 25. Previously, the ride-hailing company allowed prospective drivers as young as 18.
The age increase is a result of California’s Assembly Bill 5, which makes it more expensive for Uber to provide insurance coverage for its drivers. This law, passed in 2019, requires ride-hailing companies and other gig economy workers to receive state-mandated benefits like workers’ compensation and unemployment insurance.
Higher insurance costs and stricter regulations have put a strain on Uber’s business model. With rising operating costs, the ride-hailing company has had to make changes to balance its budget. Increasing the age limit is one way for Uber to reduce its overall costs.
This move may also be part of Uber’s recent efforts to have a more positive public image. Last year, the company announced that it would no longer accept cash payments for rides. Now, with the new age-limit increase, Uber can cast itself in a more responsible light.
The new age requirement is expected to be in effect in California by the end of 2021. It could have a significant impact on Uber’s driver demographics in the state. Uber already has a smaller portion of younger drivers than its competitor, Lyft. With the age increase, that percentage could become even smaller.
At the same time, the higher age-limit could also help Uber recruit more experienced drivers. By limiting its driver pool to those with more experience, Uber could improve its customer service and driver ratings.
Overall, Uber’s increase in its minimum age for new drivers in California is a reflection of the company’s need to balance its budget with increasing insurance costs and the regulatory requirements of the industry. It is also part of their efforts to promote a more responsible image.
