New Bill Caps Ride-Share Take Rates at 25% and Forces Apps to Disclose Pay Algorithms

This proposed legislation, the Empowering App-Based Workers Act, takes aim at the black box controlling the gig economy. Simply put, it forces platforms like ride-share and delivery apps to pull back the curtain on how they use automated systems and electronic monitoring to set pay, assign work, and even fire people. It mandates extreme transparency, including itemized receipts for every job, and, most significantly, slaps a hard cap on how much the platforms can keep from a customer's fare in the transportation sector.

The Algorithm Unmasked: Weekly Pay Statements and Itemized Receipts

If you’ve ever completed a delivery or ride and wondered exactly how much the platform kept versus what you earned, this bill is designed for you. Section 4 requires platforms to provide an itemized receipt after every work assignment. This receipt must clearly show the total amount the consumer paid, the tip amount, the amount you were paid, and—crucially—the platform’s 'take rate' for that specific job. On top of that, platforms must send a detailed weekly pay statement showing your total pay, total customer payments, the weekly average take rate, and your effective hourly wage (total pay divided by total 'time worked'). This means no more guessing games about where the money goes; you get the full breakdown, in a downloadable format you can keep for four years.

The 25% Cap: What It Means for Drivers

For anyone driving for an on-demand transportation service, Section 5 contains the biggest news: a hard 25% cap on the platform's 'take rate.' This means that for every dollar a customer pays (excluding tips), at least 75 cents must go to the driver. The bill explicitly defines the take rate as the percentage of the total charged to the consumer that is not paid to the worker. This is a massive shift from current reports where platforms often keep 40% to 60% of the fare. The goal here is simple: stop the race to the bottom and ensure drivers are getting a fair share of the revenue they generate.

No More Arbitration Traps and Data Limits

For years, gig workers have been forced into mandatory, predispute arbitration agreements, meaning they sign away their right to sue the company in court or join a class action lawsuit before they even start working. Section 13 voids these agreements and joint-action waivers, giving workers back their access to the court system. Furthermore, platforms are generally restricted from collecting worker data except during the time the worker is actually working for the platform, aiming to curb excessive surveillance. The bill also prohibits platforms from using automated systems to infer sensitive personal data like immigration status, union sympathy, or health status.

The Potential Catch: Big Penalties and Regulatory Power

While the protections are strong, the bill also introduces some areas that could lead to friction. The penalties for non-compliance are steep—up to $20,000 for failing to provide required notices and $25,000 for retaliation against a whistleblower (Section 9). This creates a huge financial risk for platforms, even for administrative errors. Additionally, Section 12 severely limits judicial review of the new regulations issued by the Department of Labor, meaning courts can only check if the agency's interpretation is 'reasonable.' This effectively gives the Secretary of Labor significant power to define the rules without much pushback, which is a major win for regulators but a potential concern for platforms seeking clarity.

Finally, the bill mandates that platforms cannot reduce a worker's scheduling flexibility to comply with these new rules (Section 14). This is a crucial provision, as platforms might otherwise try to argue that guaranteeing a certain pay floor or take rate requires them to impose rigid schedules. This clause protects the very flexibility that makes gig work attractive to many, though platforms will likely struggle to balance the new pay rules with maintaining the current level of on-demand freedom.