The safety of drivers and passengers was at stake this week with two separate but huge stories about Uber’s gun policy and an unfortunate incident involving an Uber driver and a minor. Today, RSG contributor, John Ince, takes a look at these stories and more.
Sum and Substance: Car service app juggernaut Uber has quietly changed its policy to prohibit its drivers from carrying firearms while they’re on duty. Previously, Uber had deferred to local laws when it came to whether or not its drivers could carry guns. In an update to the Legal section on Uber’s website there’s a new “Uber Firearms Prohibition Policy,” first noticed by The New Republic. It says: We seek to ensure that everyone using the Uber digital platform — both driver-partners and riders — feels safe and comfortable using the service. During a ride arranged through the Uber platform, Uber and its affiliates therefore prohibit possessing firearms of any kind in a vehicle. Any rider or driver found to have violated this prohibition may lose access to the Uber platform.
My Take: Belatedly it appears the Uber has recognized that it’s sitting on a PR power keg with this issue. When the Chicago driver used a gun in his car to defuse a situation nearby, he was hailed as a hero, but it raised eyebrows when passengers realized that their driver could be packing heat. Here again, we see that Uber must be ultra sensitive to fallout in the media from any issue that potentially compromises the safety of the passenger. Without that, after all, Uber doesn’t have a business.
Sum and Substance: A driver attacked a 13-year-old Virginia girl—and now her mom is suing the ride-sharing app for millions. The mother of a 13-year-old Virginia girl is suing ride-sharing app Uber for $2 million, claiming her child was sexually assaulted by one of its drivers—a man whom, the complaint charges, the San Francisco startup should have known to be unsafe. On up to 20 separate occasions in October and November of 2014, the unnamed teen used Uber to catch a ride back and forth from her middle school. More often than not, 39-year-old Isagani Marin was the driver who pulled up, according to the complaint filed in a Virginia Beach circuit court this month and posted by Courthouse News. During these trips, the mother alleges that Marin acted inappropriately, asking her daughter questions like, “Can I buy you a pair of panties for your birthday?” and “‘What days does your mom work and when is she not home?” He also repeatedly made the child pinky promise that she would not “get a boyfriend until you turn 18 years old,” according to the complaint.
My Take: With 200,000 drivers worldwide and almost all of them only loosely vetted, this kind of thing is inevitable. The more intriguing aspect of this is how Uber responds. According to the article, “spokesman from Uber responded to The Daily Beast’s request for comment with a statement: “We are extremely troubled by these allegations and have cooperated fully with law enforcement.” Okay … but what’s really going on behind the scenes. My guess is that Uber is instructing it’s lawyers to ask questions like, “If you had any concerns about our service, why didn’t you personally drive your daughter instead of giving your daughter carte blanche to request an Uber using your credit card?” The other question I’m asking is, “If this 13 year old girl did in fact give this driver multiple low ratings, how did he survive the 4.5 deactivation threat and why was he continually paired with this girl.” The case raises a whole host of big unanswered questions about the legalities and risks of transporting underaged passengers. Millions at stake … chickenfeed to Uber … a sweepstakes to the the plaintive if she wins (or settles). User’s biggest risk in this case isn’t the judgement or settlement amount, but the potential PR fallout … and the plaintive knows this.
Sum and Substance: In the wake of a ruling from a California Labor Commissioner Wednesday that said Uber driver Barbara Berwick was an employee, it sounded …“worst nightmare,” a bad omen that “should frighten” and “ blasts a big hole in” all contractor-based businesses. One reporter wondered on Twitter if Uber’s $50 billion valuation priced in the fact that it could be “instantly vaporized” and said he’d been told the lawsuits were “an existential threat” to the company and others like it. Well, not quite.
My Take: The media pendulum is swinging back this week after a series of stories that put the CLC ruling in a stark light. The key takeaway from this story is that this whole issue is going to take years to play itself out, after appeals. In that time, Uber will have plenty of opportunity to tweak it’s business model and perhaps come up with a new hybrid employee / dependent contractor status.(See article below) They’ll probably lose some money and face in the process, but at least they’ll come out whole. This is what concerns investors most. For the moment Uber (and Lyft) have seemingly unlimited access to capital but good press is in short supply.
Sum and Substance: On Monday, grocery delivery startup Instacart announced a new option for some of its contract workers: become an employee. This comes after last week’s ruling that one San Francisco Uber driver is, in fact, an employee. The finding is shining a spotlight on Uber and hoards of other startups that rely on contract workers. Since launching in 2012, Instacart has used contractors to pick up and deliver groceries to customers. But starting Monday, some of Instacart’s Chicago workers can choose to be part-time employees. This just applies to the “personal shoppers” who pick out items for customers; its drivers will remain contract workers for now. Instacart’s decision to explore an employee model came before the Uber finding. The startup — which has raised $275 million in venture capital and is valued at $2 billion — has been experimenting with part-time employees in a Boston pilot since February. “The data showed that this change improved the quality and efficiency of order picking and made for a better customer experience,” said Instacart founder and CEO Apoorva Mehta in a press release.
My Take: This definitely seems to be the direction we’re moving. Tech companies are innovators and faced with more and more legal challenges to their business model, we can expect them to apply their financial resources and political clout to the challenge of coming up with a worker classification that makes sense in the modern economy.
Sum and Substance: Uber reportedly has landed a significant investment from Chinese fund manager Hillhouse Capital Group that could reach $1 billion. According to people with knowledge of the deal, quoted by the Wall Street Journal, Hillhouse Capital is the lead investor in a group that will buy convertible bonds in Uber that will convert into shares at a discount to the company’s IPO price. The deal has yet to be finalized. …
My Take: China, the most populous country in the world is also the biggest potential prize in the Rideshare Wars. But the competition is fierce. Didi Kuaidi has leg up on Uber because they’ve been there longer, but this hasn’t phased Travis Kalanick who continues to tout Uber’s progress in China as one of the main reasons investors should continue to pour capital into the company. His pitch seems to be working.
What do you think of the week’s top rideshare stories?
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-John @ RSG
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