$8.43 Million Settlement Coming to California Drivers

SoftBank ditched its stake in Uber this week while Uber agreed to an $8.43 million settlement in California. All this and more in this week’s roundup with senior RSG contributor Paula Lemar. 

Court Approves Uber’s $8.43 Million California Driver Settlement (Bloomberg)

Summary: Uber Technologies Inc. will pay $8.43 million to a class of California drivers who alleged they were misclassified as independent contractors under a settlement approved by a federal judge approved.

Some 1,006 drivers opted in to the settlement that provides an average settlement award of more than $8,000. Some drivers stand to receive more than $50,000 in the settlement, court filings said.

The accord ends separate lawsuits that Christopher James, Spencer Verhines, and Kent Hassell filed, alleging Uber failed to pay minimum wage and unlawfully required drivers to pay business expenses, including vehicle maintenance costs, gas, insurance, phone, and data….

My Take: Another day, another settlement. Sounds like the payouts may be significant for most. Are you part of this settlement? We’d love to hear what you’re going to receive! Be sure to share your payouts with Harry at harry@therideshareguy.com.

Japanese giant SoftBank dumps its entire stake in Uber as losses mount at its investment unit (CNBC)

Summary: SoftBank on Monday disclosed that it sold its remaining stake in U.S. ride-hailing giant Uber as the Japanese conglomerate looks to raise cash amid mounting losses at its investment unit.

The move comes after SoftBank’s Vision Fund, its technology investment vehicle, reported a 2.93 trillion Japanese yen ($21.68 billion) loss for the June quarter, one of its highest on record.

SoftBank said that it sold its Uber holdings at some point between April and July at an average price of $41.47 per share. SoftBank said the average cost per share was $34.50, so the company sold the Uber stake at a profit.

The Japanese giant did not say how much the sale of Uber brought in for the company nor the size of the stake it offloaded.

SoftBank invested in Uber in 2018 and again in 2019 to become its biggest shareholder at one point. Last year, SoftBank sold about a third of its stake in Uber, CNBC reported. It has now offloaded whatever shares it still held.

Uber shares closed Monday down 0.5%….

My Take: In response to this news, our readers on Facebook had this to say:

Len stated, “Uber has always been a scam subsidized by sucker investors…. Kalanik walked away a billionaire.”

To which Robert replied, “So did all the original investors during the IPO.”

Robert also emphasized that now is the time to “get out”.

Is this going to be a downfall for Uber? Or will everything shake out in the end?

Lyft creates media division to cash in on in-car ads (TechCrunch)

Summary: Lyft has created a new business unit to beef up its digital advertising business across its tablets, mobile app, rooftops and bicycles, producing the potential to add billions of dollars to its bottom line.

The ride-hailing company announced on its blog Monday that Lyft Media will help cash in on the growing market for in-vehicle digital ads, as cars become more connected and begin to feature multiple, larger infotainment screens. The announcement comes days after Lyft and its biggest competitor, Uber, announced robust second-quarter financial results.

Both face increasing competition for location-based advertising. Uber, which entered the ad business in 2019 via its UberEats app before rolling out ads across its rooftops and ride-hailing app, said its advertising business could reach $1 billion in revenue by 2024.

Lyft’s blog post outlines a four-fold plan for raising ad revenue and competing against rivals….

My Take: This is a unique move. Not many have explored this area of income before. Perhaps Lyft will unlock a way to remain competitive and relevant while building toward profitability. Advertising tends to work (otherwise, it wouldn’t exist anymore).

I feel like others have dabbled in the in-car advertising space, but few have really built it up to be what it could and should be. If this also creates more revenue for drivers, I feel like many would take the opportunity to give it a shot. Of course, the high driver turnover rate is one of the hurdles. Getting in-car advertising to long-standing drivers should be the highest priority.

Also in the news…

Why is Lyft funding California Proposition 30 on electric cars? (Twitter)

Thoughts: Check out what Harry and our Twitter followers had to say on this subject.

Travel Startup Boatsetter Raises $38 Million (Skift)

Thoughts: This AirBnB type of business has worked well across other markets, so it’s no wonder it’s being tested in the boat industry as well. Good for them for finding a niche and capitalizing on it.

DoorDash shrugs off inflation worries with record delivery orders (Financial Times)

Thoughts: When your customers still choose you despite the cost of inflation, you’re sitting pretty. Well done, DoorDash, you’re proving to still be relevant in this ever-changing world.

What do you think of the market impact of SoftBank selling their shares of Uber? Do you think it’s a make or break situation? Share your thoughts in the comments! 

-Paula @ RSG