There’s a battle brewing over driver’s employment status and this week RSG contributor, John Ince takes a look at an interesting ruling in Florida that could affect drivers, updates us on Uber’s self-driving cars and shares a couple interesting taxi stories.
If you want my take on the whole 1099 vs W2 issue, head over to Forbes and check out the article I wrote a few weeks ago. You can also Follow Me on Forbes to get all my latest posts delivered straight to your inbox (one weekly e-mail).
Florida says former Uber driver is an employee, threatening its business model
Sum and Substance: Uber promises big things for its drivers, from plenty of work to flexible hours, and even discounts on vehicles that can be used when drivers aren’t on the clock. However one thing that is not promised when someone becomes an Uber driver is the legal consideration of being called an “employee” versus an “independent contractor.” Anyone who’s worked in a company with both roles knows the difference: the former comes with numerous benefits, including expanded legal protections and maybe even a dental plan. The latter does not. And if you’re a professional driver, whatever camp you fall into could also define who’s footing the bill for things like gas, maintenance, and car repairs. … If upheld, Florida’s decision could signal trouble for it and other companies that want a large, dedicated, and sustainable workforce without the overhead associated with traditional transportation companies.
My Take: With two court cases on this very issue going to jury in San Francisco the near future, this will be very interesting to watch. If Uber and Lyft have to start paying for gas, maintenance, repairs and insurance, their whole business model goes out the window. With it will go the astronomical valuations investors now put on these companies. Remember, investors base their investments on the numbers – and the numbers of a company that “employs” hundreds of thousands of drivers will look vastly different from a company that has independent contractors. Stay tuned – this could be a turning point in the development of this industry.
Taxi drivers fight back against Uber and Lyft
Sum and Substance: … taxi and limo drivers are taking more aggressive action in the face of ride-hailing start-ups. New York City-based Allstate Private Car & Limo is creating apps of its own to compete with Uber and Lyft. Vice President Gerhard Doetsch says the company’s managed to hold its core business due to consistency including flat rates and qualified drivers. The company has a fleet of 500 cars in the tri-state area. Its app is called “iRide,” and “gives us a good opportunity to compete once and for all,” Doetsch said.
My Take: Taxis are by no means out of this game. They can and are hiring techies to write apps that could help them compete effectively. Rounds one and two went to the ride-hailing companies. We still don’t know how subsequent rounds will go.
Once a sure bet, taxi medallions becoming unsellable
Sum and Substance: Until recently in America’s big cities, purchasing a taxi medallion—the city-issued license to operate cabs —was about as sound of an investment as they come. But with the rise of Uber and other ridesharing services, the value of taxi medallions are plummeting, leading cabbies and fleet owners throughout the USA worried that their industry will be decimated if local and state government doesn’t intervene.
My Take: One parties gain is another parties loss. Medallions were probably overpriced to a long period and their values are now coming more in line with reality.
Uber is One Step Closer to Picking You Up in a Self Driving Car
Sum and Substance: Uber users are a step closer to being chauffeured around town in driverless cars. The ride hailing service has started an early test into “mapping, safety and autonomy systems” as part of a part of plan to automate rides and eliminate the cost of drivers, according to the Pittsburgh Business Times. The test car was recently spotted on the road in Pittsburgh, where Uber has opened a research lab.
My Take: This is just a matter of time … but drivers need not worry … we’re still years away. What’s interesting here is that Uber is aggressively pushing and funding its Pittsburgh research facility at Carnagie Mellon University, while Google and other move along parallel paths toward the same destination.
Revenge Of The Uber Drivers
Sum and Substance: Uber’s simple-yet-brilliant shared-economy business model has been the source of its growth. It also has become its biggest vulnerability. I speak, of course, of its crowd-source drivers who use Uber’s software application to connect with people seeking a ride. To be fair, this is not an issue specific to Uber alone. Lucky Uber though: Because of its rapid success, huge size and $41 billion and counting valuation, it is inarguable the poster child for crowd-sourced labor, and all its potential drawbacks.
My Take: This article might alternatively be entitled: “Travis Kalanick’s Nightmare.” It goes into all the things that must haunt the Uber CEO … from rape allegations against drivers … to unsafe drivers … to media infatuation with the sensational stories about Uber … to the Florida ruling that classifies an Uber driver as an employee rather than an independent contractor … to drivers in LA who have found ways to game the app to stimulate surges.
A first look at Uber’s car for self-driving research
Sum and Substance: True to form, Uber isn’t being shy about its work developing self-driving cars. In February, the company announced its plans to create autonomous vehicles, and now, one of its research cars has been seen cruising the streets of Pittsburgh. The vehicle — spotted by the Pittsburgh Business Times — has the words “Uber Advanced Technologies Center” splashed across one side, and what looks to be a box of electronic components on the roof. The Pittsburgh Business Times notes that the device at the very top of the car was rotating, suggesting that it’s a LIDAR sensor being used to map the immediate surroundings. The device has an identical profile to LIDAR components deployed in Google’s self-driving vehicles but looks completely different to the equipment seen on the so-called Apple car.
My Take: More evidence that Uber is very serious about this. This story won’t be going away soon. Expect the unexpected.
Uber in Talks for $1 Billion Credit Facility With Banks
Sum and Substance: Uber Technologies Inc. is seeking a $1 billion credit line from banks, people familiar with the matter said, a move that could signal an eventual initial public offering. The car-sharing company has recently contacted a number of large banks asking them how much they would be willing to commit, and at what terms, to the loan, the people said. About six to seven banks are expected to be part of the facility, the people said.
My Take: This is just one more sign that Uber is moving towards an IPO. Note: to read this article you need a WSJ subscription.
What do you guys think about all of the latest rideshare news?
-John @ RSG
