The coronavirus pandemic and subsequent shutdowns have brought to light many latent issues in the rideshare and gig economy. Could this pandemic bring about a colossal shift in the way gig businesses are run? Senior RSG contributor John Ince breaks down the latest news below.
Jobless Claims by Uber and Lyft Drivers Revive Fight Over Labor Status [NYTimes]
Sum and Substance: California has been in a standoff with the ride-hailing companies Uber and Lyft over their drivers’ status under the law: whether they are contractors or employees. Now the coronavirus crisis has put a spotlight on a related question: Who is responsible for helping those drivers when there is no work?
The companies are urging their drivers nationwide to apply for emergency unemployment benefits that federal legislation established last month for the self-employed. But there’s a catch in California: The state doesn’t typically consider them self-employed.
My Take: It’s a tough situation. Do you take the cash and let the situation slide? Or do you leave the cash on the table for the sake of principle? Drivers face that choice now, and I think they’re doing the right thing – taking the cash.
Uber launches new delivery services as demand for ride-hailing plummets [The Verge]
Sum and Substance: Uber is launching a pair of new services called Uber Connect and Uber Direct as the ongoing COVID-19 pandemic minimizes demand for its traditional ride-hailing business. They are focused on moving items rather than people. Uber Direct will offer deliveries from shops like pharmacies and pet stores, while Uber Connect is a same-day courier service to let Uber users send items to one another.
My Take: Again, this makes sense. Uber’s numbers from ride-hailing are way down… so give people what they want. And hopefully nobody catches the virus.
Uber gets green light to chase U.S. government contracts [LATimes]
Sum and Substance: Uber Technologies Inc. won approval to serve as a business vendor to the U.S. government, enabling the ride-hailing giant to vie for an estimated $810 million in spending over the next five years.
Politicians and campaigns have for years relied on Uber for rides to and catering for their events, but the decision Monday is the first clearance for federal agencies to sign contracts with the company. It’s a rare bright spot as Uber struggles to adjust to the effects of the coronavirus pandemic….
My Take: Uber is going to need new revenue sources. $810 million is a lot of money. If they can win some portion of the available funds, that’s a huge plus.
Uber argues ‘fraud’ absolves it from paying star engineer’s $179M fine to Google [Techcrunch]
Sum and Substance: Uber argued in a recent court filing that former employee Anthony Levandowski committed fraud, an action that frees the company from any obligation to pay his legal bills, including a judgment ordering the star engineer to pay Google $179 million….
Uber’s fraud claim was part of its response to Levandowski’s motion to compel the ride-hailing company into arbitration in the hopes that his former employee will have to shoulder the cost of the $179 million judgment against him.
My Take: Uber wants nothing to do with its disgraced ex-partner. He committed fraud, or so the attorneys say. I guess that’s the question here – did he commit fraud?
Minneapolis rideshare tech startup Vugo will relocate to Florida after VC investment [Tampa Bay Biz Journal]
Sum and Substance: A rideshare marketing company with offices in Minneapolis and San Francisco will relocate to the Sunshine State, after receiving an investment from the state’s most active venture capital fund.
Florida Funders is leading a Series A investment round for Vugo, a Minneapolis-based startup which provides ridesharing advertising and entertainment. The investment is for an undisclosed amount, but Vugo hopes the Series A will raise a minimum of $850,000.
My Take: Big things start small. I don’t know whether this will ever amount to much, but they’re starting out right. Good luck to them.
This Pandemic Exposes the Downsides of Cheap Uber Rides [NY Times]
Sum and Substance: An economic and health crisis is exposing how vulnerable Uber workers really are. Many of us have benefited from the convenience of services like Uber and Instacart. But now in an economic and health crisis, their workers are highly vulnerable, and no one has their backs. Here’s how this happened, and who is to blame. Short version: Blame everyone, including ourselves.
My Take: Good article here. Not a whole lot of new information, but the fact that NY Times looks at these issues is a good thing. Something’s gotta give here.
GM shuts down car-sharing service Maven [TheVerge]
Sum and Substance: General Motors is shutting down Maven, the car-sharing service it launched in 2016, the company tells The Verge. It joins a small but growing list of car-sharing services from automakers and other companies that have struggled or otherwise fully shut down in North America.
My Take: Originally it had the cache of GM and lots of fanfare. But business wasn’t good and when the virus hit – that was it. The virus was the final nail in the coffin.
Readers, what do you think of this week’s roundup?
-John @ RSG
