In this week’s roundup, senior RSG contributor John Ince covers a new NYC app aiming to give drivers a greater share of earnings, plus DoorDash IPO news and the future of gig workers’ rights in the US.
New App Aims To Compete With Uber, Lyft While Giving New York Drivers A Living Wage [NPR]
Sum and Substance: NPR’s Scott Simon talks with Ken Lewis of The Drivers Cooperative about its new driver-owned ride-hailing app, which is aimed at competing with Uber and Lyft in New York City starting next year….
SIMON: I think all of us who’ve been in an Uber or Lyft have heard the drivers complain about the fees the companies collect. How would yours be different, if it would be?
LEWIS: Yes. This is one of the main benefits, I think, that people will see immediately. One, our trips are going to be slightly under Uber and Lyft charges for riders. And we will actually be able to pay drivers still more than they actually get at this moment from Uber and Lyft. They take, like, 25 and 30% from drivers. We will be taking 15%. But more than that – the really important is that while Lyft make their money for Wall Street investors and Silicon Valley investors, we will be a co-operative. So any profits will go back to the drivers….
My Take: I have no idea whether this app has any chance of succeeding, but I support it in principle. Too much of the money goes into the pockets of investors – and not enough into the pockets of the drivers – the ones who are really doing the work.
Why Uber Technologies Stock Jumped 49% in November [TheMotleyFool]
Sum and Substance: Uber Technologies (NYSE:UBER) shareholders trounced a surging market in November as their stock rose 49% compared to the 11% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.
The rally put the ridesharing platform at a record high, up roughly 80% so far in 2020….
Investors got a look at some weak operating results from the company in early November. Ride demand is still trending lower as the pandemic reduces mobility demands across the country. That slump resulted in an 18% sales decline through late September.
On the bright side, Uber made progress extending into new growth lines like grocery and prescription deliveries while slashing its costs. That cost profile was also dramatically improved as California voters passed a ballot proposition that shielded ridesharing companies from many employment expenses.
My Take: I just don’t get the movement of the stock market in these times. Yes, celebrate the passing of Prop 22. But even before AB5, Uber was losing a billion a quarter. Basically, the pandemic just gave Uber a year or so to use the same lines and make the same promises all over again.
Head of Miami law firm sells mansion with basketball court, movie room to former Uber executive (Photos) [BusinessJournal]
Sum and Substance: Attorney Wayne M. Pathman, the co-founder and co-managing partner of law firm Pathman Lewis LLP, and wife Leslie B. Pathman, sold their Miami Beach mansion for $13 million.
Emil Michael, a former executive with Uber, and Julie Michael, purchased the 9,032-square-foot home at 1511 W. 27th St. The price equated to $1,439 per square foot…
Emil Michael was previously chief business officer of Uber and chief operating officer of Klout.
My Take: Emil Michael? You hardly recognize the name, but he still made enough at Uber to buy this palace. Meanwhile, what about the countless drivers who barely make enough to make due. What’s wrong with this picture?
Wendy’s introduces ‘Never Stop Gaming’ Uber Eats menu with Twitch streamers and prizes including game consoles [USAToday]
Sum and Substance: Want to eat like a popular Twitch streamer? Or, perhaps, you’re hungry to win a new gaming console.
Wendy’s and Uber Eats are teaming up to release the “Never Stop Gaming” menu and a contest where consoles and other prizes are up for grabs Tuesday through Dec. 12…
According to rules, there are 6,000 prizes with a combined value of $343,045.75. There are 25 “Next Generation” game consoles listed as the grand prize with a value of $499 each.
My Take: Well, this is pretty exciting huh? I suppose if you’re a gamer, it is. Clearly, there are a lot of gamers out there. Why else would Uber invest these marketing dollars in this? For USA Today to run a story on it, this kind of thing must work.
DoorDash is the ‘most ridiculous IPO of 2020’ and holds no value beyond bailing out private investors, says veteran equities analyst [BusinessInsider]
Sum and Substance: DoorDash is set to IPO on Tuesday but one stock analyst is cautioning investors against buying into the food delivery startup.
“We think this proposed public equity offering holds no value, $0, beyond bailing out private investors before unsuspecting public investors realize the business is not viable in its current form,” said David Trainer, New Constructs founder and CEO in an email.
My Take: I have to agree with this analyst. What happens after the pandemic? The company is losing money during the best possible period for the company, when restaurants are closed except for delivery.
Uber, After Years of Trying, Is Handing Off Its Self-Driving Car Project [NYTimes]
Sum and Substance: Company executives once said having cars that can drive on their own would be a salvation for their business. But the effort turned into a legal and financial headache….
Uber, which spent hundreds of millions of dollars on a self-driving car project that executives once believed was a key to becoming profitable, is handing the autonomous vehicle effort over to a Silicon Valley start-up, the companies said on Monday.
Uber will also invest $400 million in the start-up, called Aurora, so it is essentially paying the company to take over the autonomous car operation, which had become a financial and legal headache. Uber is likely to license whatever technology Aurora manages to create.
My Take: This is an acknowledgment of sorts that self-driving cars just won’t be what its proponents once hailed as the key to profitability. Just take the drivers out of the car and you’ve got a gold mine – or so the fantasy went. Now, Uber acknowledges that this road is long and narrow – and may never lead to what the company once held out as nirvana.
Was Uber and Lyft’s Big Prop 22 Victory the Start of a Labor Backlash? [CoMotion News]
Sum and Substance: Big tech sees the successful and expensive ballot initiative as a huge win, but it may be the opening skirmish in a larger fight over gig worker rights
Editor’s Note: This is an informative article that goes beyond the ‘Yes on 22’ victory analysis to talk about what’s to come for gig worker rights, labor, unions and more. Will we actually see an organized, cohesive group battle big gig companies at the federal level? We’re not so sure.
Readers, what do you think of this week’s roundup?
-John @ RSG