Roundup

Hillary Weighs In on Uber, LAX Opens Its Doors & Uber Fined $7.3 Million

By July 17, 2015July 18th, 20154 Comments

Contents:

11 min read

    11 min read

    There was no shortage of big news stories this week and there was a lot of good commentary over on the RSG Facebook page.  It looks like the gig economy just became a political battle with Hillary Clinton weighing in on companies like Uber and Jeb Bush taking rides all over San Francisco.  Today, RSG contributor, John Ince, takes a look at that story, recaps Uber’s first multi-million dollar fine and wonders if LAX opening up to Uber could start a chain reaction.

    Hillary Weighs In on Uber, LAX Opens Up & Uber Fined $7.3 Million

    Hillary Weighs In on Uber, LAX Opens Up & Uber Fined $7.3 Million

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    Hillary Clinton Says On-Demand Economy Raises Hard Questions About Workplace Protections

    Sum and Substance: “This on-demand, or so-called ‘gig economy’, is creating exciting opportunities and unleashing innovation. But it’s also raising hard questions about workplace protections and what a good job will look like in the future” Presidential candidate Hillary Clinton said in a speech today outlining her economic policy.

    You can rewatch the talk on C-Span here. Clinton was referring to companies like Uber that are built on armies of independent contractors. She prefaced the statement noting that the country and Wall Street are thinking too much about short-term financial returns. She said “Meanwhile, many Americans are making extra money renting out a spare room, designing websites, selling products they design themselves at home, or even driving their own car.” While these workers get scheduling flexibility and the freedom to do other jobs, they don’t get benefits and may not have the same long-term career opportunities.

    Some prefer being their own boss, but some want the extra protection of full-time positions. There may be an opportunity for policies that give workers themselves the choice.  Note that Clinton’s remarks stand in stark contrast to what’s happening in the Bush campaign,  Per Business Insider, “In just the last two weeks of June, Bush’s campaign paid Uber almost 70 separate times for a total of roughly $1,400, records show. Bush’s son also wrote on Twitter last month that he had “taken 75 rides in 12 cities over 10 months.” 

    Bush is reportedly set to personally get an Uber ride on Thursday while traveling in San Francisco. That move is likely meant to draw some contrast with former Secretary of State Hillary Clinton, the Democratic presidential front-runner who earlier this week took a jab at what she called the “gig economy.” Read more:  http://www.businessinsider.com/jeb-bush-uber-campaign-spending-report-2015-7#ixzz3g4fBP9wb

    My Take: Hillary’s wading into these waters highlights is a fascinating aspect of the rideshare phenemenon.  A large part of the value created by Lyft and Uber is in the realm of political acceptance.  Part of the genius of the entrepreneurs behind this industry has been their recognition that they must pave the way politically for what they are developing technologically and industrially.  That’s why Uber hired Obama’s former campaign manager, David Plouffe.  You don’t get much more politically connected than that.

    Lyft gets it too.  One of my Lyft pickups awhile back was a young woman who had been attending a reception at Lyft headquarters.  Lyft had agreed to host the reception free for former staffers of the Obama campaign.  Curiously the woman told me that, Lyft required all those attending to sign a NDA (Non Disclosure Agreement) before they entered.

    (Editor: Lyft actually requires all visitors who enter HQ to sign an NDA.)

    I wonder … do they have something they don’t want the rest of us to know?  Does Hillary know something we don’t know when she calls out Uber and Lyft  makes them the target of a populist appeal to fairness for the middle class.  Surely she had her staffers do the homework before this.  Is this a populist issue that her handlers think could resonate beyond the interests of the drivers? After all it was billed as a major address on economic policy.  Stay tuned … the show is just getting started.

    LAX becomes largest U.S. airport to allow Uber, Lyft pickups

    Sum and Substance: Los Angeles officials voted Thursday to allow ride services such as Uber and Lyft to pick up passengers at LAX, the largest U.S. city to grant full airport access to the rapidly growing app-based companies. The move could significantly alter the way thousands of Southern Californians and tourists navigate the nation’s third-busiest airport, long criticized for traffic congestion and lack of a direct connection to the region’s rail system. If the companies can quickly comply with the airport’s rules, Lyft and Uber services — some offering lower fares than taxis — could be available by September, officials said.

    My Take:  This is a major victory for Uber.  Dealing with airports has been a nettlesome issue for them.  If they can do it in LA, that gives them a template for others.

    Uber should be suspended in California and fined $7.3 million, judge says

    Sum and Substance: Uber — plagued by problems with regulators, drivers and taxi unions around the world — took a big blow in its home state Wednesday when an administrative judge recommended that the ride-sharing giant be fined $7.3 million and be suspended from operating in California. In her decision, chief administrative law judge Karen V. Clopton of the California Public Utilities Commission contended that Uber has not complied with state laws designed to ensure that drivers are doling out rides fairly to all passengers, regardless of where they live or who they are. She said Uber’s months-long refusal to provide such data is in violation of the 2013 law that legalized ride-hailing firms. Uber said it would appeal. Whether the fine and suspension are enforced will depend on the appeals process, which could take several months.

    My Take:  This seems like a bigger story than it is.  It would be a big story if Uber were to be suspended from operating in California.  But that won’t happen. The appeals process will drag out and an agreement will be reached.

    Yes, Uber will be out of pocket some cash, but it won’t put a dent in their Uber-mobile.  More troublesome for Uber is how they start collecting data on rides for disabled etc.  I don’t see any easy way to do this unless the disabled register with Uber and it’s collected automatically. Uber will figure something out though.

    The driver who beat Uber is just the beginning — get ready for a flood of copycat cases

    Sum and Substance: Barbara Ann Berwick delivered a potentially huge blow to Uber — and the on-demand economy as a whole — when the former Uber driver was declared an employee, not an independent contractor, by the California Labor Commission in June. As high-profile as Berwick’s case became, she’s not alone. There are at least three other open cases that ride-hailing companies are actively fighting in California, according to records obtained by Business Insider:  

    My Take:  If Barbara Ann Berwick has anything to say about this, it’s going to become a bigger issue.  She’s now teaching a course (for $50) out of her home, that gives potential litigants a primer on how to go to court, what to say and how to win against the big guys.  Rather than shying away from her personal history as a “season litigator” who has brought almost 30 legal cases in San Francisco, she touts it as one of her credentials.  She’s holding out her experience as part of her credibility as someone who knows how to win in court, and how to teach others to win too.  Can Web seminars and YouTube tutorials on the subject be in the offing?  If there’s a buck to be made on it, don’t bet against it.

    Most Millennials Won’t Own A Car In 5 Years, Says Lyft Co-Founder John Zimmer

    Sum and Substance: In five years, most millenials won’t own a car. At least, that’s what John Zimmer seems to think. “You could actually start seeing the majority of millennials in the next five years or so saying there’s no reason I should get a car,” the co-founder of Lyft, the popular ridesharing service, told Mashable recently. “The car used to be the symbol of American freedom. Now it’s like this, and a car is like owning a $9,000 ball and chain, because you have $9,000 in expenses on your car every year.” There’s data to support Zimmer’s hypothesis. Millennials are less likely to get driver’s licenses compared to previous generations; and according to the AAA Foundation for Traffic Safety, the number of cars purchased by people aged 18 to 34 fell by almost 30 percent from 2007 to 2011. Gen Yers also tend to take fewer and shorter car trips, and are more likely to use alternative modes of transportation, such as bicycle or public transit. As Mashable notes, this shift among millennials has played a significant role in the success of ridesharing companies such as Lyft and Uber, worth at least $2 billion and $40 billion respectively.

    My Take:  Beware of people who make predictions five years out that clearly support their business models.  Yes the data points in this direction.  Yes, Zimmer’s logic makes sense.  Yes, his company would directly benefit from this trend.  But no, the San Francisco Bay Area, where Zimmer lives and works is not America.  Most Americans, young and old, still value all the conveniences that car ownership brings – and are willing to pay for it.

    Karygiannis tells Pan Am visitors to ‘beware’ of uberX

    Sum and Substance: One Toronto city councillor says Pan Am Games visitors should steer clear of using services like uberX during their stay in Toronto unless they want to risk a massive fine. Coun. Jim Karygiannis claims that uberX passengers could face a penalty between $300 to $20,000 for using the ride-hailing service. “I want to warn Pan Am Games visitors that they risk being charged and fined up to $20,000 if they use any unlicensed bandit taxis like Uber in Ontario,” Karygiannis said in a written statement released Tuesday. “Two weeks ago a judge ruled that passengers, not Uber, arranges rides with uberX drivers. It is this court ruling which now puts passengers at risk. UberX drivers are unlicensed taxis.” The Ward 39 councillor added that his fellow council members recently voted to ask Toronto police to crack down on enforcing the Highway Traffic Act and all city bylaws.

    My Take:  This situation in Toronto is a reminder that the “Rideshare Wars” are still raging, with battles being fought all over the globe.  Here, it’s the passengers who could bear the brunt of the backlash.  My guess is that this warning will be very effective, in Toronto at least.  It worth noting that this councilman defends the action on the basis of “safety” – which is at the heart of wider concerns about ridesharing.

    What’s It Like Driving For Uber? Mixed Emotions Of Hope And Sadness

    Sum and Substance: “I question the sustainability of Uber’s business model, which keeps cutting fares to the point where all they’ll have are drivers who simply sign up for the free $50 gas card or the up to $300 driver bonus after giving their 20th ride. My hours driven, acceptance rate, and driver rating have all plummeted because the novelty has completely worn off. I’d rather just work a minimum wage job that doesn’t require a tremendous amount of concentration, physical activity and ongoing expenses. Uber should make every single Uber employee sign up to be a driver and give at least 20 rides themselves. This way, they’ll gain first hand experience on how to improve their product and empathize with the growing chorus of ridesharing drivers who are just trying to make ends meet, but can’t.”

    My Take:  This is an excellent account of an Uber driver’s first experiences and later change of heart behind the wheel.  It’s a quick read, informative and entertaining.  He captures the variety of experience and the roller coaster of emotions that most drivers go through.

     The Best Guide To On-Demand Jobs – San Francisco Bay Area Edition

    Sum and Substance: Discover, compare, and make the most out of on-demand job opportunities. At HiveHire, we spent the last year researching and testing on-demand companies to find out how to work smart in order to make the most money. We analyzed 100+ companies and the top ones are included in this report.

    My Take:  This is a thorough, informative and useful resource for those who want to supplement their income through on demand gig.  I had no idea there were so many opportunities beyond Uber, Lyft, Sidecar, Postmates, Instacart etc.  HiveHire has developed a rating system that ranks opportunities by possible income generated from gigs at Shuddle, Homejoy, Shyp, Doordash, Bannerman and many more.  Definitely worth a check out.  You’ll have to opt in, but doesn’t cost anything.

    What do you guys think about the week’s top stories?

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    John Ince

    John Ince

    John Ince is a former Fortune reporter and Wall Street banker. He has about 1,000 rides under his belt driving part time for Uber and Lyft.  He’s writing a book about his experiences entitled:  Travels With Vanessa:  A Rideshare Driver Tries To Make Sense of It all - For a sneak peak visit the link above.