5 min read

    5 min read

    California Assembly Bill 5 is in full effect – or is it? Uber, Postmates and other gig economy companies have filed a lawsuit challenging the law, and overall it seems like the law’s implementation is not being explained or rolled out well. Senior RSG contributor John Ince covers AB5 news and more below.


    Uber, Postmates lawsuit against California gig-workers law is ‘very weak,’ congressman says [CNBC]

    Sum and Substance: A lawsuit filed by Uber, Postmates and other parties against a forthcoming California law regulating gig-economy work makes a feeble case, U.S. Rep. Ro Khanna told CNBC on Tuesday.

    “I think their argument is very weak,” Khanna, the Democratic representative of California’s 17th Congressional District, said in a “Power Lunch” interview. His district includes parts of the San Francisco Bay Area, where Uber, Postmates and other Silicon Valley technology firms are based.

    On Monday, Uber and Postmates joined two contractors working for the transport apps in filing a suit alleging that the state of California’s Assembly Bill 5 is unconstitutional. The law, signed by Democratic Gov. Gavin Newsom in September and set to go into effect Wednesday, will force the companies to reclassify gig workers as employees instead of contractors.

    “The dispute is that the rewards of the technology revolution has gone to a very few,” Khanna said, adding that state lawmakers want to “distribute [the profits]. Let’s make sure that everyone working in this new economy is benefiting, not just the very top.”

    My Take:  I don’t know whether the legal case here is strong, but the fact that Uber filed the case speaks volumes.  It says that they don’t want this law and it gives them time, or at least an excuse of time.

    California Wanted to Protect Uber Drivers. Now It May Hurt Freelancers.  [NY Times]

    Sum and Substance: A state law meant to protect workers at companies like Uber and Lyft takes effect on Wednesday. Some say it will limit their prospects.

    Gloria Rivera, a freelance translator and interpreter, said of the state’s new law, “Who’s going to hire me as an employee for three assignments a month?”  Gloria Rivera likes the freedom of freelance.

    She moved to San Diego from Peru in 2005 and has a bustling career as an interpreter and translator for doctors, courts and conferences.

    Now, as a new California law governing freelancers is set to take effect on Wednesday, her clients are wary. They are asking for more paperwork. Some services are hitting pause on hiring Californians at all. “Everyone’s scared in California,” Ms. Rivera, 42, said. “Who’s going to hire me as an employee for three assignments a month?”

    The new law, Assembly Bill 5, will radically reshape freelance work in California. Prompted in part by frustration with the treatment of workers by companies like the ride-hailing behemoths Uber and Lyft, the bill was created to extend workplace legal protections to roughly one million people in the state.

    My Take:  Oh the unintended consequences! As the law takes effect, freelancers everywhere are taking a look at the nature of their business and so are their potential employers.  Who knows how this is going to play out, but there are a lot of changes coming.

    Related article: Ab5 Uber – Everything You Need To Know

    How gender impacts Uber tipping  [Quartz]

    Sum and Substance: In 2017, Uber began letting riders tip riders in its app. For the vast majority of trips, riders decline the option. According to a research analysis (paywall) of 40 million trips in 2017, only 16% of trips are tipped and 60% of riders never tip.

    Yet there are certain features of a trip that make a tip more likely. A higher rated driver, a longer trip, a richer rider, and a repeat customer all sizably increase the likelihood and size of the gratuity.

    It also helps if the driver is a young woman, and the rider is a man… Women drivers over 65 get 2% more, on average, than male drivers over 65, women between ages 21and 25 receive over 6% more than men of the same age. Female riders also give women more money, but the difference isn’t as drastic (women are generally less likely to tip).

    My Take:  Are you surprised by these results? I haven’t say I’ve put them into action, not being a young woman, but I wouldn’t be surprised if young female drivers received more in tips overall than men. However, there aren’t that many female drivers to begin with!

    Egypt competition watchdog approves Uber acquisition of Careem with conditions  [Reuters]

    Sum and Substance:  CAIRO (Reuters) – Egyptian regulators have approved Uber’s $3.1 billion acquisition of regional rival Careem after agreeing to a set of commitments proposed by the U.S.-based ride-hailing service meant to reduce harm to competitors…

    Careem will become a wholly owned subsidiary of Uber but will continue to operate as an independent brand with independent management.

    My Take:  Looks like this deal is a go. It fulfills Uber CEO Dara Khosrowshahi’s pledge to compete aggressively where they can be first or second in market share.

    Atlanta Uber driver graduates after passenger pays off college debt [ABC News]

    Sum and Substance:  ATLANTA — An Atlanta Uber driver achieved her dream of graduating from college after one of her passengers paid off her student debt.

    On the day of the serendipitous rideshare pickup, LaTonya Young was working as a hairstylist “by day” and an Uber driver “by night.”  The 43-year old single mom was driving a stranger to Mercedes-Benz Stadium for an Atlanta United game when she started sharing her life story…

    “The message stated, ‘You can register for classes now.’ I was literally blown away. A stranger has never done that, or done anything like that, for me,” she said.

    That stranger, the Uber passager, was Kevin Esch. Young said his act of kindness inspired her to maintain her grades. A few weeks ago, she earned her associate’s degree in criminal justice, and Esch attended the graduation. This month, she’ll be back in class to pursue a bachelor’s.

    My Take:  It’s a nice story.  Things like this happen and we can be glad that they do.

    Readers, what do you think of this week’s roundup?

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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.

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