Senior RSG contributor Johnh Ince covers plenty of rideshare news in this week’s roundup, including Uber’s international effects, and how drivers could become employees in the future. Plus, we want to hear from you! Should rideshare drivers be considered essential workers and get the COVID vaccine ahead of others? Share your thoughts in our survey below:
Uber made big promises in Kenya. Drivers say it’s ruined their lives [NBCNews]
Sum and Substance: .”When you have a family to feed, kids to pay school fees for, rents to pay, a loan to pay and your work is too much and exploitative, what happens?” a driver said….
At first, work as an Uber driver seemed to offer Harrison Munala everything he’d hoped for when he moved from a town in the western part of Kenya to its capital, Nairobi…
Work with Uber was so good that, about three years ago, after a year having driven a car he rented privately for 15,000 shillings a week (at the time, about $150), Munala, who is now 34, borrowed money from his sister for the down payment on a Toyota Passo, a compact car. And he took out a loan from Izwe, a pan-African microfinance and loan company.
Now, Munala figured, he could work for Uber and pay off the car. Then he could expand his business, buy another car and hire someone else to drive.
“I felt like I made it in life,” he said…
Four years later, remembering those dreams makes him grimace.
Uber slashed its fares — and Munala’s income. It also introduced new categories of cars, allowing smaller cars. And more people started to take the smaller cars because they were cheaper and more fuel-efficient….
My Take: In our preoccupation with the local news, we forget that Uber has a presence all over the world. This is just one country, but the tales too often are grim. Meanwhile, Travis Kalanick and his band of hucksters are doing pretty darn well.
DoorDash seeks valuation of up to $32 billion in IPO, double what it was in June [CNBC.com]
Sum and Substance: Leading food delivery app DoorDash is looking to raise up to $2.8 billion in its IPO, giving it a valuation of up to $32 billion on a fully diluted basis, the company revealed in a new filing Monday. Its last private valuation was $16 billion as of June….
DoorDash reported $1.9 billion in revenue for the nine months ended Sept. 30. That’s up from $587 million during the same period last year. As its revenue grew, DoorDash also narrowed its net loss to $149 million over the same period in 2020. In 2019, DoorDash had a net loss of $533 million over the nine-month period….
My Take: Doordash only lost $149 million, down from $587 million during the same period last year. This during the pandemic – absolutely ideal conditions for delivery – and an ideal scenario for a public offering. But what happens when the pandemic is over and conditions are no longer ideal? What then?
DoorDash Will Pay $2.5 Million in Tip-Skimming Settlement [Grubstreet]
Sum and Substance: It’s time for DoorDash to settle up. As part of a settlement for a lawsuit alleging that it misled customers in Washington, D.C., and skimmed tips meant for delivery workers, the online delivery platform will pay out $2.5 million. That includes $1.5 million paid out to DoorDash delivery workers, $750,000 to D.C., and another $250,000 to two separate charities. The settlement was announced today by D.C. Attorney General Karl Racine, who in a press release said, “Today’s settlement rights a wrong that deceived D.C. consumers and deprived workers of monies that they should have been paid.”
My Take: Tipping is usually personal – the tip goes for service performed. For the company to step in and skim off a little for itself is a pretty serious offense. So they pay a fine – a rather small one. Meanwhile, DoorDash pays a lot more than $2.5 million to defeat Prop 22 and insure that its drivers are still independent contractors.
How Biden administration could upend Prop. 22 and make Uber, Lyft drivers employees [SFChronicle]
Sum and Substance: Californians voted decisively this month, by more than 58%, to classify drivers for companies like Uber and Lyft as contractors rather than employees after the companies spent a record $200 million on Proposition 22. But the federal government may have the last word on the issue.
Labor officials in the incoming Biden administration could propose rules that would overturn key provisions of Prop. 22, entitling the drivers to minimum wages, worker benefits and union representation. And if Democrats, who already control the House, capture the Senate by winning two Georgia runoff elections in January, they may be able to enact legislation that would strike down the entire ballot measure, and any similar laws in other states.
My Take: It’s a possibility that drivers could be ruled employees at the federal level, but that would nullify Uber/Lyft/Instacart’s $200 million investment in the future. Trying to predict legislative outcomes at this point is a bit premature – before we even know who controls the Senate. Let’s just see how this plays out.
Uber asks U.S. CDC to consider ride-hail drivers essential for Covid vaccine distribution [CNBC]
Sum and Substance: Uber Technologies on Thursday asked the U.S. Centers for Disease Control and Prevention to designate its ride-hail and delivery drivers as non-health essential workers entitled to early Covid-19 vaccine distribution.
The company, in a letter to the CDC’s Advisory Committee on Immunization Practices, said its drivers provided critical transportation for essential workers and allowed others to stay home and order food.
Editor’s Note: Do you think drivers and couriers should be considered essential workers and get the COVID vaccine before other groups? This is a tricky question with a lot of underlying factors, including where you fall in vaccine distribution, whether you want to go back to driving, and if you even are planning to get the vaccine as soon as you can.
Make sure to fill out the survey above – we want to hear from you!
Readers, what do you think of this week’s roundup?
-John @ RSG