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6 min read

    6 min read

    In the weekend before the big election, there’s plenty of news on Proposition 22 in California, what could happen to Uber and Lyft in California if it does not pass, plus how the coronavirus has impacted drivers and businesses.

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    Uber Fires Drivers Based On ‘Racially Biased’ Star Rating System, Lawsuit Claims  [NPR]

    Sum and Substance:  A former Uber driver in San Diego on Monday sued the ride-hailing company over its “star rating system,” which evaluates drivers based on passengers’ reviews, for punishing people who are not white or who speak with accents, the suit alleges.

    “Uber has long known that relying on a system that depends on passenger evaluation of drivers is discriminatory,” wrote the driver’s lawyer, Shannon Liss-Riordan in the federal lawsuit, which was filed in San Francisco and is seeking class-action status. The suit claims Uber fires drivers if their average ratings drop too low.

    My Take:  When you get low reviews, it does come as a shock. But to translate that into bias on the part of the rating process seems to be a bit of a stretch. More likely it’s bias on the part of the passengers. After all, we’re all biased – somewhat.

    Uber, Lyft Face a No-Sharing Economy [Wall Street Journal]

    Sum and Substance:  Coronavirus drags on ride-hailing firms, as Americans move out of cities and car sales climb again

    Uber CEO Dara Khosrowshahi says the ride-hailing company’s drivers largely back Proposition 22, which would exempt them from being classified as employees, during WSJ Tech Live 2020.

    Ride-hailing companies were counting on Americans becoming less-enamored of that new-car smell. What they didn’t expect was the renewed value of only inhaling your own germs.

    My Take:  While this article is behind a paywall, it’s well worth a read if you can see it or want to become a subscriber. Who would have thought our careening-to-a-sharing-economy would come to a halt with the coronavirus? And will it ever come back?

    Uber, Lyft Legal Blow Widens Door For Labor Law Challenges [Cities Today]

    Sum and Substance: A California appeals court ruling that Uber Technologies Inc. and Lyft, Inc. must treat their drivers as employees not only portends steep increases in operating costs that the companies say they can’t afford, but gives workers legal backup to secure a slew of new labor protections.

    It defined even more strongly that the ride-sharing companies’ futures will hinge on how California voters decide Proposition 22, a ballot measure that would exempt them from the rigid state law on worker classification that the appeals court backed in its ruling. Polls have indicated the vote, on what has become the most expensive voter initiative in state history, is likely to be close.

    My Take:  This ruling from an appeals court might have been important – if not for Prop 22.  The stakes of that ballot initiative are huge, and that’s why the company is spending so much to get it to pass.

    It’s only a few days now.  What do you think will happen?

    Uber, Lyft, DoorDash workers on Prop. 22: ‘I don’t want to end up on the wrong side’  [LATimes]

    Sum and Substance:  A delivery bag is emblazoned with “Yes 22. Save App-Based Jobs & Services.” Below, it says “Ad paid for by DoorDash.”

    DoorDash has shipped millions of bags branded with pro-Proposition 22 messaging to hundreds of California restaurants for workers to deliver — filled with food — to customers. (Courtesy of DoorDash) …

    … Many support the measure. “I’m for Prop. 22 because I am already a full-time employee and [driving] is my second job. I also have six kids and need to pick them up from school and take them to doctors appointments,” one driver said. “I need a flexible schedule.”

    My Take:  This is a good article. It captures the contradictory feelings drivers have about Prop 22.  Is it good for us … or not?  With over $200 million at their disposal, proponents of Prop 22 can craft their messaging, so as to best advance their interests – even if the true effect is the opposite.

    Uber’s ‘robo-firing’ of drivers targeted in latest European lawsuit  [Techcrunch]

    Sum and Substance:  The App Drivers & Couriers Union (ADCU) filed a case, yesterday, with a court in the Netherlands seeking to challenge the ride hailing company’s practice of ‘robo-firing’ — aka the use of automated systems to identify fraudulent activity and terminate drivers based on that analysis.

    Under EU law individuals subject to solely automated decisions have a right to request a human review. Article 22 of the General Data Protection Regulation (GDPR)  gives data subjects the right not to be subject to a solely automated decision where there’s a significant legal or similar effect.

    The ADCU case contends that Uber drivers in the UK and Portugal have been “wrongly accused of ‘fraudulent activity‘ as detected by Uber systems before being fired without right of appeal”.

    My Take:  Interesting arguments here. When a driver is fired, one expects some kind of substantive explanation, but none seems to be coming from the company. This lawsuit says the culprit here is automation – which is against the law.

    Uber counters that human intervention is used.  I guess we’ll find out through this lawsuit.  The fact that the lawsuit is filed is an indication of the breakdown of trust between driver and company.

    What next for Uber? Inside the fight for its future [FinancialTimes]

    Sum and Substance: Khosrowshahi, 51, has been in charge of Uber since 2017. He took over when the company was falling apart thanks to a poisonous culture left behind by its co-founder, Travis Kalanick. Kalanick was the kind of man Silicon Valley used to worship — a disrupter. When building Uber, he’d run roughshod over regulations and competitors. He was changing the world. Everyone else was just too slow to keep up….

    If Prop 22 fails, the writing is on the wall: Uber and Lyft will have to reclassify drivers. This is impossible, they say, without raising prices and greatly reducing the number of drivers on the platform, particularly those who do relatively few hours per week.

    My Take:  This is a long and very informative article – as only the Financial Times can do.  Lots of interesting biographical info, but when it gets to what’s going to happen – it gets kind of murky.  That’s probably because nobody really knows what’s going to happen, with this Prop 22 hanging overhead.

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

    -John @ RSG

    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.