It’s been mostly Uber making the news this week between reaching an agreement on sharing sexual assault data and calling for their rivals to follow the same ruling they did overseas. We also take a gander at what Uber’s rivals are up to in this week’s roundup with senior RSG contributor Paula Gibbins.
Driver-Owned Uber Alternative Looks to Crowdfund $1 Million (Bloomberg)
Summary: A worker-owned cooperative that competes with Uber in New York is hoping to turn grassroots buzz into business growth by raising more than $1 million from investors, drivers and potential passengers.
While most startups trade equity for venture capital funding, The Drivers Cooperative is issuing debt to lenders who would get a limited share of future revenue while keeping company ownership in the hands of its drivers.
Gig economy giants like Uber Technologies Inc. and Lyft Inc, have faced accusations of poor labor conditions, where workers are burdened by the costs of vehicle maintenance, loans and insurance. At the same time, the pandemic has led to a driver shortage, sparking soaring trip prices for riders. The Drivers Cooperative hopes to charge less while paying drivers more, an equation that would be made possible by low overhead.
Fundraising will allow the cooperative to scale and improve its business fundamentals, said Stephen Sleigh, a private equity professional who is helping the cooperative solicit participation. “This is not charity or a philanthropic donation, this is an investment,” he said….
My Take: Historically, smaller scale operations don’t get enough traction to fully compete with Uber, or if they do, it stays local. Some drivers on the Uber Drivers subreddit say that paying drivers more and charging customers less is impossible, basing their information on how Uber and Lyft have been handling things.
However, one commenter stated, “…If you took 25% of what Uber takes, use it to pay the driver more, and then take away another 25%, the ride is cheaper, the driver makes more, and the company still makes money. Maybe they don’t have the massive amount of overhead that Uber has to cover…”
Another pointed out that “If the company isn’t trying to invest billions into self driving cars and other stupid shit it’s perfectly viable. Their actual running costs aren’t all that high compared to many other businesses.”
It could be that people just haven’t tried the right model yet, or had enough funding to take off the way they need in order to enact real change in the rideshare industry.
Learn more about the Drivers Cooperative by checking out Harry’s podcast interview with Alissa Orlando and David Alexis of The Drivers Cooperative in NYC.
Uber reaches agreement in California sexual assault data request (KFGO)
Summary: Uber Technologies Inc on Thursday reached a preliminary agreement with a California regulator for sharing data on sexual assault and harassment claims on its platform while protecting victims’ privacy and avoiding a $59 million fine.
Under the proposal outlined in a regulatory filing with the California Public Utilities Commission (CPUC), the penalty would be reduced to $150,000, but Uber would pay $9 million to support a state victims’ fund and help create industry-wide safety and reporting standards.
“We’ve been able to find a path forward that preserves the privacy and agency of sexual assault survivors,” Tony West, Uber’s chief legal officer, said in a statement.
The CPUC fined Uber in December after the company refused to share victims’ detailed information, including full names and contact information, arguing that doing so would violate their right to privacy.
The dispute stems from a safety report Uber released in December 2019, disclosing 6,000 reports of sexual assault related to 2.3 billion trips in the United States in 2017 and 2018….
My Take: This is a difficult topic. I actually agree with Uber that sharing the victim’s information would violate their right to privacy, and I don’t fully understand the need to share the victim’s information. But then again, I’m not a policymaker and I don’t enforce anything like that either.
However, I do believe there needs to be transparency in how many sexual assault cases are happening and real solutions need to be found to help prevent it. I realize it is impossible to 100% do away with sexual assault, but there’s always more companies like Uber can do to ensure the safety of their drivers and passengers alike.
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Uber Calls For UK Rivals To Follow Court Ruling On Driver Status (Forbes)
Summary: Uber’s boss for Northern Europe has said that other ride-hailing companies in the UK need to recognize their drivers as workers.
Jamie Heywood, general manager for the region that includes the UK, said in an interview that Uber’s ride-hailing and private car hire operators in the UK, its biggest non-US market, should be required to move their drivers to ‘worker’ status like it did.
In a UK Supreme Court ruling against the company, Uber was forced to categorize all its drivers in the country as workers, providing a minimum wage and benefits like holiday pay and pension contributions….
My Take: Ok, I admit when I first saw this I LOL’d a bit. Uber isn’t exactly known for following the rules and now they are the ones advocating for others to follow the rules. However, once again, they actually do have a point.
If Uber had to change the status of drivers, their rivals should be made to do the same. While Uber may be the biggest target, it doesn’t mean others should get away with not following the rules.
Uber Freight expands to serve customers with smaller shipments (ZDNet)
Summary: Uber Freight on Wednesday announced it’s expanding into the less-than-truckload (LTL) market — a segment of the trucking industry that serves businesses with relatively small loads of goods to ship across the country.
Uber’s new LTL service is tightly integrated into the Uber Freight platform. It’s backed up by Uber’s new partnership with BlueGrace Logistics, a third-party logistics provider that already has a significant scale in the LTL space.
The new service brings Uber Freight closer to its vision of moving goods of any size, all the way from a port to the end-user….
My Take: It’s just another shift to make Uber the one-stop-shop they want to be in all areas of delivery and rideshare. There’s already opportunities for individuals to send packages via Uber drivers and, of course, they already had the larger freight options. This is just going to be a happy middle ground for smaller businesses to partake in Uber’s services.
Instacart Wants to Be an Influencer in Food Delivery (WSJ)
Summary: Your food-delivery apps could soon look a lot like your social-media feeds. You can thank Instacart for that.
The online grocery giant announced last week that Fidji Simo, the former head of Facebook ’s legacy Blue app, will succeed Instacart’s founder Apoorva Mehta as its new chief executive officer, effective next month. She will likely bring changes to Instacart that could have lasting influence across the food-delivery industry.
Instacart and restaurant-delivery platforms might seem like similar businesses on the surface, using gig-economy workers to deliver food to consumers. But there are key differences worth noting. While Instacart says the majority of its shoppers are independent contractors, the company also employs full-service shoppers in some stores on a part-time basis. In part because of their larger average basket sizes, groceries as a core business relative to restaurant food also make for very different unit economics. Instacart last year said it did $1.5 billion of revenue but handled “tens of billions” of dollars in gross transaction value. While not a perfect comparison, DoorDash generated almost twice the revenue last year, handling roughly $25 billion in gross order value for its largest business….
My Take: Ending on a non-Uber note, I’m not sure how I feel about Instacart wanting to be an Influencer in food delivery, but it’s all about revenue, isn’t it? Targeted advertising and influencing will increase their bottom line and that’s the goal of every business out there that wants to succeed. With competitors growing their presence, it’s only natural that Instacart would find new tactics to stay afloat and keep their share of the pie.
What do you think of Instacart being an influencer? Will they be able to stay at the top with competitors like Cornershop spreading into more markets?
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-Paula @ RSG