In this week’s roundup, senior RSG contributor John Ince covers the Postmates layoffs, Lyft’s ‘poverty mode’, Uber and Lyft’s record spending in DC and more.
Uber lays off 15% of Postmates’ workforce just 3 months after buying the food delivery app. Postmates founder Bastian Lehmann is reportedly among those let go. (BusinessInsider)
Sum and Substance: Uber laid off around 185 Postmates staff on Thursday, sources told The New York Times. This included Bastian Lehmann, the founder and CEO of the food delivery app, the sources said. Uber bought the app in 2020, and the layoffs feed into Uber’s plan to better integrate Postmates and Uber Eats, the sources said….
My Take: Uber still seems to be in cost cutting mode. Either that or there wasn’t quite a fit for the Postmates folks in the Uber Culture. Either way they’re gone … and there could be many more following them out the door.
Lyft test program offers drivers more rides in exchange for 10% pay cut (CNET)
Sum and Substance: Lyft calls its feature “priority mode.” Drivers call it “poverty mode.”
In late September, Earla Phillips got what she described as an irritating email from Lyft. The ride-hailing company was reaching out to drivers, like her, to notify them about a new feature called “priority mode.”
“Turn on priority mode to earn more,” the email boasted. When drivers opted in, it said they’d get a handful of “priority” hours per week in which they’d get more rides than drivers who weren’t using the feature.
But there’s a catch. In priority mode, drivers must agree to a 10% pay cut. … “I knew that this just was another way for the company to take more money from the drivers,” said Phillips, who was one of Lyft’s earliest drivers in Toronto. “The first week I didn’t even bother turning it on.”
My Take: This is a reflection of the shifting power relationship between drivers and the company. Years ago, when companies needed drivers, the company couldn’t have gotten away with this. But since business is way down in the pandemic, Uber and Lyft probably have more drivers than they really need. So Lyft basically has another pay cut – this one a 10% pay cut.
Read more about Lyft priority mode and what drivers are saying about it here.
Uber and Lyft set records in annual spending on Washington lobbying (Marketwatch)
Sum and Substance: Uber Technologies Inc. and Lyft Inc. spent record amounts on Washington lobbying in 2020, a year in which the ride-hailing companies had the attention of the U.S. Labor Department. …
The spending came as the Labor Department worked toward finalizing a rule viewed as a boon to app-based gig companies — and as California voters handed such companies a win in November’s elections by backing a proposition that exempts their drivers from the state’s labor laws. …
My Take: This should not come as a surprise. Uber and Lyft are political animals. Their business depends on the favorable outcome of any number of public policy positions. So yes, their political spending is very large and targeted.
How does DoorDash work? Everything to know about the food delivery app powered by gig workers (BusinessInsider)
Sum and Substance: DoorDash is an on-demand food delivery service that partners with local restaurants to deliver food to homes and businesses. However, due to the way that DoorDash orders are delivered, the app makes it easier for restaurants to get into the delivery business.
DoorDash operates in hundreds of cities, offering hyperlocal food delivery across the US. The company works with restaurants, letter(sic) them set menu prices, but controlling delivery and service fees themselves. … The biggest difference between DoorDash and other apps is that orders placed through DoorDash don’t make restaurants use their own delivery drivers. Instead, DoorDash has its own fleet of freelance delivery workers — they’re called Dashers — who are paid through tips, a base salary from DoorDash, and by completing “challenges.”
My Take: This is a basic primer for anybody who knows very little about DoorDash. It’s a company worth knowing about. DoorDash recently had one of the largest IPOs and the demand for the stock was so great that the stock shot upwards of 75% on the first day. It’s been down some since, but still very much holding its own. What happens after the pandemic? Well. we’ll face that when it comes…
Readers, what do you think of this week’s roundup?
-John @ RSG