Contents:

8 min read

    8 min read

    In this week’s roundup, senior RSG contributor John Ince covers Uber and Lyft’s ballot proposal for independent contractors, the tenuous relationship between rideshare companies and drivers, and a new Uber program for drivers that might net them a lot more money driving per hour.

    Measure that could exempt Uber, Lyft, DoorDash from AB5 qualifies for November ballot  [SF Chronicle]

    Sum and Substance:  California voters will decide this November whether to exempt app-based drivers and couriers — like those working for Uber, Lyft and DoorDash — from a state law that sought to classify the drivers as employees…

    doordash

    If voters approve the measure, app-based drivers and couriers would be exempt from California’s new gig-work law AB5, which classifies these workers as independent contractors so they would be guaranteed some benefits, such as a form of workers’ compensation and

    My Take:  All right, it’s game on. The strategy of the companies right from the get-go was to win this ballot initiative.  The strategy of the driver interests has been to defeat this ballot initiative.  Ready, set go … Get ready for lots of mud flying through the air.

    Uber, Lyft drivers fear companies will use unemployment benefits against them [CNBC]

    Sum and Substance: Uber and Lyft drivers in California fear the companies may try using their applications for unemployment benefits against them in the fight to be labeled as employees instead of independent contractors…

    Diaz and other drivers fear that gig companies will view an application for PUA benefits as an admission that they are, in fact, independent contractors instead of employees, since workers self-certify that they’re self-employed on a PUA application.

    “People should be reassured,” said Michael Bernick, an attorney at corporate law firm Duane Morris. “I can’t imagine the companies in any state discussions or initiative saying, ‘Look, by filing for PUA you agreed that you were an independent contractor.’ That’s just not realistic.”…

    My Take: It’s a sign of just how deep the mistrust is between driver and company.  Drivers depend on Uber and Lyft for their livelihood, but they don’t feel they can be honest in the application for unemployment benefits. So they don’t apply. It’s a bad situation, but that’s the way it is.

    My Uber driver wasn’t wearing a mask, and then he shared this …  [Salt Lake Tribune]

    Sum and Substance: This is a weird time we’re living in. The other day, after an appointment with my new doctor (one of many), I had to take an Uber ride home. I was wearing a mask, and was being picked up from a clinic. My driver was not wearing a mask. I felt very uncomfortable.

    The ride home was long, partly because of the distance, and partly because of the conversation. We (he) talked about masks, and about how, at the time, Uber wasn’t asking drivers to wear them. Then we (he) talked about how maybe the virus was overblown in the news. Then we (he) talked about how his entire family (wife and five kids) had been sick for the months of February and March. Then he said the thing that is still ringing in my ears.

    “I’m pretty sure I’m an a-systematic carrier.”

    My Take:  Each driver has their own story. This guy’s story would likely scare the Bejesus out of you, but I won’t tell you the story. You have to read the article…

    Uber and Lyft Drivers Sue for New York Unemployment Benefits [NY Times]

    Sum and Substance:  In the latest challenge over their labor status, gig workers say the state is illegally failing to pay them jobless benefits in a timely way.  A group of Uber and Lyft drivers in New York say they have not been able to collect state unemployment benefits in a timely way….

    But despite hundreds of calls to the New York State Department of Labor and two prominent state rulings that deemed gig workers like him to be employees eligible for benefits, he has yet to receive any payment, and time is running short….

    My Take:  This lawsuit is basically trying to free up the bureaucratic logjam.  Whether it will work or not is anybody’s guess, but the issue here is real.  Drivers all over the country are left waiting and some of them can’t afford to wait. Hence, the lawsuit.

    Coronavirus is forcing Uber to return to its startup roots  [Washington Post]

    Sum and Substance:  SAN FRANCISCO — Sabrina Wang, a Washington, D.C. commuter who used to take Uber or Lyft multiple times per week, says she can no longer fathom sharing a ride pool….

    It’s one of the reasons Uber is reportedly considering purchasing restaurant delivery service Grubhub. It has also doubled down on its own restaurant delivery app and has added package deliveries to its roster of services….

    Uber is no stranger to innovation. The company popularized ride sharing a decade ago, growing its business to nearly a hundred million active customers who took more than 10 million trips per day by the end of 2018. …

    My Take:  This article doesn’t explore a lot of new territory, but it’s a good summary of the changes the pandemic has wrought.  The article argues that these changes are bringing the companies back to their startup roots. I’m not sure that’s the case, but it’s still a good article.

    Should Restaurants Fear Uber Eats? [NY Magazine]

    Sum and Substance: On the latest Recode Decode podcast, Kara Swisher spoke with Uber CEO Dara Khosrowshahi about the impact of the coronavirus …

    Kara Swisher: Do you expect pushback if you move forward with something like an acquisition of Grubhub? There’s a mood of opposition around this idea. You had AOC and Elizabeth Warren working on a no-consolidation bill during the crisis. And on this issue, it’s not just from the left but from Republicans — Josh Hawley and others. Are you concerned with their concern?

    Dara Khosrowshahi: I think we always have to be concerned with their concern, because these are important people that you have to listen to, right? We have been a highly regulated and locally regulated business for a long time and will continue to be. Listen, if the concern comes from restaurant partners, making sure that the restaurant business is sustainable and they can grow — if the concern comes from couriers getting paid, that’s a great concern. If it’s from people who want food to be affordable and available to everybody — we are aligned in that direction. And the thing is, no one’s really making money in this business, right? So the business itself has to be sustainable, and it has to be sustainable in a way that works for restaurants, works for couriers, and works for people who are ordering the food and it works for business, as well. So things are going to change. And we’ll definitely listen to the opinions of regulators. …

    My Take:  This article is a Q and A with Khosrowshahi by Kara Swisher.  True to form, Kara Swisher asks tough questions and follows them up too.  Well worth your time.

    Uber is scrapping tens of thousands of Jump bikes during a nationwide bike shortage  [The Verge]

    Sum and Substance:  Uber is sending tens of thousands of its electric Jump bikes to the scrap yard, weeks after offloading the money-losing bike-share division on Lime. The news of the scrapped bikes has incensed bike enthusiasts on social media, one of whom decried the act as “unconscionable.”

    Uber confirmed in a statement that it was “recycling” many of Jump’s older bikes and scooters after transferring “tens of thousands” of the newer models to Lime. But the scrap job comes at a time when many people are avoiding public transportation because of the coronavirus pandemic and looking for alternate forms of transportation. Bike sales (and especially electric bike sales) are booming. And the destruction of tens of thousands of viable bikes and scooters during a crisis is striking many on social media as incredibly wasteful.

    My Take:  This is an unfortunate outcome for the Jump bikes.  One would think that there was a better way for Uber to get rid of the bikes – like giving them away to people who could use the bikes.

    Uber introduces a new hourly rate for longer, multistop trips [The Verge]

    Sum and Substance:  With its ride-hailing business at rock bottom as a result of the COVID-19 pandemic, Uber is introducing a new feature aimed at riders who need to take longer rides with multiple destinations. Using the new “Hourly” function, riders can set the amount of time the trip should take, thereby locking in a flat, hourly rate for the duration of the ride.

    [Editor’s Note]:  This announcement from Uber, that passengers will be able to order hourly Uber rides for various errand-running, is very interesting. Passengers will be charged $50 per hour and will need to specify how long their trip(s) will last. If passengers go over in mileage or time, they will be charged a per-minute or per-mile rates based on the $50 an hour.

    When we asked drivers on our Facebook page what they thought about this news, some were skeptical that it would be worth it for drivers while others expressed cautious optimism – depending on how much drivers are paid from this $50/hour.

    One driver from Phoenix shared his screenshot of the opt-in instructions from Uber (below). Here, Uber states Phoenix drivers will earn $36/hour (out of the $50 passengers are charged) for Hourly rides. Will there be enough demand to make this worth it? If so, then that’s a good deal. If not, it’s just another option.

    uber hourly programWe reached out to Uber for comment on how much drivers nationwide will receive per hour and will update this article if they respond.

    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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