Uber CEO Pushes for Prop 22 in Massachusetts

Uber’s CEO Dara Khosrowshahi was in the news more than once this week for things he said or did in relation to rideshare drivers in Massachusetts, and when deciding how to handle his corporate employees. Pair that with Lyft’s announcement that they made more money than expected this past quarter and drivers are not feeling any happier about their current gig situation. Senior RSG contributor breaks it all down for us.

Uber CEO calls Massachusetts gig economy ballot measure the ‘right answer’ [Tech Crunch]

Summary: Uber CEO Dara Khosrowshahi expressed his support Wednesday for a ballot initiative in Massachusetts that would keep gig economy workers classified as independent contractors, fulfilling a promise he made nearly a year ago to push for laws that preserve its business model.

“In the state of Massachusetts, we think the right answer is our IC+ model, which is independent contractor with benefits,” Khosrowshahi said during the earnings call with investors. “Our drivers love it. Prop 22 has proven to be incredibly popular with California drivers.”

His comments come a day after a coalition of app-based ride-hailing and on-demand delivery companies, which includes Uber, Doordash, Lyft and Instacart, filed a petition for the ballot initiative that would classify app-based ride-hail and delivery workers as independent contractors and provide them with benefits such as healthcare stipends for drivers who work at least 15 hours per week. The coalition claimed that the provision would allow drivers to earn a minimum of $18 per hour in 2023 before tips. The ballot measure, if it passes legal muster and receives enough signatures, would be included in the November 2022 election….

My Take: I am just going to start this off by saying that I am not a California driver nor am I a Massachusetts driver. I do not know first hand how Prop 22 has been for California drivers.

I have, however, heard from drivers who like it and drivers who don’t. That’s honestly what’s going to happen no matter what in any industry. There’s never going to be 100% agreement on what is good or best for the people involved because everyone has their own opinion.

That being said, Massachusetts is a different beast than California, just like there are no two markets across the U.S. that are the same or function the same.

The biggest similarity between California and Massachusetts seems to be the number of lawsuits that have been filed in each state against Uber. Khosrowshahi bent the public to his will in California to make some of his headaches go away. Obviously, he thinks the same tactics will work again in Massachusetts.

All I can say is, drivers, if you don’t want Prop 22 to come to Massachusetts, speak out now. Tell everyone you know, including your representatives why you don’t want it and what you want to fight for instead. Tell your friends and family not to vote for whatever ballot measure comes along that turns into Prop 22 for Massachusetts.

The general public will not pay enough attention to do what drivers want. They will hear their favorite rideshare app company spouting off all the great things that will come if they vote for their ballot measure. If you want to fight it, start fighting it now.

DoorDash Prepares For Investment In Grocery Delivery App Gorillas [PYMNTS]

Summary: U.S. food delivery group DoorDash is ready to make a new investment in Berlin-based grocery delivery app Gorillas, the Financial Times (FT) reported.

Gorillas’ goal is to make hundreds of millions of dollars in new funding at a valuation of $2.5 billion, according to FT. That amount is far lower than the $6 billion the company initially wanted to raise, and DoorDash has expressed interest in joining the round.

Gorillas was rolled out in New York City in May, FT reported. Since then, it has expanded to over 50 cities and has followed a similar trend as many other adjacent companies which have promoted rapid delivery services, including GoPuff and Getir, which have raised billions of dollars in venture capital. Investors are hoping the online ordering habits that have grown during the pandemic have legs to continue….

My Take: This is interesting to me. It just comes as a little bit of a surprise that DoorDash would consider investing in what would likely become a rival as opposed to buying them out or just continuing to let Gorillas lose money and die out on their own.

However, I’m not even close to being financially literate. If you think they are making a wise choice, let me know in the comments how it makes sense to you!

Lyft revenue grows 125% from last year [CNBC]

Summary: Lyft reported second-quarter earnings on Tuesday, easily beating on both the top and bottom lines. The company also beat Wall Street expectations for active riders.

Lyft stock was up around 1% in after-hours trading.

Here are the key numbers:

  • Loss per share: 5 cents vs 24 cents per share expected in a Refinitiv survey of analysts
  • Revenue: $765 million vs $696.9 million expected by Refinitiv
  • Active riders: 17.14 million vs 15.45 million expected, per StreetAccount
  • Revenue per active rider: $44.63 vs $45.36 expected, per StreetAccount

The company reported its first quarterly adjusted EBITDA profit, posting $23.8 million. That’s a quarter earlier than the company had targeted. EBITDA refers to earnings before interest, taxes, depreciation and amortization….

My Take: As expected, drivers didn’t take this news very well. Why is that, you ask? Perhaps because rate cards have seen a decrease in earnings potential over the past year while passengers complain of higher than average costs per ride. Drivers see this as Lyft taking money from them to pad their bottom line.

Pay the drivers less and charge the riders more. Seems like a logical way for a company to make money, right? Well, drivers who have been around since the beginning (or even just a few years), would disagree with that kind of logic. Especially since drivers are the ones actively providing the services and are the ones dealing with passengers complaining about long wait times, expensive fares, having to wear masks and more.

Basically, drivers feel like they are dealing with more crap but getting paid much less to deal with it. Several drivers who stopped due to the pandemic for various reasons have decided not to come back, which may also account for the shortage of drivers. Both Uber and Lyft claim to have driver incentives to entice people to come back or to join the platform, but neither do much to make it worthwhile to stick around once the rewards and bonuses dry up.

Read up on some driver responses to this article on Reddit.

Uber CEO explains why he’s mandating vaccines for office workers but not drivers [CNBC]

Summary: All of Uber’s U.S. employees will have to be vaccinated against the coronavirus before returning to the office later this year, but the company fell short on requiring an integral part of its business, its drivers, to get vaccinated.

CEO Dara Khosrowshahi explained his thinking Thursday to CNBC.

“When you get to the numbers in the hundreds of millions, which is what we’re talking about as far as riders and drivers go, to put that responsibility, that kind of decision making power, on a company I don’t think is right,” Khosrowshahi said in a “Squawk Box” interview.

Uber hasn’t shared recent figures on how many drivers it has but said Wednesday it facilitated 1.51 billion trips on the platform in its second quarter….

My Take: It seems like more and more companies are requiring their employees to be vaccinated before fully opening back up or allowing people back into the office on a full-time basis.

While Khosrowshahi can say that he wants the government to make the push to vaccinate drivers and passengers, the reality is that drivers are currently labeled as independent contractors, meaning that Uber would not be able to require vaccinations of all of their drivers. Just like they can’t make passengers be vaccinated.

Heck, they can barely enforce everyone wearing masks even though that’s federally mandated for rideshare drivers and passengers.

What do you think of a Prop 22 lookalike coming to Massachusetts? What about mandating vaccinations? Are you for or against companies making that decision for their employees?

-Paula @ RSG