It was an interesting week for rideshare news, which included Uber’s new plan to get around AB5, issues with Uber’s ‘fuzzy math’ – plus a high-speed chase by a driver who just wanted to exchange insurance information after an accident. Senior RSG contributor John Ince breaks down all the latest news below.
Uber Loses Early Challenge to California Gig-Worker Law [Yahoo Finance]
Sum and Substance: (Bloomberg) — Uber Technologies Inc. failed to persuade a judge to shield its drivers from California’s gig-worker protection law while the company challenges the landmark measure in court.A federal judge in Los Angles rejected a request by Uber and Postmates Inc. to temporarily block enforcement of Assembly Bill 5, which aims to convert gig-economy workers from independent contractors to employees with benefits. Uber and Postmates didn’t ask the judge to shield other companies from the law.
U.S. District Judge Dolly M. Gee had signaled during a Feb. 7 hearing that she would deny the preliminary injunction sought by Uber and Postmates.
Gee concluded in an order posted Monday that the public interest weighs “in favor of permitting the state to enforce this legislation,” while acknowledging the companies’ claim that it poses “irreparable harm” for them. ….
My Take: Well, that didn’t work. So let’s try the ballot – stay tuned for Uber, Lyft et al.’s big push with the populace as they try to get more ballot signatures.
Pets can now hitch an Uber ride in Chicago [Chicago SunTimes]
Sum and Substance: Uber customers in Chicago can take their pets along for rides starting Tuesday. Just know that the service will cost an extra $6. The pet surcharge will be an option riders can select along with others on the Uber app. The company said a “significant portion” of the surcharge will go to the drivers. The ride-hailing firm said drivers can decline to accept customers with pets. It noted, however, that all drivers must accept service animals. Customers with service animals don’t have to pay any surcharge. The Uber Pet option already is available in Austin, Denver, Nashville, Minneapolis-St. Paul, Philadelphia, Phoenix and Tampa Bay. Competitor Lyft has no pet surcharge but lets drivers decide if they want to take a non-service animal in their vehicle.
My Take: This a logical, sensible option. $6 is a reasonable amount to pay for the pleasure of having a non-service pet come along with you. How many passengers will take Uber up on this offer remains to be seen, but it’s there.
For more information on Uber Pet, check out our updated Uber Pet information here.
Lyft beats revenue estimates but stock falls [CNBC]
Sum and Substance: KEY POINTS
Lyft reported earnings for its fourth quarter of 2019 Tuesday that beat analyst estimates on revenue and active riders.
The company also reported a lower than expected adjusted EBITDA loss.
Investors have renewed attention for Lyft after Uber smashed expectations on its profitability timeline. …
Lyft reported earnings for its fourth quarter of 2019 Tuesday that beat analyst estimates on revenue and active riders. The company also reported a lower than expected loss per share. The stock fell as much as 5% after hours, likely because the company did not give an update on its profitability timeline as Uber did during its earnings report last week.
Here are the key numbers Wall Street expects:
Loss per share: $1.19 vs. $1.39 expected, according to Refinitiv
Adjusted EBITDA loss: $130.7 million reported, vs. $164 million estimated, according to Refinitiv consensus estimate
Revenue: $1.02 billion reported vs. $984 million expected, according to Refinitiv consensus estimate
Active riders: 22.9 million vs. 22.8 million estimated, according to StreetAccount
Revenue per active rider: $44.40 vs. $43.19 estimated, according to StreetAccount
Contribution margin: 54% vs, 52% estimated, according to StreetAccount
My Take: You can’t win. You beat estimates, but your stock goes down. Then there’s the date they say they’ll be profitable – or at least when they can make the numbers look like a profit.
Couple Livestreams ‘Nightmare’ Uber Ride: ‘Scariest Moment Of My Life’ [CBS Fort Worth]
Sum and Substance: RICHMOND, Va. (CBS Local) — A Virginia couple livestreamed their harrowing Uber ride on Facebook as their driver sped through the streets of Richmond in a harrowing car chase.
John Murray and Tameka Swann said they were picked up from their home just before 8 p.m. Monday for a night out on the town. Shortly after pulling away, they said someone rear-ended the vehicle.
“Our Uber attempted to pull over so that they exchange information, but the car didn’t stop behind us. They went around us and sped off and that’s when our Uber sped off behind him,” Swann told CBS affiliate WTVR.
Murray began to stream their trip on Facebook Live from the backseat.
“Nobody would’ve known that would’ve happened if I didn’t get that on camera,” he explained. …
At one point, an SUV crashed into the side of their car. But the Uber driver continued to speed away, narrowly missing a bicyclist. …
“That was the scariest moment of my life,” Swann said. “I have never been that scared in my life.” The couple suffered minor bruises and were checked out at the hospital.
My Take: I don’t often select articles like this, but it’s a slow week and this story is pretty unique. The driver has now been charged with kidnapping. What would you have done if you were rear ended and the guy didn’t stop?
Uber is testing out a new 1-800 number for people who don’t use apps [The Verge]
Sum and Substance: A vast majority of Americans — 96 percent, according to Pew Research — own a cell phone, but only 81 percent own a smartphone. For that minority, or for those who find a smartphone difficult to navigate, Uber is testing out a new way to hail a car: a 1-800 number.
This experiment may be new for Uber, but it’s probably pretty familiar to anyone who remembers calling a car service in the pre-Uber days. The number is only available to people who live in Arizona for now. Uber says that Arizonans without access to the app can call 1-833-USE-UBER to request a ride from a live team member. That customer service rep will provide an upfront price using the same pricing algorithm that powers the app. …
My Take: Imagine that – an 800 number. Uber has finally gotten around to it. Amazing what can happen when you set your mind to it.
Why do you think they chose Arizona as a testing ground? This is somewhat similar to the kiosks Uber rolled out last year…
Warren Buffett’s right-hand man trashes the metric Uber is using for its ambitious plan to be profitable by the end of 2020 [Business Insider]
Sum and Substance: Charlie Munger, Warren Buffett’s business partner at Berkshire Hathaway, said that using adjusted EBITDA, a non-standard accounting practice, to measure profitability is inaccurate and “ridiculous.”
“I don’t like when investment bankers talk about EBITDA, which I call bulls— earnings,” Munger said, according to a CNBC report.
Uber said earlier this month that it expects to be profitable by the end of 2020, using adjusted EBITDA as a metric for that prediction.
My Take: There you have it. This comes from the Oracle himself – or at least his right hand man. That a company as large as Uber can use adjusted EBITDA speaks volumes about the current state of accounting.
Readers, what do you think of this week’s round up?
-John @ RSG
