Uber/Lyft Government Connections Questioned

Whenever a business seems to be given preferential treatment by the government, it’s scrutinized, and Uber and Lyft are no exception to this rule. It was announced that Uber and Lyft—with the backing of the government—would be giving free rides to vaccine sites. In the same vein, one editorial article points to the concept of nationalizing Uber and Lyft, which would essentially put the running of these businesses in the hands of the government. Today, senior RSG contributor Paula Gibbins delves into these possibilities and their implications, along with other news from this week.

Biden administration’s deep ties to Uber, Lyft in spotlight after vaccine-assistance partnership announced [ABC]

Summary: Last week, when the White House announced an agreement with Uber and Lyft to offer free rides to vaccine sites as part of President Joe Biden’s aim to inoculate 70% of Americans against the coronavirus by the Fourth of July, the partnership drew praise but also questions.

The administration touted the arrangement as an answer to one of the vaccine effort’s toughest challenges: how to help people with limited transportation options get their shots. But it’s also drawn fresh attention to the role several senior administration officials played prior to serving in the administration in working and advocating for the ridesharing app companies — relationships already under scrutiny as the companies wade through government regulations and manage contentious labor disputes.

Among those who have in the past accepted payments from the Silicon Valley-based firms are Biden’s national security adviser, his deputy chief of staff, and his press secretary — and given these connections, ethics experts say it is an arrangement that warrants scrutiny….

My Take: It seems to be pretty much common knowledge that the government creates and keeps close relationships with several companies and sectors. Is it legal? Is it right? That’s something of a hot topic and open to debate.

In my opinion, it would be ideal for government officials and politicians and anyone involved in running our country to avoid making deals with specific companies and giving preferential treatment to those with the deepest pockets, but it seems like this kind of corruption is so deeply rooted in all avenues of the government that it’s unavoidable.

That doesn’t mean we shouldn’t question it at all available opportunities. In one breath, the Biden administration claims to want workers’ rights to be at the forefront, but then they will partner with companies like Uber and Lyft that do not appear to put workers’ rights into much consideration as part of their everyday business practices.

It’s contradictory and misleading. What voice are we to believe?

U.S. Supreme Court rejects Uber bid to avoid driver pay lawsuit [WHBL]

Summary: The U.S. Supreme Court on Monday turned away Uber’s bid to avoid a lawsuit over whether drivers for the ride-hailing company’s limousine platform UberBLACK are employees and not independent contractors as the company claims.

The justices left in place a lower court’s 2020 ruling that revived the lawsuit filed by Ali Razak, Kenan Sabani and Khaldoun Cherdoud, who worked as drivers for UberBLACK in Pennsylvania.

Razak, Sabani and Cherdoud accused Uber of violating federal minimum wage and overtime pay requirements, arguing that they should be classified as employees due certain benefits and protections denied to contractors.

The Philadelphia-based 3rd U.S. Circuit Court of Appeals threw out a 2018 ruling by a federal judge in Philadelphia that the drivers were independent contractors under the federal Fair Labor Standards Act….

My Take: Meanwhile, we’re still playing the independent contractor versus employee game around every corner. No matter which side of this argument you fall on, I think it can be agreed that it should be decided across the board for the nation. One state’s workers shouldn’t be treated differently than another when it comes to basic labor laws for one company.

We’ve already seen that Uber and Lyft are willing to treat drivers differently because of laws enacted in various states, but shouldn’t we all follow the same rules and laws? We’re either independent contractors or employees under federal law, and shouldn’t that be a guiding point for states to follow?

Here’s what some drivers on Reddit said when they saw this article:

One poster wrote, “Rule of thumb, anytime Uber loses I feel like a winner. If I didn’t have to call Uber every week about earnings “discrepancies” and app glitches, which never seem to be in the drivers favor, maybe I would feel differently….”

Another replied, “I feel like if they were honest and upfront I would also feel differently. There’s no clarity with anything with them.”

A third said, “We all want Uber to treat us like ICs, but because they do not, some of us want to be treated at least as well as employees.”

Some Postmates Delivery Drivers Won’t Be Allowed To Work For Uber Following Its Acquisition [BuzzFeed]

Summary: Some gig workers who rely on Postmates for part or all of their income are missing out on paychecks since Uber acquired the food delivery company in December. At least half a dozen gig workers who spoke to BuzzFeed News are experiencing unexplained delays in the transition to Uber’s platform, and some with traffic violations or criminal histories are being denied approval to drive for the app altogether.

By purchasing Postmates in the $2.65 billion deal, Uber removed a major competitor in the food delivery market and put itself on a clearer path to profitability. It’s part of an ongoing consolidation trend in delivery: Eight years ago, Seamless merged with Grubhub, which last year was bought by Just Eat, a leading European food delivery company, for $7.3 billion. DoorDash acquired Caviar in 2019. And Uber only decided to buy Postmates after it had reportedly failed to buy Grubhub.

But for gig workers, the union of two industry competitors means being increasingly dependent on the terms set by a single company….

My Take: I think that last statement there in the summary is the real kicker. Acquisitions like this aren’t benefiting the workers in any way. It is eliminating competition and therefore eliminating a secondary source of income for workers.

Most rideshare drivers and delivery couriers that I know of work on more than one app. A diversified workfield gives more options for filling in the gaps that one app is experiencing, allowing workers to continue earning more even when one app is underperforming.

The more companies that buy out others, the fewer options there will be. Monopolies are supposed to be illegal. Let’s stop eliminating competition and instead embracing it and using it as a way to better business practices.

Stor.ai and Trax team up to offer on-demand picking workforce [Grocery Dive]

Summary: Stor.ai, a firm that provides end-to-end e-commerce solutions for grocers, now offers retailers access to an on-demand order picking workforce through a new partnership with retail computer vision and analytics provider Trax, the companies announced on Tuesday.

The partnership integrates Trax’s on-demand workforce of more than 1.4 million representatives with Stor.ai’s online platform, which includes its picking app for mapping in-store fulfillment.

In addition to software solutions, Stor.ai is offering the on-the-ground labor force to handle online fulfillment as it challenges Instacart for retailers’ e-commerce dollars….

My Take: Speaking of competition, here’s a company that is trying to give Insatcart a run for its money. Stor.ai is acting as a means to allow grocery stores and other retailers to provide end-to-end customer services without tying their businesses to expensive options like Instacart.

It also seems to be offering ways to scale up and down as needed for demand so there’s not an excess of drivers when the work is slower and to help eliminate long wait times when demand is up. Essentially, Stor.ai is aiming to be a cheaper option for grocery stores vs. Instacart, but it still looks like Stor.ai’s workforce will be made up of independent contractors.

Time will tell if this is a viable competitor – and we’ll see if they offer shoppers bigger sign up incentives to siphon them away from Instacart!

Let’s nationalize Uber [PSU Vanguard]

Summary: Platforms such as Uber and Lyft aren’t profitable. The solution? Nationalize them. They’ve nosed their way into the framework of our society, so why not use them to our true benefit?

In a previous article I wrote critiquing car ownership as infrastructure, I mentioned the unprofitability of Uber and the potential it would have as a nationalized service. I don’t mean to say that nationalizing Uber would fix the transportation structure, but having a reliable, state-run ride-sharing service with benefit to both employee and passenger would lessen dependence on car ownership, decrease pollution and serve as a comfortable transition to a radically different transportation infrastructure.

While some might say that this is an unrealistic idea—that the country would never agree to nationalizing any of its businesses, let alone something as trendy as Uber—nationalization has happened before, and I believe it would be very much in the interest of the country to do so with Uber and Lyft. Most of my attitude toward the United States, foreign and domestic, is one of dissent; however, nationalizing private ride-share companies would be of direct political and economic benefit to both the country and its citizens, and that this argument is ultimately one of defense towards the country….

My Take: It’s a concept likely not going to be considered with any hope for going forward, but it’s worth thinking over, at least. Like the author said, “some might say that this is an unrealistic idea.” It’s just not really in our bones as a country, but who knows? Stranger things have happened.

What do you think of nationalizing Uber? Do you think it’s possible? Would you support it? Share your thoughts below!

-Paula @ RSG