We here at RSG wish you a happy holiday season! We’re still on vacation until January 2, but the news never sleeps. Senior RSG contributor John Ince shares the most interesting rideshare news stories of this week, including a recent lawsuit settlement and a heartwarming holiday story.
Uber reaches tentative settlement with drivers arbitrating over employment status and expense reimbursement [Techcrunch]
Sum and Substance: Uber is reportedly on track to go public in the first quarter next year, and in the lead up to that, it’s sewing up some loose ends. TechCrunch has learned that Uber has offered a tentative settlement to pay out 11 cents for every mile driven for Uber (including adjacent services like Uber Eats) to drivers who have been in individual arbitration with the company over their employment classification. Drivers were pursuing individual arbitration after an appeals court ruled in September that they could not combine their cases into a class action lawsuit….
Uber’s settlement of 11 cents per mile for all on-trip miles that were driven for Uber bypasses addressing those specific details. Notably, drivers who accept the settlement sign documents to release all claims against Uber related to employee misclassification.
The settlement is tentative depending on a sufficient number of drivers signing the agreement (we do not know what the minimum would be — so if you’re a relevant driver, you should check your mailboxes and respond if you want compensation), among other factors, and it could take up to six months for payments to get to drivers.
Securing rights for the growing number of contract workers in the labor market has been one of the more controversial aspects of the boom in “gig-economy” businesses. It will be interesting to see how and if more of these kinds of cases come to light, and if regulators start to wade in, in cases where employers have not.
My Take: Okay, Uber is wrapping up the company like a Christmas present for its upcoming IPO, and this settlement just might be the bow. This lawsuit, which we’ve covered before, has been a cloud hanging over the future of Uber, especially since Lyft settled essentially the same lawsuit recently and is free and clear.
But wait, not so fast. When you settle a lawsuit like this, you really haven’t settled anything, at least in a legal sense. All you’ve done is put this particular lawsuit to rest. But other lawsuits over the same issue can and will be filed and eventually the courts are going to have to render a judgement.
Already the rulings of various administrative bodies, both here in the United States and abroad, have cast doubt over Uber/Lyft’s stances that drivers are independent contractors and not employees. All this settlement will do is buy Uber a little bit more time – perhaps giving them a window in which the illusion can be continued just long enough for investors to buy into the company line of reasoning – however unreasonable that may be.
Portland Uber driver down on luck gets secret $100 cash tip [KGW.com]
Sum and Substance: It’s been a bad year for Uber driver Teresa Staley, with a job loss and medical issues. She feared a ‘shabby Christmas’ for her 4-year-old until a couple gave her an unexpected tip…
She picked up a fare, a couple in their 50s. They were headed to the Low Brow Lounge. Didn’t say much, Staley said, just a “hi, how are you.” It was quick trip. She pulled up and said goodbye to the couple.
“And when the gentleman got out of the car he tapped on the window and hands me a cash tip,” Staley said. “I just put it in my pocket and said thank you and have a good night.” The magic emerged later when she pulled the cash out of her pocket. A $100 tip on a $4 fare.
“It was really shocking to me and I actually started to cry.”
My Take: This just goes to show that you never know with people. Here a couple is headed to the Low Brow Lounge, and what they did for this Uber driver was anything but low brow. So glad to be able to share this heartwarming story in this season of sharing.
What happens if your Uber driver takes a different route than promised? [QZ.com]
Sum and Substance: Not long ago, I took a Juno, one of New York City’s many ride-hail services, from my Brooklyn apartment to John F. Kennedy airport.
The Juno ride I booked was a “Bliss,” the lowest-cost option the company offers. The fare I was quoted and agreed to pay at the time of booking was around $37, significantly cheaper than the prices Uber and Lyft were offering at the time…
You can imagine my surprise, then, when I received my receipt for this particular trip and saw Juno had charged me not the promised $37, but $54.75, a difference of more than 40%. After clearing security and settling in at my gate, I sent a note to Juno’s customer support line, calling the fare increase inappropriate and requesting a refund to reflect the upfront price I was quoted.
Within five minutes, a support rep wrote me back. Juno was sorry my final fare was different from the upfront price and issued me a refund, said the rep, identified as “Ron A.” He went on to explain:
The upfront fare price may be altered in cases where the destination is changed during the ride cycle, or if the time/distance of the ride has significantly exceeded the predicted amount. After reviewing your ride we can see that the reason your final fare altered is due to the route taken being longer in both time and mileage than the upfront fare anticipated.
This was certainly the case with my ride. The company had projected my fare assuming a route through Brooklyn to the airport that was more or less a straight line. My driver, however, opted to take a different and significantly longer route recommended by his navigation system that looped around the southern edge of Brooklyn and back up and over to JFK…
Unpredictable routing turns out to be the key hitch in the presumptive upfront-ness of upfront pricing. “The rider upfront price may change if a rider adds stops, updates their destination, or the route changes significantly,” Uber explains on its website. “When this happens, a rider’s final price is calculated based on the actual time and distance of the trip.”
… A Lyft spokesman said the company adheres to upfront prices in most cases, but in rare circumstances might change the price for a rider if the driver took a route that was significantly longer (in minutes or miles) than anticipated. Lyft said it reverts to simple time and distance pricing if a rider does something to change the route, like requesting a friend be picked up or changing their destination. …
My Take: I’m a little surprised we haven’t heard more about this issue, because routes taken are often a matter of controversy and/or contention. Whenever there’s a question about a route, I consult with the passenger and will follow their preference, if for no other reason than to make them feel they’re in control.
Most of the time they will simply defer to my judgement or the app. But if you’ve given them the chance to choose their route, then you’ve defused any possibility of something like this happening – to the surprise of the passenger.
Uber establishes comp-like program for drivers [Business Insurance.com]
Sum and Substance: Uber Technologies Inc. came under fire in 2018 on multiple fronts: accusations of racial bias, a now-rescinded policy of allegedly requiring sexual assault victims to sign confidentiality deals and the death of a woman killed by a self-driving Uber car in Arizona in March.
But much of the criticism and some of the legal challenges surrounding the rideshare company in recent years relate to the classification of its drivers as independent contractors rather than employees and the lack of benefits associated with such relationships.
However, San Francisco-based Uber last year launched an insurance program to give its drivers access to Driver Injury Protection, offered through Aon PLC and OneBeacon Insurance Group,
Brad Nail, Uber’s senior risk and public policy manager based in Washington, told the National Association of Insurance Commissioners’ workers compensation task force at its summer meeting in Boston in August. Uber drivers are covered when they log onto the app, when they are en route to pick up passengers and when they are transporting passengers.
My Take: Just one more example of the Orwellian world we live in. Is this workers’ compensation, or isn’t it? I don’t know, nor does anyone else seem to know.
How Toyota Is Winning Ride Hailing [The Drive]
Sum and Substance: With the Uber and Lyft IPOs coming up next year, there has been a lot of debate about how much these two increasingly ubiquitous but also money-losing companies should be worth. Though hailed as the future of mobility, ride-hailing companies have been unable to make their core operations profitable, subsidizing drivers and rides in hopes of reaching a level of scale where their unit economics start to work out. If success in ride-hailing does prove to come down to scale, Uber is winning right now. But if success involves making money, the company that’s “winning” ride-hailing might just be Toyota.
Any anecdotal exposure to Uber or Lyft suggests that Toyotas, particularly Toyota Hybrids, are some of the most popular choices for ride-hailing drivers. The Rideshare Guy’s 2018 survey of Uber and Lyft drivers confirms it: 22% of drivers say Toyota is their preferred vehicle brand—more than double the rate of the next highest brand (Ford, at 10.5%)…
This helps explain one of the bigger mysteries in the emerging mobility space: what do Toyota and Uber, two companies that couldn’t be more different, see in each other?… But it turns out that Uber is actually a marketing tool that helps car companies like Toyota sell more sedans than it would otherwise, making Uber’s anti-ownership prediction as off-base as its prediction that it would reduce congestion in cities.
Now, with companies like Toyota offering turnkey fleet management tools that can further improve fleet efficiency, we may see even more professionalization of ride-hailing fleets…
Editor’s Note: An interesting analysis of why Toyota vehicles are so popular among rideshare drivers, why Toyota is investing in rideshare companies and their own ridesharing/vehicle rental fleet and the potential future of ridesharing and ‘professional fleets.’ Is an eventual return to taxi-like fiefdoms inevitable? Take a look at the article and let us know what you think!
Readers, what do you think of this week’s round up?
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-John @ RSG
Latest posts by John Ince (see all)
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- California Rewriting Rules on the Gig Economy - June 8, 2019