Lyft reaches a settlement with the FTC over deceptive earnings claims. Uber released its Q3 2024 earnings. Supreme Court rejects Uber’s appeal to California gig worker law. DoorDash and Lyft join forces. We break this all down for you.
Lyft Settles FTC Charges with $2.1M Fine Over Deceptive Driver Earnings Claims
SOURCE – TechCrunch
Lyft agreed to a $2.1 million settlement with the Federal Trade Commission (FTC) for making deceptive earnings claims to attract drivers. These claims involved exaggerated hourly income figures and misleading promotions.
- The FTC found that Lyft misrepresented earnings by using the highest incomes and including customer tips without proper disclosure that these do not reflect average earnings.
- Misleading promotions promised guaranteed earnings without clarifying they only covered the difference between actual earnings and the guarantee, leading to numerous complaints from drivers, many of whom may not be native English speakers.
- As part of the settlement, Lyft is required to adjust its communications, ensuring clarity in wage estimates by excluding tips and fully explaining promotional guarantees.
Uber Exceeds Revenue Expectations in Q3 Despite Missing Gross Bookings Targets
SOURCE – CNBC
Uber reported its Q3 2024 earnings this week that beat analysts’ expectations for revenue but missed gross bookings projections, leading to an 11% drop in share price. Here are some highlights from the earnings report:
Financial Performance Summary:
- Earnings per share were $1.20, surpassing the 41 cents expected.
- Revenue was $11.19 billion, exceeding the $10.98 billion forecast.
- Gross bookings fell short of expectations at $40.97 billion, below the $41.25 billion expected by analysts.
Business Performance:
- Mobility bookings increased 17% to $21 billion; revenue was $6.41 billion.
- Delivery bookings rose 16% to $18.7 billion; revenue reached $3.47 billion.
- Uber’s freight revenue was $1.31 billion, up 2%.
Operational Growth:
- Trips increased by 17%, reaching 2.9 billion.
- Monthly active users grew 13% to 161 million.
Uber Aims to Broaden Market Presence with New Service Offerings
SOURCE – Bloomberg (Paywall free link)
During Uber’s earnings call, CEO Dara Khosrowshahi discussed the company’s strategic initiatives and growth prospects despite facing currency challenges in some markets.
- Khosrowshahi discussed Uber expanding into suburban and less dense markets with new services like taxis, carpools, and airport shuttles, aiming to increase consumer usage and meet rising demand for on-demand services.
- He also mentioned that the company is reaching new demographics, including teens, and has seen significant success with its Uber One subscription program, which grew by about 70% to over 25 million members who spend more than non-members.
- Partnerships with merchants like H Mart and JD Sports are boosting delivery service frequency, and the growth of Uber’s nascent advertising business, which increased by nearly 80%, is contributing positively to earnings.
Supreme Court Rejects Uber’s Appeal on California Worker Classification Law
SOURCE – Reuters
The U.S. Supreme Court declined to hear Uber and Postmates’ appeal against California’s AB5 law, which could have mandated classifying drivers as employees. However, Proposition 22, a measure exempting app-based drivers from AB5, remains valid, establishing that gig economy workers retain contractor status.
- The 9th Circuit Court ruled that AB5 did not illegally target app-based services, finding transportation and delivery companies more prone to misclassifying workers.
- Proposition 22, backed by the industry, was upheld, allowing drivers to maintain their independent status while offering them certain benefits.
- Uber and Postmates argued that AB5 singled them out unfairly and was not based on rational grounds, but courts have upheld exemptions for many other industries.
DoorDash and Lyft Join Forces to Enhance Membership Benefits
SOURCE – AP News
DoorDash announced a partnership with Lyft to offer ride-sharing benefits to its members, enhancing its competitive edge against similar offerings from Uber.
- DoorDash’s DashPass members will receive discounted rides through Lyft, and Lyft riders will enjoy a free DashPass trial, aligning the benefits with Uber One’s membership program, which offers discounts on rides and delivery.
- This partnership is part of DoorDash and Lyft’s efforts to expand their loyalty programs and attract more customers by adding diverse partners, mirroring similar moves by Uber.
- DoorDash reported strong third-quarter performance, with revenue increasing 25% to $2.7 billion, surpassing Wall Street expectations and achieving a net income of $162 million.
- Total orders for DoorDash grew 18% to 643 million in the third quarter, exceeding analyst predictions.
15 Years in Prison for Uber Attack? #rideshare
Source – The New York Times
23-year-old Manhattan resident Jennifer Guilbeault has been charged with a hate crime for allegedly pepper-spraying Muslim Uber driver Shohel Mahmud after he began praying in Arabic at a traffic light in Manhattan. She pleaded not guilty.
- The incident occurred when Mahmud, who suffered injuries and temporary vision impairment, was attacked without provocation. Surveillance footage reportedly shows Guilbeault expressing racial bias as the motive.
- Guilbeault faces multiple charges, including second-degree assault as a hate crime, which carries a potential 15-year prison sentence.
- Be sure to watch our YouTube Short about the incident!
QUICK HITS
- Postmates founder Bastian Lehmann has launched a new startup called TipTop, which is working on an instant trade-in program at the point of checkout. This service allows retailers to offer TipTop as a payment option, enabling customers to trade in their items as part of the payment process. – TechCrunch
- Rideshare drivers in Denver have launched a new driver-owned service called CO-OP Colorado, a cooperative rideshare platform. – HCN
- Uber struck a partnership with CLEAR to streamline the driver verification process. – Yahoo Finance
Must Listen Or Watch RSG Content
Here are this week’s featured podcast episode and YouTube videos:
- RSG262: GetScale’s Garrett Wood on Finding and Hiring Rideshare and Delivery Drivers
- FTC Fines Lyft For MISLEADING On Driver Earnings
- CHANGES To Uber Eats Pro
- How HAPPY Are You With Uber And Lyft’s Driver PAY?
- The Rideshare Guy en Español
- Make sure you Subscribe so you don’t miss out on future conversations and interviews!
