Weekly Roundup: Uber Cuts 10% of Customer Service Jobs and Blames AI

Uber cut 10% of its customer service team due to AI. A federal judge blocked New York’s driver-deactivation law days before it was set to take effect. Travis Kalanick raised $1.7B for a new robotics venture, with Uber among the backers. Lyft CEO says his company is “the good Uber.” Border Patrol warning drivers near the border. We break it all down for you.

Uber Cuts 10% of Customer Service Jobs and Blames AI

Uber Cuts 10% of Customer Service Jobs and Blames AI
Image source: freestocks.org/Pexels

SOURCE – Yahoo Finance

Uber cut 10% of its community operations team Wednesday, its first layoffs tied directly to AI. The company said the move is meant to simplify operations, push in-person collaboration, and “embrace AI.” Remote workers on the team were also told to relocate to a hub office under Uber’s return-to-office mandate. It is the second round of cuts in under two months.

  • The customer service side is where riders and drivers actually reach a human. Uber is now layering AI onto that work, which means fewer people answering when a driver has a problem with an account or a pay dispute.
  • An internal memo said the department had become “too complex and siloed” and that AI cannot scale on top of fragmented processes. In June, Uber also cut 23% of its people division.
  • Uber said in May it would slow hiring because of internal AI use, but it is still recruiting for more than 500 roles, including engineers to support robotaxi partnerships.

A Judge Blocks New York’s Driver-Deactivation Law

A Judge Blocks New York's Driver-Deactivation Law
Image source: Vlad Alexandru Popa/Pexels

SOURCE – Reuters

A federal judge blocked New York City’s law barring Uber and Lyft from deactivating drivers without advance notice, calling it likely unconstitutional. The law was set to take effect July 28. Judge Gregory Woods issued a preliminary injunction, writing that the companies are likely to show the law protects a narrow class of drivers while impairing their contracts. This is the same fight NYC drivers rallied over last week.

  • The law would have required 14 days’ notice before deactivation, with an exception for egregious misconduct, and could have forced rehiring of drivers cut since 2019 solely for lack of notice. That protection is now on hold.
  • The Council passed the law in January by overriding a veto from former Mayor Eric Adams, who argued it would create an expensive bureaucracy for wrongful-deactivation claims.
  • Uber and Lyft argued the law violated their due process and free speech rights and would keep unsafe drivers, including those accused of misconduct, on the road. The injunction holds pending the outcome of their suits.

Uber Founder Raises $1.7 Billion for a New Robotics Venture

Uber Founder Raises $1.7 Billion for a New Robotics Venture

SOURCE – Financial Times

Uber founder Travis Kalanick raised $1.7 billion in debt and equity for Atoms, a venture to build what he calls a “computer for the physical world.” Andreessen Horowitz is leading the round, and Uber itself is among the backers. Ben Horowitz is joining the board. Kalanick, who left Uber in 2017 after a boardroom clash, wants Atoms to automate industrial work with advanced robotics in mining, construction, heavy transport, and food production.

  • Uber is backing its own ousted founder even as it fights a robotaxi threat from Waymo. The connection runs deeper than money: Atoms now includes Pronto, a mining-AV company founded by Anthony Levandowski, the engineer at the center of the old Waymo-Uber trade secrets case.
  • Levandowski was sentenced to 18 months for stealing trade secrets from Google, then pardoned by President Trump. His company is now under Kalanick’s roof.
  • Kalanick still runs CloudKitchens, the delivery-focused “dark kitchen” network he has led since 2018, which made layoffs and closed locations in 2023.

Lyft’s CEO Says Lyft Is “the Good Uber”

Image source: Adobe

SOURCE – Wired

David Risher says Lyft is now profitable, picks riders up faster, and is the ethical alternative to Uber. His pitch to riders is “Save Money, Check Lyft”: anyone who only checks Uber is leaving money on the table. He points to a case where a stuck-train rider saw $70 on Uber versus $130 on Lyft as proof the two apps price differently and worth checking both. Lyft’s North American share is up to about 31%, from 26 to 27% when he took over in 2023.

  • On the complaint that both companies take too big a cut, Risher said Lyft will “never, ever” take more than 30% after insurance. He also said Lyft raised driver rates because underpaid drivers get frustrated, give worse service, and quit.
  • Fuel is still on drivers. Risher acknowledged drivers pay for gas and said the company tries to help, but did not offer specifics.
  • The autonomous play is fleet management. In Nashville, Lyft services Waymo’s cars, keeping them charged, clean, and running near 24/7, and a shared AV fleet will be available to both the Waymo and Lyft apps later this year. Risher frames a future where you put your car to use on the platform without putting your time in.

Border Patrol Warns Drivers About Cartel Smuggling Runs

Border Patrol Warns Drivers About Cartel Smuggling Runs
Image source: Mark Stebnicki/Pexels

SOURCE – USA Today

The Border Patrol’s El Paso Sector is warning that cartels are booking rides through legitimate apps and directing drivers to isolated desert spots, remote highway shoulders, and staging areas near the U.S.-Mexico border. Agents say smugglers are exploiting unsuspecting drivers.

  • The legal risk is real. Drivers who take these fares can be detained at checkpoints, and federal law allows felony charges for alien smuggling and harboring, per a July 9 Border Patrol release.
  • If a pickup request feels wrong, the guidance is to cancel it immediately and move to a secure area.

QUICK HITS

  • Uber has updated its terms of service to require users who sue the company to disclose litigation funding agreements and waive privilege over related communications. – Bloomberg Law
  • Lyft stock dropped after legal risks unveiled. – TipRanks
  • “I was a loyal Lyft rider until I noticed it charged me more than my partner for the same trips” – Business Insider
  • For more coverage of the autonomous-vehicle industry, subscribe to The Driverless Digest, Harry’s newsletter and podcast covering robotaxis and AVs.

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