Tag Archives: Lyft

Uber, Lyft shares jump as California set to pass gig-worker ballot measure

By Tina Bellon and Munsif Vengattil

(Reuters) – Uber and Lyft stocks soared on Wednesday after California voters endorsed the gig economy’s blistering campaign not to count drivers as employees, even as questions loomed over whether the companies can secure similar privileges in other U.S. states.

Voters in California on Tuesday backed a ballot proposal by Uber Technologies Inc, Lyft Inc and its allies that cements app-based food delivery and ride-hailing drivers’ status as independent contractors, rather than employees.

According to state figures, 58% supported the measure, with nearly 99% of precincts at least partially reporting. The results are incomplete and must also be certified.

Uber’s shares rose 16%, while Lyft jumped 18%. The companies, along with DoorDash, Instacart and Postmates, have collectively poured more than $205 million into the campaign.

Reclassifying drivers could have amounted to more than $392 million each for Uber and Lyft in annual employee-related costs, a Reuters calculation showed.

The companies warned they could cut 80% of drivers, double prices and even leave California, their home market, if they lost. California represented 9%, roughly $1.63 billion, of Uber’s 2019 global rides and food delivery gross bookings, and some 16% of Lyft’s total rides.

The ballot measure, known as Proposition 22, marks the culmination of years of legal and legislative wrangling over a business model that introduced millions of people to the convenience of ordering food or a ride online.

While the proposal maintains workers’ status as independent contractors, it provides them with some benefits, including minimum pay rates, healthcare subsidies and accident insurance.

Uber in an email to California drivers on Tuesday night said it looked forward to providing the new benefits as soon as possible and would offer more details in the coming weeks.

“The future of independent work is more secure because so many drivers like you spoke up and made your voice heard – and voters across the state listened,” the Uber email said.

Uber is scheduled to report third-quarter results after the bell on Thursday.

A group of labor organizations that organized a campaign to oppose Proposition 22 with a fraction of the companies’ funding on Tuesday night called the Yes campaign deceitful.

“The end of this campaign is only the beginning in the fight to ensure gig workers are provided fair wages, sick pay and care when they’re hurt at work,” Art Pulaski, Executive Secretary Treasurer of the California Labor Federation, said in a statement.

The question of whether gig workers should be treated as employees has also become a national issue in U.S. politics, dividing Democrats and Republicans.

Democratic presidential candidate Joe Biden and his running mate, Senator Kamala Harris, have both voiced their strong support for California’s labor law, while the U.S. Labor Department under President Donald Trump has published a rule that would make it easier to classify workers as independent contractors.

While trend-setting California had been the first state to pass a law that requires companies that control how workers do their jobs to classify those workers as employees. But it is far from the only one and unlike in California, laws in many other states could not be reversed by ballot measure.

Stephen Ju, a Credit Suisse analyst, in a note on Wednesday said Proposition 22’s success may stunt other regional efforts to change classification.

Edward Yruma, an analyst at KeyBanc Capital Markets, said the measure could provide a template for other jurisdictions to provide drivers enhanced protections and benefits without reclassifying them employees.

Legislators in Democratic New York, New Jersey, Washington, Oregon and Illinois have introduced similar laws, which have been halted by the outbreak of the novel coronavirus. Several other states have launched audits over failures by app-based companies to pay into unemployment insurance.

Massachusetts in July sued Uber and Lyft over allegedly misclassifying their drivers.

(Reporting by Tina Bellon and Munsif Vengattil; Editing by Shinjini Ganguli and Alistair Bell)

California voters to decide fate of gig economy workers

By Tina Bellon and Lisa Baertlein

(Reuters) – Trend-setting California votes on the future of the gig economy on Tuesday, deciding whether to back a ballot proposal by Uber and its allies that would cement app-based food delivery and ride-hail drivers’ status as independent contractors, not employees.

The measure, known as Proposition 22, marks the culmination of years of legal and legislative wrangling over a business model that has introduced millions of people to the convenience of ordering food or a ride with the push of a button.

Companies describe the contest as a matter of ensuring flexibility for a new generation of workers who want to choose when and how they work. Opponents see an effort to exploit workers and avoid employee-related costs that could amount to more than $392 million each for Uber Technologies Inc, Lyft Inc, a Reuters calculation showed.

Uber, Lyft, Doordash, Instacart and Postmates, some of whom threaten to shut down in California if they lose, have poured $202 million into what has become the most expensive ballot campaign in state history.

“This debate is very emotional for me. I want to keep driving when I want and for whom I want,” said retiree Jan Krueger, 62, who drives part-time for Lyft in Sacramento and got a “Mom Lyft” tattoo on her shoulder.

“Everybody is super concerned about (the companies) leaving or raising prices and not being available in remote areas,” Krueger said of her passengers and driver friends.

The proposition is the app makers’ response to a new California law that requires companies that control how workers do their jobs to classify those workers as employees.

The app companies argue the law does not apply to them because they are technology platforms, not hiring entities, and that their drivers control how they work.

Companies warn they could cut 80% of drivers, double prices and even leave California, if they are forced to pay benefits including minimum wage, unemployment insurance, health care and workers’ compensation.

Uber, Lyft, DoorDash, Instacart and Postmates also have challenged the new law in court, but judges so far ruled against them. Uber and Lyft recently lost an appeal, which narrows their options if Prop 22 fails.

California represents 9%, roughly $1.63 billion, of Uber’s 2019 global rides and food delivery gross bookings, and some 16% of Lyft’s total rides.

Prop 22 would leave gig workers as contractors and provide them with more modest benefits than state law, including minimum pay while riders are in their cars, healthcare subsidies and accident insurance.

Company-sponsored surveys have found that more than 70% of current gig workers do not want to be employees, but labor groups have questioned those polls, saying drivers are divided.

Los Angeles Uber driver Christine Tringali said the companies’ actions were shameful.

“How can someone fight so hard to avoid paying people a living wage and giving them job security? We work just as hard as anyone else,” Tringali said.

Californians are split on the issue. An Oct. 26 poll by UC Berkeley’s Institute of Governmental Studies of over 6,600 state residents found that 46% of voters would vote in favor of the ballot measure and 42% against it, with the remainder still undecided. The poll had a sampling error of 2 percentage points.

First-time voter and college student Jonah Cervantes’ mail-in ballot included a “yes” on Prop 22. He hopes to start driving for Uber or Lyft in a few months.

“It would be a lot harder for people to just hop on” as new drivers without Prop 22, said Cervantes.

(Reporting by Tina Bellon in New York and Lisa Baertlein in Los Angeles; additional reporting by Lucy Nicholson in Los Angeles; editing by Peter Henderson and Lisa Shumaker)

Uber promises 100% electric vehicles by 2040, commits $800 million to help drivers switch

By Tina Bellon

(Reuters) – Uber Technologies Inc on Tuesday said every vehicle on its global ride-hailing platform will be electric by 2040, and it vowed to contribute $800 million through 2025 to help drivers switch to battery-powered vehicles, including discounts for vehicles bought or leased from partner automakers.

Uber, which as of early February said it had 5 million drivers worldwide, said it formed partnerships with General Motors and the Renault, Nissan, Mitsubishi alliance.

In addition to the vehicle discounts, Uber said the $800 million includes discounts for charging and a fare surcharge for electric and hybrid vehicles, the cost of which would be partially offset by an additional small fee charged to customers who request a “green trip.”

Uber said that vehicles on its rides platform in the United States, Canada and Europe will be zero-emission by 2030, taking advantage of the regulatory support and advanced infrastructure in those regions.

The deals with GM and the Renault alliance focus on the U.S., Canada and Europe. Uber said it was discussing partnerships with other automakers.

Uber’s plan follows years of criticism by environmental groups and city officials over the pollution and congestion caused by ride-hail vehicles and calls for fleet electrification.

Lyft Inc, Uber’s smaller U.S. rival, in June promised to switch to 100% electric vehicles by 2030, but said it would not provide direct financial support to drivers.

Uber said its goal is to reduce the overall cost of ownership for electric vehicles, which are currently more expensive than gasoline cars.

The company also released data on its emission footprint and said it would publish reports going forward.

Before the pandemic, electric cars accounted for only 0.15% of all U.S. and Canadian Uber trip miles – roughly in line with average U.S. electric car ownership. At around 12%, the share of plug-in hybrid and hybrid cars was roughly five times as high as the U.S. average.

Ride-hail trips overall account for less than 0.6% of transportation-sector emissions, according to U.S. data, but the total number of on-demand vehicles has significantly increased since Uber’s launch nearly a decade ago, with 7 billion trips last year, according to Uber’s February investor presentation.

Uber said its U.S. and Canadian trips with a passenger produce 41% more carbon dioxide per mile than an average private car once miles spent cruising between passengers are included.

Uber’s plans could be a boon to the auto industry. Stricter environmental regulation, particularly in Europe, is forcing automakers to invest billions to overhaul their operations while consumer demand for electric vehicles remains subdued. Uber is also working with BP, EVgo and other global charging providers to provide discounts and expand the location of charging stations for ride-hail drivers – generally considered a main hurdle to wider EV adoption. Beginning on Tuesday, all U.S. and Canadian Uber drivers in a fully battery-powered electric vehicle will receive $1 extra per trip, and an additional 50 cents in major U.S. cities if passengers choose to pay extra when booking a “green trip.”

(Reporting by Tina Bellon in New York; Editing by Peter Henderson and Leslie Adler)

Uber, Lyft prepare to shut down California rides service on Friday

By Tina Bellon

(Reuters) – Uber Technologies Inc. and Lyft Inc. are preparing to suspend their ride-hailing services in California beginning on Friday morning unless an appeals court rules at the last minute they cannot be forced to treat their drivers as employees, rather than independent contractors.

Lyft in a blog post on Thursday said it would suspend its California operations at midnight.

Uber in a blog post said it would have to temporarily shut down unless the appeals court intervenes.

The companies have sought the intervention of an appeals court to block an injunction order issued by a judge last week. That ruling forced the companies to treat their drivers as employees starting Thursday after midnight, but Uber and Lyft have said it would take them months to implement the mandate.

The appeals court has not yet intervened.

The threat to suspend service in the most populous U.S. state marks an unprecedented escalation in a long-running fight between U.S. regulators, labor groups and gig economy companies that have upended traditional employment models.

California, a state frequently seen as a leader in establishing policies that are later adopted by other states, in January implemented a new law that makes it difficult for gig companies to classify workers as independent contractors.

A judge on Aug. 10 ruled that Uber and Lyft had to comply with the law beginning on Friday, forcing them to treat their ride service drivers as employees entitled to benefits including minimum wage, sick pay and unemployment insurance.

Uber’s fast-growing food delivery business Eats is not impacted by the shutdown, the company has said. Other gig economy companies, including DoorDash and Instacart, will also be able to continue operating under the contractor model.

The shutdown comes at a time when demand for rides has plummeted amid the coronavirus pandemic, with California among the U.S. states with the slowest recovery, according to the companies.

California represents 9% of Uber’s global rides and Eats gross bookings, but a negligible amount of adjusted earnings, Uber said in November. Lyft, which only operates in the U.S. and does not have a food delivery business, last week said California makes up some 16% of total rides.

Uber and Lyft say the vast majority of their drivers do not want to be employees. The companies say their flexible on-demand business model is not compatible with traditional employment law and advocate for what they call a “third way” between employment and contractor status.

Lyft, Uber, DoorDash, Instacart and Postmates are spending more than $110 million to support a November ballot measure in California, Proposition 22, that would enshrine their “third way” proposal and overwrite the state’s gig worker bill.

Labor groups reject the companies’ claims that current employment laws are not compatible with flexible work schedules and argue the companies should play by the same rules as other businesses. They say the companies’ ballot measure would create a new underclass of workers with fewer rights and protections.

An Aug. 9 poll among Californians by Refield & Wilton showed 41% of voters planned to support the companies’ proposal and 26% oppose it, with the remainder still undecided.

(Reporting by Tina Bellon in New York; Editing by Steve Orlofsky)

Risk coronavirus or default: ride-hail drivers face tough choices as U.S. aid expires

By Tina Bellon

NEW YORK (Reuters) – Uber driver Johan Nijman faces a difficult decision as federal unemployment aid expires: risk failing to pay for groceries and even lose his home, or resume driving and potentially catch COVID-19.

Nijman is among thousands of Uber Technologies Inc and Lyft Inc drivers across the United States choosing between physical and financial health risks as $600 in additional weekly unemployment assistance expire.

While drivers are not the only workers struggling, they are particularly vulnerable as their work puts them close to many strangers. Also, as independent contractors, they have none of the formal protection or benefits that employees enjoy.

“I never thought that after working so hard for so long that I would ever find myself in a situation where I had to ask for food one day,” Nijman said.

With type 2 diabetes putting him at higher risk for severe COVID-19, Nijman stopped driving in mid-March when the virus was raging through New York City. Before the pandemic, he earned some $1,500 a week driving for Uber’s high-end black car service in an SUV he bought when he signed up in 2017.

He applied for unemployment and received around $900 in weekly benefits – some $300 from the state and $600 from the federal government. That barely covered his expenses, including city-mandated liability insurance drivers must keep paying.

Without the additional $600, Nijman said he faces financial ruin, putting his car and house on the line.

Other drivers, like Sacramento-based Melinda Pualani, are still waiting for their unemployment claims to process, with agencies overwhelmed by the slew of applications.

“Driving again was simply a necessity because I used up most of my savings and still have to keep food on the table,” Pualani said.

She resumed driving last week, rolling down windows, thoroughly disinfecting her car after every trip and asking passengers to wear masks.

Federal pandemic pay offered a lifeline to many gig workers not eligible for ordinary unemployment insurance. Uber and Lyft lobbied U.S. lawmakers to include gig workers in the taxpayer-funded March coronavirus relief bill and workers remain eligible for state-based assistance.

No data is available on the share of gig workers among the 30 million Americans currently collecting unemployment. But the enhanced $600 pay stopped last week and U.S. lawmakers are at an impasse over how to extend it.

Uber and Lyft have provided drivers with masks and disinfectants. They also pay two-week financial assistance to drivers infected by the virus or ordered to quarantine.

Trip requests dropped 80% in April and remain significantly below prior-year levels. Uber and Lyft are expected to provide updates when they report results later on Thursday and Wednesday, respectively.

For parents, the timing is particularly difficult.

Single mom Denise Rozier, a Lyft driver in Austin, Texas, burned through her savings and in April contracted the virus. Alone and struggling to breathe, she worried she might not recover.

“I have a lot of anxiety, but really need to go back (to work) with school starting and expenses piling up,” she said. “I don’t want to risk my safety, but I also don’t want to depend on my family.”

Rozier is afraid of bringing the virus to her family or even contracting it again.

But she also fears altercations with passengers refusing to wear masks. Uber and Lyft have mandated masks for drivers and passengers, but several driver dashcam videos posted online have shown heated arguments with riders refusing to wear one.

“I wished that people in power find a way to look after people that never looked for a handout,” Queens-based Nijman said.

(Reporting by Tina Bellon in New York; Editing by Ben Klayman and Peter Henderson)

Uber offers COVID-19 contact tracing help amid chaotic U.S. response

By Tina Bellon

NEW YORK (Reuters) – Uber Technologies Inc has quietly launched a service to give public health officials quick access to data on drivers and riders presumed to have come into contact with someone infected with COVID-19, company officials told Reuters.

The service, offered free of charge, could help burnish the image of the ride-hailing giant, which recently launched a new ad campaign spotlighting its “No Mask, No Ride” policy in the United States.

Now being promoted to government health officials in all the countries where it operates, the service provides health departments with data about who used Uber’s services and when and allows health agencies to urge affected users into quarantine, the company officials said.

Information on an individual can be accessed in a few hours, the officials said, with the company considering COVID-19 an emergency involving danger of death or serious physical injury.

Though Uber has provided the data for months now, it has not been put to use in many U.S. virus hotspots.

A recent Reuters review of contact tracing policies by 32 U.S. state and local health departments found most did not use ride-hailing data to track the virus spread. Among those neglecting the data are Texas and Florida, states that have seen a surge in new infections.

Unlike several other countries, the United States has no federal program or mobile application to trace the contacts of people with coronavirus infections, a measure deemed crucial by the World Health Organization in fighting the COVID-19 pandemic.

The U.S. Centers for Disease Control and Prevention (CDC) did not respond to requests for comment.

Dozens of U.S. states in recent weeks began hiring thousands of workers to interview infected patients, identify people they have been in contact with and then order those individuals to isolate. Ride-hailing data could play an important role in that effort, health officials and experts said, because it identifies a larger set of people outside the direct social circle of an infected individual.

“This data could be potentially life-saving in cities where many people use those services,” said Mieka Smart, an epidemiology professor at Michigan State University and a member of the COVID-19 contact tracing work group in Flint.

Uber has long provided data to U.S. law enforcement officials in emergencies or criminal investigations, companies officials said. It first began to focus on health-related issues in 2019, when a resurgence of U.S. measles cases prompted several health departments to request data, the officials said.

In January, company executives flew to Los Angeles to meet with the local health department and CDC officials to discuss how Uber’s data could best be used, according to Uber’s chief of global law enforcement, Mike Sullivan.

The discussion quickly turned to the novel coronavirus, which at the time was only beginning to spread outside of China.

“Our timing ended up being beneficial in that it allowed us to get ahead before COVID started ramping up globally,” said Sullivan, a veteran U.S. prosecutor who leads a team of 100 Uber employees handling data requests around the clock.

In the first half of the year, Uber received a total of some 560 coronavirus-related requests from public health departments in 29 countries, most of which were processed by the company within two hours, company officials said. That compares to only 10 requests from health departments globally in 2019.

Out of the total, 158 requests were filed by health authorities in nearly 40 locations around the United States.

Using the new portal, designed for exclusive use by public health departments, data can be sought based on trip receipts or passenger names. Health officials are prompted to specify what action they want Uber to take as part of the service.

“We want to make sure that they are the experts and we follow their recommendations” on whether to block temporarily a driver, rider or courier from using Uber’s service, Sullivan said. Uber customers with a confirmed infection are automatically blocked from the platform for at least 14 days.

Uber has seen an increase in contact tracing requests from countries credited for their initial success in containing the virus, such as Australia and New Zealand, Sullivan said. He added that contact tracing was also much more coordinated in several European countries than in the United States, including in the UK.

U.S. contact tracing efforts vary from region to region. In some areas, the effort is coordinated on the state level, while cities or counties take charge in others, requests from health departments show.

In Massachusetts, for example, local health departments gather trip details if an infected person tells investigators they have taken a ride-hailing trip. That information is then transferred to the state’s health department, which reaches out to Uber or Lyft to request data.

Lyft said it provided data to U.S. and Canadian health officials through its Law Enforcement Request system, but declined to provide further details, citing privacy reasons.

In California, local officials handle the entire contact tracing process. San Francisco so far has requested ride-hailing data related to the coronavirus pandemic in a handful of cases, according to Michael Reid, a physician who heads the city’s contact tracing program.

“In the end, we need all the data we can to be effective,” said Reid. “Whether it’s Uber or Lyft, or the priest telling you who was in church on Sunday.”

(Reporting by Tina Bellon; Editing by Tom Brown)