The New York City Council passed legislation on Wednesday to put a one-year cap on for-hire vehicle licenses and to empower the city government to set a minimum wage for ridesharing drivers, in a crackdown on the largely unregulated growth of platforms like Uber and Lyft, the New York Times reported:
The proposal to cap ride-hail companies led to a clash among interest groups with taxi industry officials saying the companies were dooming their business and Uber mounting a major advertising campaign to make the case that yellow cabs have a history of discriminating against people of color.
Mayor Bill de Blasio and Corey Johnson, the City Council speaker, said the bills will curtail the worsening traffic on the streets and improve low driver wages. … But Uber has warned its riders that the cap could produce higher prices and longer wait times for passengers if the company cannot keep up with the growing demand.
New York is the largest market for Uber in the US, but already regulated ridesharing more stringently than many other American cities. To address concerns about unfair competition from the local taxi industry, New York requires drivers to obtain special licenses from the city’s Taxi and Limousine Commission, along with commercial liability insurance and special plates for their vehicles, which must meet certain eligibility criteria.
The new will not affect Uber and Lyft drivers who are already licensed to operate in the city, but will pause the issuing of new licenses immediately while the city studies the effects of the rise of ridesharing on traffic, driver wages, and the local economy.
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Lyft released its first diversity report on Thursday, in keeping with its promise to do so in the White House Tech Inclusion Pledge launched by the Obama administration last year. Overall, the report paints a picture of a fairly typical tech company, with men making up a substantial majority of technical and leadership roles and a predominantly white and Asian workforce.
In total, 63 percent of Lyft employees are white and 19 percent are Asian, with black and Hispanic (identified in the report as Latinx) employees making up 6 and 7 percent of its workforce, respectively. At higher levels, the diversity decreases, with the report showing that Lyft’s leadership is 70 percent white, 18 percent Asian, 5 percent Latinx, and just 1 percent black. The ridesharing company’s tech team is 51 percent white, 38 percent Asian, 4 percent Latinx and 2 percent black. In tech leadership, just 4 percent of Lyft’s employees are Latinx and none are black.
Lyft’s overall gender composition is uncommonly balanced, with 42 percent of its employees and 36 percent of leaders identifying as female—but on the tech side, women make up only 18 percent of employees and 13 percent of leaders. The report does not address how many employees identify as LGBTQ or people with disabilities, nor does it provide an intersectional analysis of race and gender.
So how does Lyft compare to its larger rival? Comparing against Uber’s first diversity report, which it released in March, we see that Lyft is doing slightly better on gender equality but comparably or slightly worse when it comes racial diversity. Women make up only 36 percent of Uber employees and 22 percent of its leadership; the gender balance of Uber’s tech leadership (89 percent male) is comparable to Lyft’s. While Uber’s workforce (which is much larger than Lyft’s) is slightly more racially diverse, with black employees accounting for 9 percent, Hispanic employees 5.6 percent, and employees who identify as multi-racial 4.3 percent. Uber’s technical staff, however, is almost exclusively white (49 percent) and Asian (48 percent), with very few underrepresented minorities.
Across the last 12 to 18 months, we have observed on an ongoing trend of HR as PR. The premise of this concept is that in addition to promoting their HR strategies with the goal of attracting and retaining the best quality employees, some companies are taking that a step further to make the case that because they treat their employees so well, you should become their customer. This is the PR part of the play.
One example of HR as PR is the trend of companies—most recently American Express—adopting more generous parental leave policies to present a more caring, family-friendly image to both employees and consumers. Another great example is the 30-second TV spot above, one of a series Lyft just released in which they satirize their leading competitor, Uber, as a diabolical entity called “Ridecorp” whose executives mock Lyft for allowing customers to tip their drivers through the Lyft app.
What’s clever about these ads is that they serve as both a recruiting pitch to drivers and a sales pitch to riders at the same time.
First, the ad points out that by being a driver for Lyft, you get tips and can earn more money, the implication being that they are a better employer (the HR part). Customers, meanwhile, receive message is that riding with Lyft is better than Uber because Lyft cares more about their drivers and lets them take tips (the PR part). It’s a message we’ve seen other rideshare startups embrace as a key component of their brand.
This is a smart strategy on Lyft’s part, and as Insight founder Justin Bariso observes at Inc, it appears to be working, as Lyft’s ads have gotten a lot more attention than Uber’s latest ad:
A new report from Pew looks at how many US adults make money from digital platforms, including “gig economy” labor platforms like Uber, capital platforms like Airbnb, and sales platforms like Etsy. Overall, the report finds, 24 percent of Americans earned money in what it calls the “platform economy” in the past year. Pew’s Aaron Smith highlights the findings on who uses these platforms to find work, noting that in total, 8 percent of American adults have earned money on a digital work platform:
Participation in technology-enabled gig work varies by a number of factors, with age being among the most prominent. Some 16% of 18- to 29-year-olds have earned money from online gig work platforms in the last year – roughly five times the share among those ages 50 and older (3%). The median age of U.S. adults who are gig platform earners is just 32 years old. When it comes to the specific types of work that they do, young adults are especially likely to gravitate towards online task work. Fully 12% of 18- to 29-year-olds have earned money doing online tasks, but that share falls to 4% for Americans ages 30 to 49 and just 1% among those 50 and older.
Along with these differences by age, platform work is also more prevalent among blacks and Latinos than among whites. Some 14% of blacks and 11% of Latinos have earned money in the last year from online gig work platforms, but just 5% of whites have done so. Blacks and Latinos are each more likely than whites to have earned money doing online tasks (7% of blacks and Latinos have done so, compared with 3% of whites). But blacks in particular are more likely than whites to have earned money doing physical tasks like working as a ride-hailing driver, or by taking on jobs involving cleaning or laundry (5% of blacks have done each of these activities in the last year, compared with 1% of whites).
The main reasons respondents gave for using online platforms to find work were to have something to do in their spare time, to fill gaps in their income, and to have control over their schedule. Most gig economy workers are financially dependent on the work they do through these platforms; 29 percent told Pew that the income they earned through these platforms was essential to meeting their needs, while 27 percent said it was an important component of their budget. We can compare this finding with other studies published this year, which have found that most gig economy workers rely on these platforms for a sizable chunk, but not a majority, of their income, and that most depend on multiple income streams.
Jason Tester Guerrilla Futures/Flickr
The rideshare company has agreed to a settlement of two class action suits by groups of its drivers in California and Massachusetts that would see it pay up to $100 million and grant some concessions to drivers, but avoid reclassifying them as employees rather than independent contractors. Alison Griswold has the story at Quartz:
The settlement is pending approval by US district court judge Edward Chen. A hearing could happen as soon as June 2, according to court documents. …
Under the deal reached between Uber and the plaintiffs, Uber is paying a guaranteed $84 million to drivers in those states, according to a statement emailed by Shannon Liss-Riordan, the lawyer representing drivers, late on April 21. While the class size was never precisely specified, in California alone it could have covered as many as 160,000 people. Uber will hand over another $16 million should it go public and, within a year of its IPO, multiply its valuation 1.5 times from the $62.5 billion figure that was set during its December 2015 financing.
The most active drivers in the class—those have driven more than 25,000 miles for Uber during—could receive payouts of $8,000 or more, on average, according to Liss-Riordan. Those who drove fewer miles will receive less.
Uber also agreed to change some of its business practices, such as firming up its driver deactivation policies to ensure that drivers are not arbitrarily dropped from the platform, and to help create a driver’s association in each state, which Liss-Riordan said would not constitute a union but could bring collective grievances to management. The attorney also pointed out that this settlement doesn’t prevent a court or labor authorities from reclassifying Uber drivers as employers in the future. As the New York Times mentions, Uber is in litigation over the status of drivers in several other states.
In January, Lyft agreed to settle a class-action lawsuit by its drivers by paying $12 million and making some concessions to drivers’ job security, in exchange for not having to face a trial that might result in its drivers being reclassified as employees rather than independent contractors—a change that could prove fatal to the ride-share platform’s business model. On Thursday, a federal judge rejected the settlement, saying the payout was much less than the drivers deserved, Davey Alba reports at Wired:
US District Judge Vince Chhabria ruled today that the agreement, which would have extended additional benefits to drivers as well as monetary compensation, shortchanged Lyft drivers by as much as half of what they deserve. The settlement agreement “does not fall within the range of reasonableness,” Chhabria wrote. The judge asked the attorneys of both parties to come to a new agreement by May.
Five Lyft drivers, backed by the Teamsters union, are objecting to a class-action settlement reached in January in which the rideshare company agreed to make a $12 million payment and some concessions to drivers but would not be required to reclassify them as employees, Dan Levine reports for Reuters:
The five drivers along with the Teamsters Union plan to criticize the settlement which would pay drivers an average of less than $60, the union said on Tuesday. That is much less than what they are owed as employees, they said. “This settlement will leave Lyft’s business model intact,” said Rome Aloise, president of Teamsters Joint Council 7.
A Lyft representative declined to comment. Plaintiff attorney Shannon Liss-Riordan said she had not seen the union objections, but in the past has defended the deal, saying it provided significant benefits for drivers.
The Teamsters also said it filed an unfair labor practice charge at the National Labor Relations Board, alleging Lyft’s business practices deprive drivers of the right to join a union.
Liss-Riordan is also representing Uber drivers in a separate lawsuit, scheduled to go to trial in June, in which the drivers are seeking to be recognized as employees, rather than contractors. Both companies insist that having to reclassify their drivers would be fatal to their business models, though from the sound of Aloise’s statement, that may be precisely the intent.