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.
The European Court of Justice ruled on Wednesday that Uber should be regulated as a transportation company, not a technology company, potentially exposing the ridesharing platform to new licensing and tax requirements within the European Union and hinting at how the court will likely rule on other regulatory issues involving gig economy companies.
The court’s finding that Uber “must be classified not as ‘an information society service’ but as ‘a service in the field of transport’” means that under European law, it may be regulated differently in each member state, Sky News’s Bethany Minelle explains—in contrast to digital platforms, which are held to a single set of rules throughout the EU. This opens the way for EU countries and cities to hold Uber to the same standards as other transportation services in their jurisdictions:
While the long-running case, which originated in Spain, is not legally binding it is likely to foreshadow the decision in the majority of EU cases. The Barcelona-based legal firm representing the cabbies who filed the lawsuit said that the ruling was “a social victory” with “great judicial significance”. …
Juno is one of several ride-sharing services that emerged last year as more “driver-friendly” alternatives to Uber and Lyft. The New York City-exclusive startup courted drivers with an equity program that offered them restricted stock units if they spent 30 hours a week or more using the platform, and in turn marketed itself to customers as an ethical diamond in the rough of the gig economy. In Juno’s model, values-conscious riders would pay a bit more to know that their driver was being paid fairly, better rewards would attract better drivers, and the equity they accrued would afford them some financial stability. It was a prime example of HR as PR, especially for a competitor to Uber, which has faced some controversy over how it treats its drivers.
Last week, however, Juno announced that it was being acquired by Gett, a larger and more established ride-hailing company, for $200 million. Drivers, however, won’t be seeing much of that money, Recode’s Johana Bhuiyan reported, as Juno did away with the scheme as part of the acquisition deal:
Drivers who’ve already earned shares would be cashed out. Several of the drivers who forwarded their emails to Recode are receiving around $100 for their shares, regardless of how many shares they had accumulated. One had roughly 1,600 shares, another more than 3,500 and another had more than 6,000.
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 labor tribunal in the UK on Friday ruled that Uber’s drivers are employees of the ridesharing company and have the right to paid vacation and a minimum wage, the Associated Press reports:
The GMB labor union says the decision will have a “major” impact on the drivers, who argued they should get the labor rights of employees, not self-employed workers. The Central London Employment Tribunal’s decision Friday affects as many as 30,000 drivers. Uber argues it is a technology company that links self-employed drivers with people who need rides. It also says drivers should seek arbitration in the Netherlands, where Uber’s European operations are based.
“Uber drivers often work very long hours just to earn enough to cover their basic living costs. It is the work carried out by these drivers that has allowed Uber to become the multi-billion-dollar global corporation it is,” said Nigel Mackay, the attorney from law firm Leigh Day who is representing the workers. “We are pleased that the employment tribunal has agreed with our arguments that drivers are entitled to the most basic workers’ rights, including to be paid the national minimum wage and to receive paid holiday, which were previously denied to them.”
Uber intends to appeal the ruling, which, if it were upheld, could have major consequences for Uber and other gig economy platforms in the UK. Uber has long maintained that its drivers are independent contractors or self-employed business owners and that it does not have an employer-employee relationship with them as it does not dictate when or where they work. The drivers who have brought lawsuits against the company in several US states as well as the UK disagree—in this case, the plaintiffs’ lawyers argued that because drivers receive ratings and are not told in advance where riders wish to be dropped off, they are not operating as self-employed businesses as Uber claimed. One study concluded that features of the Uber app exercise enough control over drivers’ behavior to constitute “algorithmic management.”
Ivana Kottasova at CNN Money touches on what the ruling means for Uber, its drivers, and other firms:
Under U.K. law, [drivers] could even claim back pay for the period they’ve already worked for Uber, said Ed Marchant, an employment lawyer at IBB solicitors. “From Uber’s perspective the substantial additional cost resulting from the judgment means that they are likely to significantly change their business model and/or pass these extra costs onto customers,” Marchant said. …
The GMB said it is already reviewing contracts at other companies.
At the CIPD, Georgi Gyton delves into the potential ripple effect:
In this age of HR as PR, signaling to customers that you take good care of your employees can pay dividends. In the ridesharing economy, where the two market leaders have both come in for some negative press (and litigation) over their drivers’ concerns about pay and job security, newer startups have sought to capitalize on the controversy and sell a somewhat more expensive service by assuring customers that their drivers are well taken care of.
These startups are banking on the theory that a more values-motivated generation of consumers will pay a premium for the peace of mind they get from not feeling like they are participating in someone else’s exploitation—the same logic behind fair-trade coffee, for example. Now, a new price comparison tool called RideGuru is helping ridesharing customers make informed choices among the various platforms based on what their drivers stand to earn from their trips. TechCrunch’s Natasha Lomas explains how it works:
The site is the latest launch from Boston-based company Unleashed, which already operates a cab fare-related website with a fare calculator feature, called taxifarefinder.com (and another focused solely on Uber: uberfarefinder), but says its mission with RideGuru is to “bring transparency to the rideshare industry” — hence spinning out a standalone price comparison site spanning multiple ride-sharing services.
The race to develop safe, intelligent, and mass-marketable self-driving cars has sparked a talent war among automotive and tech companies. The competition only stands to get even fiercer, especially now that Uber is launching its first self-driving car service in Pittsburgh, Pennsylvania, Bloomberg’s Max Chafkin reports:
Starting later this month, Uber will allow customers in downtown Pittsburgh to summon self-driving cars from their phones, crossing an important milestone that no automotive or technology company has yet achieved. Google, widely regarded as the leader in the field, has been testing its fleet for several years, and Tesla Motors offers Autopilot, essentially a souped-up cruise control that drives the car on the highway. Earlier this week, Ford announced plans for an autonomous ride-sharing service. But none of these companies has yet brought a self-driving car-sharing service to market.
Uber’s Pittsburgh fleet, which will be supervised by humans in the driver’s seat for the time being, consists of specially modified Volvo XC90 sport-utility vehicles outfitted with dozens of sensors that use cameras, lasers, radar, and GPS receivers. Volvo Cars has so far delivered a handful of vehicles out of a total of 100 due by the end of the year. The two companies signed a pact earlier this year to spend $300 million to develop a fully autonomous car that will be ready for the road by 2021.
The Volvo deal isn’t exclusive; Uber plans to partner with other automakers as it races to recruit more engineers. In July the company reached an agreement to buy Otto, a 91-employee driverless truck startup that was founded earlier this year and includes engineers from a number of high-profile tech companies attempting to bring driverless cars to market, including Google, Apple, and Tesla. Uber declined to disclose the terms of the arrangement, but a person familiar with the deal says that if targets are met, it would be worth 1 percent of Uber’s most recent valuation. That would imply a price of about $680 million. Otto’s current employees will also collectively receive 20 percent of any profits Uber earns from building an autonomous trucking business.
Uber has always been up-front about its goal of eventually using self-driving vehicles instead of human drivers, but it may come as a surprise to see it happening already. The ongoing controversy and litigation over Uber drivers’ status as employees or contractors will be rendered moot if they are ultimately replaced by computers. On the other hand, one expert tells the Associated Press that the Uber probably won’t be able to get rid of human drivers anytime soon, at least not in Pittsburgh: