Unions Target Uber and Lyft as Next Payday

UberLabor groups have sought out relationships with Uber drivers, whom the company recently settled with, but has yet to classify as employees.

“A day after Uber announced a $100 million settlement with some drivers in California and Massachusetts, the Teamsters announced plans to form an association for workers in California’s ride-hailing industry,” USA Today reported. “The Teamsters said drivers had approached the transportation union seeking help with benefits, a dispute resolution procedure, legal and tax services, advocacy assistance, and a stronger voice on the job,” the paper added, although the way such assistance would be organizationally formalized remained unclear. “Members would probably not join the actual union, but would instead join an association, which could possibly be funded, though not controlled, by Uber.”

Crunching the numbers

So long as Uber and its fellow ride-share companies stay away from the employer-employee model, unionization would be off the table. “One problematic aspect for the Teamsters is that Uber and Lyft drivers are still classified as independent contractors,” as Fortune noted. “As a result, these workers would not be able to form a traditional union. Instead they would have to form an association, which would have limited bargaining abilities and be allowed to speak on the behalf of drivers.”

For that reason, Uber was willing to shell out substantial cash in its California and Massachusetts settlements — “up $84 million,” as the Verge observed, plus “another $16 million if the company eventually goes public.”

“In exchange, Uber gets to keep its business model — drivers are ‘partners’ with the flexibility to make their own schedules, but lacking access to traditional benefits like health care — which has helped fuel its growth across the world, as well as its other worldly valuation of $62.5 billion –€” making it the most valuable technology startup on the planet.”

“If the lawsuit had gone to trial, and a jury decided that drivers indeed deserved to be full employees, then Uber could have suddenly found itself responsible for all sorts of extra costs, from Social Security payments to minimum wage requirements,” the Verge suggested. But while some Uber drivers have hoped for more benefits, some analysts have questioned whether Uber could sustain itself at all without relying on its unusual business model.

More hurdles

And in California, the settlement will not become law without clearing at least one more hurdle. “Uber’s settlement depends on the approval of a single judge,” Forbes noted. “This is by no means a foregone conclusion, as Uber’s rival Lyft learned earlier in April when Judge Chhabria rejected its $12.25 million settlement of a similar class action. Among other reasons given for the rejection, the amount Lyft would pay was ‘glaringly’ inadequate monetarily, did not provide sufficient payment to the state of California under the Private Attorney General Act claim, and the non-monetary relief, which did not meet one of the lawsuit’s primary goals of reclassifying drivers as employees, was insufficient to overcome these problems.”

At the same time, according to the site, the state’s Private Attorney General Act could allow future suits by “unions such as the International Brotherhood of Teamsters, which continues to attempt to organize Uber drivers in California and in the state of Washington,” or “the U.S. Department of Labor and the National Labor Relations Board, which have made clear their skepticism of the independent contractor model and intention to allow organization by misclassified employees.”

In fact, this March, the NLRB already sued Uber in a San Francisco federal court, “demanding it obey subpoenas related to five unfair labor practices cases,” as Politico reported. “And just last week an NLRB regional director filed a complaint against a Los Angeles company for allegedly misclassifying its trucking workers as independent contractors. That gives the board an opportunity to rule that misclassifying workers is an unfair labor practice, an issue with obvious relevance to Uber.”

Originally published by CalWatchdog.com

California regulators permit Uber and Lyft to offer carpooling services

As reported by the Los Angeles Times:

State regulators on Thursday granted companies such as Uber and Lyft permission to offer carpooling, sanctioning a service that has allowed fast-growing San Francisco companies to offer lower-cost rides.

After weeks of delays, the California Public Utilities Commission voted 4-1 on Thursday to approve commercial carpooling. Commissioner Mike Florio cast the sole vote opposing the motion because he wasn’t convinced that the decision was legal.

“If I were in the Legislature, I’d vote for this, but I’m not,” Florio said during the PUC meeting in San Francisco. “I think what the Legislature has said is clear: An individual fare is an individual fare, and we cannot go with this approach.”

Assemblyman Phil Ting (D-San Francisco) introduced a bill a year ago to change a 50-year-old Californian law that …

Click here to read the full story

Unintended Consequences of Uber Boom

There’s been a lot of chatter in California these days about Uber, Lyft and so-called “transportation network companies,” or TNCs – and why not?  After all, these evolving services were “born” in the Golden State, which has earned renown as a beacon and world leader of innovation and technology. Consumers, the media and many politicians have focused their attention on this popular phenomenon as it moves as rapidly as its driver-owned fleet.

UberBut, looking closer at the issue, this baby boomer can’t help but cite a few choice words from a Crosby, Stills and Nash hit: “Traveling twice the speed of sound, it’s easy to get burned.”  What many leaders are now rightly taking into consideration are the unintended consequences of these TNCs – a safe and competitive landscape for consumers, the marketplace and our highways.

Thankfully, many leaders in the State Capitol are realizing that we need to know more about the Ubers of the world – what they do, how they operate, how they are regulated, and what this means for the future. In recent weeks, a joint legislative hearing was convened to focus on just that, and the facts speak for themselves. There was general unanimity that these new technologies are a good thing if done right, but too many uncertainties remain. Will this new service lead to less traffic or more? Does it exclude certain California consumers while favoring others? What are the views and perspectives of both driver and passenger? How seamless is the background check process for all drivers? Many unknowns persist all-around. In fact, the lobbyist for one TNC wasn’t even aware of the rough number of cars they have on the highway.

Much of the emphasis during this hearing and otherwise has been on the fallout this new “app” service has had on other people-moving services, notably taxis and limousines, but there has been little, if any, public discussion about its impact on another major contributor to jobs, the economy and our communities: California’s same-day delivery industry.

These are the mostly mom-and-pop family businesses that deliver vital goods and products like blood, medical supplies, rare construction parts and legal documents to local customer’s door-to-door, business-to-business, in real time. To be clear, the owners of these businesses are not “anti-TNC”, and they realize they must keep up with the times to be competitive. As times change, so must they and their business models to court the customer with best-in-class pricing, cutting-edge technologies and quality customer service. And the majority of these companies are, in fact, doing just that.

We believe in a free and competitive marketplace. That’s not our concern. What is problematic is that the delivery industry, many that have been in existence for 20, 30, 40 years or more and operating on razor-thin margins, are required to comply with specific motorist regulations and requirements while these TNCs are not being subjected to the same level of enforcement and accountability.

The current law requires that delivery companies must possess a Motor Carrier Permit through the DMV to move goods for hire. TNCs are not being held to the same standard and are, in fact, moving products from Point A to Point B with no permit and ignoring the law.

Delivery companies must obtain adequate insurance to ensure that the general public is protected. TNCs aren’t held to that same standard. Not only is this unfair, it puts the lives of millions in our communities at risk.

As our legislative leaders debrief from this recent hearing and consider next steps, we urge them to consider policy that will bring accountability and safety for all of us:

  • A better-defined Motor Carrier Permit that spells out guidelines for transporting both goods and people
  • Reasonable insurance requirements for drivers and companies in the transportation community
  • Improved accountability and uniformity for background checks and fingerprinting for all related personnel to maximize safety for consumers, employees and others on the highways and roads
  • And better clarification and simplification of the definition of “independent contractor” versus “employee”.

The goal here is to identify changes and a proposal that all motorist stakeholders – delivery companies, TNCs, taxi services, livery services and others – have had a role in shaping and support.

Our small business members believe in running the race – after all, they do it every day when they open the doors of their business – but our leaders in Sacramento need to foster an environment that allows all of us to compete on a level – and safe – playing field.

Executive Director, California Delivery Association.

Originally published by Fox and Hounds Daily

“Sharing” Economy Puts Democrats Between a Rock and a Hard Place

Sharing.

It sounds so simple, but as an economic trend, sharing is a divisive issue for Democrats.

Tension over the so-called “sharing economy” has been on full display in Sacramento, with Democrats who control the Legislature facing mounting pressure. On one side are trendy tech ventures that are gearing up their political lobbies. On the other: Democrats’ traditional allies in organized labor, who remain highly influential.

California-based companies that allow people to make money by “sharing” their homes and cars have hit the mainstream. Uber, the smartphone-based ride-hailing service, operates in 300 cities globally. And Airbnb, a website that allows homeowners to rent a room to vacationers, now has 55 million users around the world.

The expansion has sparked predictable pushback from the traditional providers of rides and rooms: the taxi and hotel industries. Now union leaders are trying to convince Democrats that the trend in economic “sharing” represents a fundamental shift that will harm workers.

“Is this the future of our economy, where you have no security of getting a regular paycheck, no security… if something happened to you on the job?” said Angie Wei, a lobbyist for the California Labor Federation.

Her group represents several unions, including those for hotel workers and cab drivers. These old-school industries have longtime ties to many Democrats in the Legislature today. Taxi companies, for example, routinely give political donations in local races, leading to relationships with politicians who advance from city councils to seats in Sacramento. Hotel worker unions are big donors in legislative races, with one group spending $1.2 million in California during the last election cycle.

uberDespite the clout, Wei worries “we’re losing on this issue. … Uber has romanced legislators [into thinking] that they are a new, innovative company and that if you oppose Uber or their model, you’re opposing innovation.”

The Internet-based companies are relative newcomers when it comes to political influence in Sacramento. But they’re showing they can play the game:

  • Ride-sharing company Lyft began making political contributions in California last year, including $15,000 to Gov. Jerry Brown’s ballot measure committee and $4,100 to Senate President pro Tem Kevin de León, D-Los Angeles. Uber spent nearly $200,000 on lobbyists in Sacramento so far this year – more than Walmart and Bank of America, as the Los Angeles Times has noted.
  • Airbnb recently hired Chris Lehane, a well-known Democratic political consultant who worked in the Clinton White House. The company also retained its first Sacramento lobbyist this year.
  • A national trade group called the Internet Association opened a Sacramento office for the first time last year. It has hosted numerous events for California lawmakers, including a $16,000 reception at the state Democratic convention in Anaheim last spring.

Robert Callahan, the association’s lobbyist, said lawmakers’ familiarity with internet-based brands has helped the new industry break in.

“Legislators are waking up and searching Twitter and going on Instagram and posting on Facebook and sending Gmail. They have a personal attachment with our companies,” he said. “That helps us when we go in and say, ‘We have an issue we think you should resolve.’”

A recent example was a bill that would allow state employees to be reimbursed for using companies like Uber and Airbnb when they travel for work. The bill sparked a heated debate between Democrats on the Senate floor last week.

“Why does this industry deserve a special status?” said Sen. Ben Hueso, D-San Diego, who worked in his brothers’ taxi business for 15 years before he was elected. “Why do they deserve protection from the Legislature?”

The bill, AB229, is now on the governor’s desk after it passed the Senate with the support of all Republicans and less than half of the Democrats.

The new companies don’t always get their way, though. Two bills backed by Uber stalled in the Senate committee chaired by Hueso. His spokeswoman said he plans to hold a hearing this fall to deal with ride-sharing issues more comprehensively.

On the home-sharing front, Airbnb fought back legislation that sought to make it easier for cities to collect taxes on vacation rentals made through web-based services.

Sen. Mike McGuire, D-Healdsburg, the bill’s author, said the trend has been a burden on his wine country community, with wild parties and public drunkenness reported at houses booked through the sites. Still, the measure stalled in a committee. McGuire said he will try again next year.

Airbnb’s vast user network is an obstacle he’ll have to confront. Lehane said its customers flooded the statehouse this spring with more than 769,000 emails asking lawmakers to reject McGuire’s bill.

“When people find out about issues, they really mobilize,” Lehane said. “This is a company that is, at some level, redefining capitalism.”

Originally published by CALmatters.org

L.A. hits the brakes on plan to allow Uber at LAX

As reported by the Los Angeles Times:

The push to make Los Angeles International Airport the largest in the nation to allow Uber and Lyft has hit an obstacle at City Hall as the ride-hailing services battle with the powerful taxicab industry for influence.

Last month, city officials cleared the way for the app-based companies to pick up passengers at LAX. But on Wednesday, the City Council voted overwhelmingly to slow down the process and take a closer look at the issues.

The outcome is being closely watched not just by people who use LAX but by other cities that are debating whether to allow ride-hailing at their airports. …

Click here to read the full article

California’s Uber Hunt

uberThe way things are going, Uber may soon face a court challenge in California over its failure to use an umlaut. The popular ridesharing startup has already been hit by an administrative law judge’s recommendation that the company pay $7.3 million in damages and suspend operation in the state. At issue: Uber’s alleged failure to provide the California Public Utilities Commission with internal data about how many customers with service animals or wheelchairs Uber drivers serve, along with time, location and fare data.

This decision came just a month after the California Labor Commission redefined the app-based ride-hailing service’s business model. In that case, San Francisco Uber driver Barbara Ann Berwick demanded that the company reimburse $4,000 worth of expenses. The commission ruled that Berwick, a transsexual who previously operated a phone sex business — Linda’s Lip Service — was a full-time-equivalent employee during four months of sporadic driving for Uber. (Berwick, now a financial consultant, expressed disappointment with the money an Uber driver makes.) The decision directly threatens Uber’s business model, in which drivers sign up as independent contractors with a minimum of the fuss and paperwork associated with modern hiring, choose their own hours, and are clearly remunerated on a piecework basis.

Last week, a U.S. district judge in San Francisco allowed a group of cab companies to proceed with a false-advertising lawsuit against Uber. The same judge also greenlit a suit against Uber claiming that it spammed potential drivers with recruitment text messages. That suit was dismissed when electronic records showed that one of the plaintiffs had begun pursuing the company herself.

Notably, complaints about Uber typically aren’t coming from customers, and even among the firm’s drivers, crusades like Berwick’s are rare. In fact, what’s striking about the various campaigns against ride-sharing is their reliance on paperwork and credentialing instead of outcomes. The CPUC, for example, doesn’t assert that Uber is harming actual handicapped people, only that the company has failed to produce paperwork that proves the absence of harm. Similarly, the cab companies’ speech-related lawsuit — which focuses on safety claims made in Uber ads — does not claim that traditional taxis are safer than Uber rides. The plaintiffs assert instead that cab drivers are subjected to more paperwork than Uber drivers.

The anti-Uber campaign’s reluctance to assess outcomes is understandable, given the public’s strong revealed preference for the company. Interest groups can complain, but drivers and customers continue to vote for Uber with their time and money. In a free country or a sane state, a clear market decision in favor of a business would be the end of the discussion. But Uber is increasingly under pressure to furnish evidence that its model works in theory as well as in practice.

The company recently commissioned Los Angeles-based BOTEC Analysis to measure service in low-income neighborhoods — a market in which anecdotal evidence already suggests that Uber’s influence has been positive. BOTEC compared UberX with taxi services in Van Nuys as well as Central and East Los Angeles. The median wait time for an UberX ride in L.A. neighborhoods was five minutes and 52 seconds; for a taxi ride, it was 14 minutes and 33 seconds. The maximum recorded wait time for UberX was 20 minutes; for a cab, 57 minutes. Despite Uber’s widely maligned practice of “surge pricing” — a concession to the law of supply and demand that is for some reason considered outrageous — UberX also soundly beat traditional cabs on price, with a median cost per ride of $6.28, versus $15 for taxis. Surge pricing didn’t even produce a higher maximum price. UberX’s max cost per ride was $11.68, against $22 for cabs.

BOTEC is led by UCLA public policy professor Mark Kleiman, a thoroughly un-libertarian, good-government figure. Nevertheless, Uber opponents have dinged the study as free-market propaganda from the Uber central command. SHOULD YOU TRUST UBER’S BIG NEW UBER VS. CABS STUDY? New York asks. (Answer: a definite maybe.) Meantime, L.A. Weekly wonders, “Is Uber really being straight-up about its commitment to serve folks other than young, white professionals and party people?” But defenders of the taxi status quo face an even bigger hurdle: Uber’s very existence is an advertisement for the free market. It’s an obviously less-regulated initiative that has produced measurable, positive outcomes across a wide spectrum. No wonder people hate it so much.

Long Beach allows taxis to lower fares as they compete with Uber, Lyft

As reported by the L.A. Times:

Long Beach officials are pursuing a new strategy to resolve the growing rift between taxi drivers and ride-hailing services such as Uber and Lyft, becoming the nation’s first large city to relax restrictions on cabs, rather than increase regulation of their new competitors.

Removing requirements that taxi drivers say have put them at a competitive disadvantage, the City Council voted Tuesday to allow its exclusive cab franchise to rebrand itself, update the appearance of its fleet and offer variable, discounted fares, free rides and other price promotions to lure customers.

In addition to a new name (Yellow Long Beach) and a new Uber-like app (Ride Yellow), Long Beach Yellow Cab will repaint its traditional mustard-colored taxis a more vivid lemon. …

Click here to read the full article

CARTOON: Ubering on Easter

Easter Cartoon

Bob Englehart, The Hartford Courant

Regulated Uber? Or Deregulated Taxis?

Considerable disagreement continues over whether or how to regulate ridesharing companies, but both sides concur on the need for regulatory parity uberbetween taxis and ridesharing services.

Policy experts on both sides of the debate met Tuesday for a discussion hosted by the Cato Institute, a libertarian think tank, and while they generally agreed that the same regulatory framework should apply to both taxis and ridesharing services, this was the extent of their accord. (RELATED: Five Ideas to Put Taxis, Ridesharing Companies on an Equal Footing)

Brink Lindsey, Cato’s vice president of research and the moderator of the discussion, framed the issue by saying that, “ridesharing is the hot new industry of the last few years,” but has come under fire from traditional taxi operators, who claim it has attained success mainly by “evading existing taxi regulations.”

Lindsey also pointed out that since 2012, when Uber and Lyft began operation, the market valuation of both companies has increased substantially, while the markets for taxi medallions in New York City and Chicago have all but collapsed, suggesting that ridesharing enjoys certain advantages over traditional taxis.

According to Marc Scribner, a research fellow at the Competitive Enterprise Institute, modern taxi regulations date back to the 1920s, when streetcar operators “first began lobbying for anti-competitive regulations.” (RELATED: Anti-Uber Efforts Mostly Fizzling)

By the 1940s, those restrictions had been adapted for the taxi industry in most cities, primarily in the form of taxi medallions, minimum fares and geographical service requirements, all of which, he claimed, serve to limit competition, and thus service quality, in the industry.

Dean Baker, co-director of the Center for Economic and Policy Research, acknowledged that ridesharing is “a great innovation,” but said it is also important “to decide what legitimate regulation is,” especially when it comes to passenger safety.

He claimed, for instance, that, “it doesn’t make sense not to have a uniform policy for insurance,” because ridesharing passengers should be entitled to the same reasonable expectation of compensation in the event of an accident that taxi passengers already enjoy, even if the requirement does impose some costs on business.

Similarly, Baker also asserted that ridesharing companies should be required to perform background checks on drivers, just as taxi companies must, saying, “It seems reasonable to ensure that drivers don’t have a violent criminal history.”

Besides, he added, “I would hate the idea of my 87-year-old mother driving an Uber.”

In addition, Baker proposed that, “minimum wage and overtime rules should apply, and ridesharing drivers should be able to bargain collectively,” claiming those steps would help to ensure commensurate pay rates for both taxi and ridesharing drivers.

However, Matthew Feeney, a Cato policy analyst, countered that ridesharing companies have been impressively responsive to concerns such as those Baker raised, which Feeney takes as evidence that the market is better able to handle such challenges than is the government.

“Before we ask if government should regulate,” he said, “we should ask if companies will regulate themselves.” (RELATED: Adam Smith Opposes Regulation of Taxi Industry)

“Insurance is a legitimate concern,” Feeney granted, but he said ridesharing companies have already taken steps to address that shortcoming. In the case of Lyft, for example, “a $1 million insurance policy takes effect as soon as a driver accepts a passenger.”

There is a “gray area” in that coverage when a driver has their ridesharing app turned on and is not carrying any passengers, but Feeney said that in most major cities, companies have already sprung up to “fill the gaps” by offering per-mile insurance coverage.

Moreover, Feeney maintained that ridesharing services are inherently safer than traditional taxis for both drivers and passengers. (RELATED: Illinois Governor Vetoes Anti-Ridesharing Bill, Taxis Protest)

Driving a taxi, he explained, is essentially the same as “picking up hitchhikers for a living,” with the predictable result that it is among the more dangerous professions an individual can engage in. In fact, in all but two years between 2006 and 2013, “more taxi drivers were killed on the job than police officers or firefighters.”

The occupation is so risky, he said, not only because taxi drivers are known to carry large amounts of cash (“the mother’s milk of crime”), but also because “their job consists of giving rides to anonymous strangers.”

With ridesharing services, in contrast, “drivers and passengers are not anonymous, and they rate each other,” which serves to deter crime by making it easier to identify and apprehend perpetrators.

“Taxis are not destined to go extinct,” Feeney concluded, “but to maintain relevance they must tap into what makes ridesharing so popular.”

Follow Peter Fricke on Twitter

Originally published by the Daily Caller News Foundation

Regulation of Uber, Lyft Thrown Into Question by California DMV

As reported by the Sacramento Bee:

California’s burgeoning efforts to regulate ride-for-hire companies like Uber and Lyft have reached a fork in the road after the Department of Motor Vehicles issued an advisory that, in mandating commercial registration, threatens to upend the companies’ business model.

Conceived as an alternative to taxicabs, firms like Uber, Lyft and Sidecar allow people to use their personal vehicles to transport customers who have hailed a ride using a smartphone app. They tout their flexibility and potential for non-professional drivers to make some extra cash.

But the DMV said earlier this month that any time a car is used to transport people in exchange for compensation, that car must have commercial plates – an order that contradicts previous state regulations, according to the industry. …