California’s Labor Commissioner’s Office slapped Uber and Lyft with lawsuits for depriving drivers’ employee benefits

Ridesharing technology services companies Uber and Lyft are being sued over allegations of violating California’s labor law.

Misclassification of Drivers

On Wednesday, the Labor Commissioner’s Office in California has announced that it is suing Uber and Lyft separately. This was over allegations of wage theft among the two companies by claiming that their drivers are “independent contractors.” This misclassifying move is said to deny their employees of several legal protections, according to the lawsuit.

https://twitter.com/LorenaAD80/status/1291471175827111936

In a statement, California Labor Commissioner Lilia-García-Bower said: “The Uber and Lyft model rests on the misclassification of drivers as independent contractors. This leaves workers without protections such as paid sick leave and reimbursement of drivers’ expenses, as well as overtime and minimum wages.”

Denied Benefits

Classifying the drivers as employees would compel Uber and Lyft to give them added benefits like payment of minimum, compensation for overtime work, and paid rest periods, among others. If the drivers are still classified as independent contractors, the added advantages are not provided. The lawsuits also tell that the companies did not provide sick leaves and accurate itemized wage deduction statements.

These lawsuits also aim to return to the drivers of both Uber and Lyft the wages owed to them by the companies. Bower’s office had received almost 5,000 claims from drivers who are not paid correctly.

California’s AB5 Law

On May, Uber and Lyft were also both sued by several city attorneys and California’s attorney general for the same misclassification. Their lawsuit accused the ridehailing companies of violating the state’s Assembly Bill 5(AB5). The law, which took effect last January 1, puts out an “ABC Test” which determines a hire if a contractor or employee. The attorney general Xavier Becerra on June filed a motion for preliminary injunction which would force the companies to reclassify their drivers. 

Uber commented saying that with the current health crisis, the lawsuit is in wrong timing. “The vast majority of California drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under state law.”

The Uber spokesperson added: “When 3 million Californians are without a job, our leaders should be focused on creating work, not trying to shut down an entire industry.”

Lyft has yet to release a comment.

The post Labor Commissioner of California Files Lawsuit vs Uber, Lyft Over Alleged Wage Theft first appeared on Tekrati and is written by Sam Arnold

Uber and Lyft may likely stop operating in California after a court ordered them to reclassify their drivers as “employees.”

Ride-hailing companies Uber and Lyft may suspend their operations in California. This came as the two firms are facing lawsuits over allegations of misclassification of their drivers.

Alleged ‘Misclassification’

Recently, the two tech companies were at the other end of a lawsuit filed by the state’s Labor Commissioner. This was over allegations of wage theft among the two companies by means of labeling their drivers as “independent contractors.” With this alleged misclassification, added benefits like paid rest periods are not granted. The Labor Commission’s Office received outcry from thousands of drivers claiming that they are not receiving fair wages.

Stopping Operations

Uber and Lyft said they may not operate in California after a judge ordered them to reclassify their drivers as employees.The companies said they would need to do an overhaul of their business to accommodate the reclassification.

This was in accordance with the state’s AB5 Law that took effect last January 1. Through an “ABC Test,” a worker can be classified either as a contractor or an employee. Both the companies are providing ridesharing services through their apps. The drivers that users can find on their services are not actually receiving usual employee benefits like health insurance.

The ‘Prop 22’

Now, they are relying on the voters to reverse the order that compels them to consider their drivers as “employees,” as prescribed in California’s AB5. CNBC explained that the ridesharing companies made the effort to introduce Proposition 22. It is a referendum that the state’s residents will vote on. It was reported that Uber and Lyft each spent tens of millions of dollars for this move.

Should this work in their favor, it would exempt the likes of their businesses, including food delivery services, from the AB5’s employee classification prescriptions in California. 

CNN published a comment from a former regulatory adviser to Uber, Bradley Tusk. He is also a venture capitalist. Tusk said: “If voters couldn’t get an Uber or a Lyft when they wanted it, that’s one thing. But the ridership is down so drastically, if this does prompt a political outcry, it’ll come from the drivers, not the riders.”

The post Uber, Lyft May Stop Operating in California After Refusing to Reclassify Drivers first appeared on Tekrati and is written by Sam Arnold

The ridesharing service company Uber can continue its operations in London. It comes as a judge reversed a previous decision from a regulator last year to ban the company for safety concerns. 

Regaining License

Uber receives a new license to continue its business in London, one important market for the company. Specifically, they obtained a new transportation license that allows them to operate for 18 months. 

Breaking News: Uber can continue operating in London, a judge ruled. It was a critical win for the ride-hailing giant in one of its most important global markets. https://t.co/mzplFkSBdp

— The New York Times (@nytimes) September 28, 2020

According to a deputy chief magistrate, the company had met a “fit and proper” standard. In a New York Times article, Judge Tan Ikram said that the ridesharing services firm addressed those concerns posed by regulators regarding passengers’ safety. Particularly, it includes banning unauthorized and uninsured drivers in their platform.

The judge ruled that although the company “does not have a perfect record,” Uber remains improving. He noted the satisfactory actions Uber had taken.

Access to the London Market

The American ridesharing company had its license in London removed twice. In 2017, the company lost its license in the city and then appealed the ruling. Later, they received permission to operate for 15 months. Last year, the company again lost its taxi license in London over safety concerns. Particularly, regulators noted Uber failed to maintain safety for passengers. The Transport for London said that Uber allowed unauthorized drivers to carry passengers through its platform. And the ban ends with the new ruling.

If Uber failed to regain its license in the city, it could lose access to one of its very crucial markets to operate in. The company claimed that millions of users in London take advantage of their app on a regular basis, CNN Business reports. Moreover, it said that they have about 45,000 drivers in the city.

Commitment to Safety?

With the new permission, Jamie Heywood said the decision recognizes the company’s commitment to safety. Heywood serves as the regional general manager for Uber in the Northern and Eastern Europe. “We will continue to work constructively with [Transport for London].”

However, in a CNN Business report, the general secretary of the Licensed Taxi Drivers’ Association, Steve McNamara, frowned upon the ruling. “Uber has demonstrated time and time again that it simply can’t be trusted to put the safety of Londoners, its drivers, and other road users above profit. Sadly, it seems that Uber is too big to regulate effectively, but too big to fail,” McNamara stated.

The post UK Judge Allows Uber to Continue Operations in London first appeared on Tekrati and is written by Irene Hawkins

The Russian multi-corporation tech firm Yandex came to terms with American ridesharing company Uber to spin-off the self-driving vehicle unit. The two companies previously partnered to launch a joint venture related to ridesharing and food delivery. The autonomous division would be spun-off from this joint venture.

The New Yandex SDG

The move does not mean that the two companies are splitting. Per the press release, Yandex will control a majority for the new company called “Yandex SDG” (Self-Driving Group). With the spin-off, 17 percent will belong to Yandex, and Uber will have 19 percent. In addition, employees and management will own the remaining 8 percent. 

Dmitry Polishchuk, CEO of the newly-spun-off Yandex SDG, stated that they have to do more work to apply self-driving technology, including ridesharing and e-commerce.

According to Yandex’s website, the transaction is expected to close in the third quarter of this year.

“The creation of a new company, with significant support from Yandex, positions us well for the further acceleration of our development,” Polishchuk stated. “And to achieve our goal of creating a safe and efficient transportation ecosystem.”

Yandex and Uber will spin off the self-driving car unit of their joint venture into a separate company https://t.co/2pmEAAVYTJ

— Bloomberg (@business) September 4, 2020

The Self-Driving Future

According to Yandex chief executive Arkady Volozh, “We are excited to increase our stake in this strategically important part of our business.”

“In just a short period of time, we have achieved breakthrough results in autonomous driving. We firmly believe in the future of autonomous driving,” Volozh said. 

The executive further noted that Yandex believes “in the future of autonomous mobility as a safe and cost-effective form of transportation with a vast addressable market.”

Investment in Yandex SDG

Moreover, Yandex is pouring $150 million for the new company, $100 million of which will be in equity and the remaining, a convertible loan. Tech Crunch quoted a spokesperson from Yandex saying that its motivation for the transaction is “two-fold.” 

“From the business standpoint, we are increasing our stake in a strategically important business with lots of potential for growth. From the technology standpoint, self-driving technology is quickly moving forward to become a viable business,” the company spokesperson stated.

The post Yandex Spins off Self-Driving Business from Joint Venture with Uber first appeared on Tekrati and is written by Sam Arnold

No one’s going out to eat anymore because of COVID-19, so food delivery apps have seen a sharp uptick in business. Take Uber, for example. Since everybody’s ordering food online now, Uber Eats has grown bigger than Uber’s taxi service. Despite this rise, Uber still suffered losses this year.

Uber Eats Keeps Growing

Tech Crunch reports that Uber Eats has now become Uber’s biggest service in terms of adjusted net revenue. Nobody’s going to restaurants anymore. Because of this fact, Uber switched up business strategies.

In the report, Tech Crunch adds that Uber Eats is earning more gross dollars than Uber’s ride-hailing service. The pandemic has forced Uber to focus on delivering food instead of driving people around.

However, Uber relies on its two main businesses to overcome the challenge of COVID-19.

Uber's delivery business is now larger than ride-hailing https://t.co/1Xh9xFDRIM by @kirstenkorosec and @alex

— TechCrunch (@TechCrunch) August 6, 2020

Uber Suffers Losses

Uber has suffered a net loss of $1.78 billion in the second quarter of 2020. In 2019, the company posted a loss of $5.24 billion. 

In the second quarter, Uber still managed to earn more revenue than the $2.18 billion expected by investors. 

During after-hours trading, Uber’s share prices also dropped by around 4%. 

What’s Next for Uber

Uber CEO Dara Khosrowshahi expects his company’s ride-hailing service to rise again once governments allow people to travel. He also says that Uber Eats can help the company weather more lockdowns.

The post Uber Eats Grows Bigger as Uber Loses Billions first appeared on Tekrati and is written by Irene Hawkins