04/11/2020
Nov 4, 2020
California Voters Spare Uber, Lyft From Classifying Drivers as EmployeesBut gig workers will still be offered minimum wages and certain other benefits.
Uber Technologies (NYSE:UBER) and Lyft(NASDAQ:LYFT) scored a big electoral victory in California after voters there overturned a state law that required the ride-hailing services to classify their drivers as employees.
Proposition 22 lets the companies continue classifying drivers as independent contractors, though it does provide a floor for wages and gives them certain benefits. The result on Tuesday was overwhelmingly in favor of the ballot measure with 58% of the vote.
Uber and Lyft were facing massive cost increases after the state adopted Assembly Bill 5 (AB5) last year, which had both companies considering stark alterations to their business model, such as going to a franchise model in the state. Existing fleet operators that already classify drivers as employees would license the ridesharing company's brand and hire the gig workers instead. Another possibility was shutting down operations in the state altogether as costs could rise as high as $500 million.
While the businesses were granted a temporary stay from having to implement the new regulations in August, a state appeals court ruled late last month Uber and Lyft had to begin reclassifying employees within 30 days. The companies were counting on voters to overturn the law, and the ruling has now been rendered moot.
The ballot measure was not only backed by the ridesharing companies, but also by third-party food delivery businesses like DoorDash, Instacart, and Postmates.
Analysts believe the victory in California will now allow Uber and Lyft to pursue similar protections at the federal level, with states including Illinois, Massachusetts, New Jersey, New York, and Washington considering laws similar to AB5.
Uber and Lyft contend they are at heart technology companies that operate an app, not transportation companies.
Uber License Ban in London Overturned by CourtA judge deems the ridesharing company is no longer a risk to passengers.
Sep 28, 2020
Uber Technologies (NYSE:UBER) won its court battle with London regulators after a judge today ruled the ridesharing company has sufficiently changed so that it is no longer a risk to the public and should have its license restored, CNBC reports.
London is Uber's largest European market with some 45,000 drivers and 3.5 million users of its app.
London's transportation regulator, Transport for London (TfL), first failed to renew Uber's license in 2017 and then stripped the ride-hailing app of its license altogether last year after the agency cited a "pattern of failures" that included allowing unauthorized drivers to gain access to the system and pick up at least 14,000 passengers.
TfL said it did not "have confidence that similar issues will not reoccur in the future, which has led it to conclude that the company is not fit and proper at this time."
After TfL failed to renew Uber's license, the ridesharing company was granted two extensions as it tried to rehabilitate its operations. When the regulator denied the renewal in November, Uber appealed, which allowed it to continue operating until a decision was rendered.
The judge hearing the appeal disagreed with TfL's characterization that the transportation company was a risk to public safety. Noting the numerous changes Uber has made to its operations, its improved communications with TfL, and the enhancements to its board's oversight, the judge wrote, "Despite their historical failings, I find them, now, to be a fit and proper person to hold a London [private hire vehicle] operator's licence."
