Uber and Lyft Facing Employee Status Shift After Court Ruling
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With the upcoming election, this issue places significant emphasis on California’s Proposition 22. In brief, companies operating within the gig economy, such as Uber, Lyft, and DoorDash, are seeking to maintain the classification of their drivers and delivery personnel as independent contractors, and have invested substantial financial resources in this ballot measure. This week brought forth Prop 22-related legal challenges and filings, as well as a ruling from an appellate court requiring Uber and Lyft to reclassify their drivers. We also gained insights from gig workers representing differing viewpoints regarding their preference for independent contractor status.
Additionally, we will examine SoftBank’s initial investment from its Diversity & Inclusion fund, Pinterest’s appointment of a new African American board member, and other relevant news. Let's proceed.
Labor Struggles
Court mandates Uber and Lyft to categorize drivers as employees
However, a significant caveat exists. Uber and Lyft are anticipated to challenge this ruling, and its ultimate impact remains contingent upon the outcome of Proposition 22. With Election Day approaching in just a few weeks, the decision is currently subject to a thirty-day waiting period following the issuance of the remittitur, which has not yet occurred.
Throughout the legal proceedings, Uber and Lyft maintained that reclassifying drivers as employees would inflict substantial and irreversible damage on their businesses. The judge’s ruling dismissed these concerns, stating that neither company would experience any “serious or irreparable harm” by adhering to the law, and that any financial difficulties would not constitute “irreparable harm.”
Furthermore, the judge determined that the preliminary injunction would not impede Uber and Lyft’s ability to offer drivers flexibility and independence. The judge also noted that Uber and Lyft have had ample opportunity to transition drivers from independent contractor status to employment, considering that the pivotal case influencing the passage of AB 5 – the gig worker legislation that initiated this lawsuit – was resolved in 2018.
Amazon personnel demonstrate for voting leave
In the lead-up to Election Day, Amazon staff members staged a protest at the company’s Seattle headquarters, advocating for paid time off to vote. In a communication to GeekWire, Amazon indicated that employees lacking sufficient time off could request additional, excused leave.
“The amount of hours and compensation provided to employees will vary based on state regulations,” a company representative stated.
According to GeekWire, Amazon instructed managers to approve PTO requests for voting.
Tech firms extending paid time off to employees for Election Day encompass Salesforce, Apple (hourly staff receive four hours), Facebook, Twitter, Uber, and others.
Campaign against Prop 22 lodges complaint with USPS regarding Prop 22 supporters
Those opposing California’s Proposition 22 submitted a formal complaint this week to the United States Postal Service. The No on 22 campaign contends that the Yes side does not qualify for nonprofit postal rates and is requesting that USPS revoke their permit.
Utilizing nonprofit status for campaign mailings significantly reduces costs. For instance, distributing between 1 – 200,000 small mailers typically costs $0.302 per piece. As a nonprofit, this cost is reduced to $0.226 per piece, as per USPS data. The Yes on 22 campaign has affirmed its formation as a nonprofit organization under IRS section 501(c)(4), which applies to social welfare organizations. However, the No on 22 side asserts that USPS made an error in approving the Yes on 22 campaign.
In a statement to TC, Yes on 22 spokesperson Geoff Vetter explained, “As a 501(c)(4) organization, Yes on 22 is entitled to the appropriate nonprofit postage rates with the USPS, which we applied for and were granted by the U.S. Postmaster.”
Uber confronts lawsuit alleging coercion regarding Prop 22
Uber is currently facing a class-action lawsuit concerning Proposition 22 that claims the company is unlawfully pressuring its drivers to endorse the ballot measure aimed at maintaining workers’ classification as independent contractors. The lawsuit was initiated by two Uber drivers, Benjamin Valdez and Hector Castellanos, alongside two California nonprofit organizations, Worksafe and Chinese Progressive Association.
The plaintiffs allege that Uber has been encouraging its drivers and delivery personnel to support Prop 22 through the company’s driver-scheduling application.
“This is a baseless lawsuit, lacking merit, and filed solely to attract media attention, disregarding the facts,” Uber spokesperson Matt Kallman stated in a communication to TechCrunch. “It cannot overshadow the reality: that the overwhelming majority of drivers support Prop 22, and have done so for months, because they recognize it will enhance their working conditions and safeguard their preferred work arrangement.”
Shipt personnel demonstrate outside Target and Shipt facilities
Shipt shoppers proceeded with their planned demonstrations this week, staging actions at Target’s headquarters in Minneapolis and Shipt’s headquarters in Birmingham, Alabama.
Prior to the protests, Shipt shopper and organizer with Gig Workers Collective Willy Solis shared with me that his objective was to raise awareness about the new pay structure Shipt had begun implementing and how shoppers “are receiving reduced compensation for increased effort.”
https://twitter.com/hashtagmolotov/status/1318452223240667136
Gig workers express opinions for and against Prop 22
TC reintroduced the Mixtape podcast, and as part of this, Henry Pickavet and I interviewed Vanessa Bain, an Instacart shopper who opposes Prop 22, and Doug Mead, a gig worker who supports Prop 22. The entire episode is recommended listening, but here are some notable excerpts. First, Bain:
“If all it requires is relocating the hiring process and managerial oversight into an application on a mobile phone to rewrite labor laws, every company globally will adopt this practice. Unfortunately, the stakes extend far beyond Uber and Lyft, ride-sharing, grocery delivery, and the fulfillment of DoorDash orders. The very future of labor is at risk.”
Next, Mead:
“The core issue is the government’s intention to eliminate an individual’s control over their desired compensation. This, to me, is illogical,” Mead explained. “I should have the autonomy to determine how I want to be compensated and by whom.”
The complete episode can be accessed here.
Stay Woke
SoftBank makes an investment in Vitable Health through its D&I fund
SoftBank’s $100 million Opportunity Fund, established in June to support founders of color, has made its initial investment in Vitable Health. This company is dedicated to delivering healthcare coverage to communities with limited resources and lower incomes.
The $1.6 million funding round was spearheaded by SoftBank’s Opportunity Fund, with additional contributions from Y Combinator, DNA Capital, Commerce Ventures, MSA Capital, Coughdrop Capital, and several individual investors.
Pinterest adds another Black member to its board
Pinterest has appointed Salaam Coleman Smith as its second Black female board director. This appointment follows closely after Andrea Wishom was named Pinterest’s first Black board member a few months prior.
Ms. Smith previously held the position of EVP of Programming and Strategy at Disney’s ABC Family and Freeform, and also served as president of Comcast NBCUniversal’s Style Media.
The following provides a current overview of Black representation on the boards of leading technology companies.
Netflix is initiating a technology training program for students at HBCUs
Netflix has announced a virtual Boot Camp designed for students attending Historically Black Colleges and Universities (HBCUs), specifically those at Norfolk State University in Virginia. The program is available to current students and alumni from the graduating classes of 2019 and 2020.
Working in collaboration with the online learning platform 2U, the boot camp will provide instruction in Java engineering, UX/UI design, and data science to 130 students over a 16-week period, beginning in January. Furthermore, professionals from Netflix’s data science, engineering, and design divisions will act as mentors for the participants.
