Power

A judge ordered Uber and Lyft to convert drivers to employees, but it's not a done deal

The coronavirus pandemic may actually be an ideal time for the companies to reset their business, judge Ethan Schulman argued.

An Uber and Lyft driver in California

A San Francisco judge said Uber and Lyft drivers should be employees.

Photo: Frederic J. Brown/AFP via Getty Images

A San Francisco judge ordered Uber and Lyft to convert their drivers to employees after a "prolonged and brazen refusal to copy with California law."

"Defendants may not evade legislative mandates merely because their businesses are so large that they affect the lives of many thousands of people," wrote San Francisco Superior Court judge Ethan Schulman.

The catch: Schulman stayed the injunction so it won't go into effect for 10 days, giving the companies a window to appeal the ruling. Both are expected to file an appeal and ask for another, longer stay pending that outcome, meaning there could be another protracted legal fight and delay before drivers actually become employees.

Regardless, it's still a symbolic win for the state of California and labor advocates who argue the drivers should be classified as employees. In May, California state attorney general Xavier Becerra sued Uber and Lyft for worker misclassification. In the ruling, the judge sided with Becerra and delivered an injunction forcing Lyft and Uber to comply with A.B. 5, the gig economy law that would convert many independent contractors to employees.

Meanwhile, in addition to their appeals, Uber and Lyft are backing a proposition in the November election that would exempt their businesses from A.B. 5. That may be another monumental test for this contractors vs. employees debate. "Drivers do not want to be employees, full stop," Lyft said in a statement. "We'll immediately appeal this ruling and continue to fight for their independence. Ultimately, we believe this issue will be decided by California voters and that they will side with drivers."

"The vast majority of drivers want to work independently, and we've already made significant changes to our app to ensure that remains the case under California law," Uber said.

While some drivers are against A.B. 5, the judge said that driver surveys did not factor into his decision. "A.B. 5 may be unpopular among some of the Defendants' drivers, but a lawsuit is not a popularity contest," he wrote.

An Uber analysis previously showed that the law could raise rider prices between 20% to 40% in San Francisco and San Diego, and as much as 80% to 100% in other California cities like Palm Springs or Fresno.

Both businesses have also seen demand plunge during the pandemic, but the judge viewed it as an ideal time for both companies to reset their business plans. (Uber disagreed, arguing that state leaders "should be focused on creating work, not trying to shut down an entire industry during an economic depression.")

"Now, when Defendants' business is at an all-time low, may be the best time (or the least worst time) for Defendants to change their business practices to conform to California law without causing widespread adverse effects on their drivers," he wrote.

While nothing changes overnight, the ruling is the most significant decision Uber and Lyft have faced yet. Going forward for the two companies, it's a matter of appealing long enough to find out the outcome of the November ballot measure.

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

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Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

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FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

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Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

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Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

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Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

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