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.

Theranos’ investor pitches go on trial

Prosecutors in the Elizabeth Holmes fraud case are now highlighting allegations the company sought to mislead investors.

The fresh details of unproven claims made about the viability of Theranos' blood tests and efforts to conceal errors when demonstrating testing equipment added to the evidence against Holmes, who is accused of fraud in her role leading the company.

Photo: David Paul Morris/Bloomberg via Getty Images

The Theranos trial continued this week with testimony from Daniel Edlin, a former product manager at the blood-testing startup, and Shane Weber, a scientist from Pfizer. Their testimonies appeared to bolster the government's argument that Holmes intentionally defrauded investors and patients.

The fresh details about audacious and unproven claims made about the viability of Theranos' blood tests and efforts to conceal errors when demonstrating testing equipment added to the evidence against Holmes, who is accused of fraud in her role leading the company.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporting fellow at Protocol, based out of Los Angeles. Previously, she worked for Ernst & Young, where she researched and wrote about the future of work, emerging technologies and startups. She is a graduate of the University of Southern California, where she studied business and philosophy. She can be reached at acounts@protocol.com.

The way we work has fundamentally changed. COVID-19 upended business dealings and office work processes, putting into hyperdrive a move towards digital collaboration platforms that allow teams to streamline processes and communicate from anywhere. According to the International Data Corporation, the revenue for worldwide collaboration applications increased 32.9 percent from 2019 to 2020, reaching $22.6 billion; it's expected to become a $50.7 billion industry by 2025.

"While consumers and early adopter businesses had widely embraced collaborative applications prior to the pandemic, the market saw five years' worth of new users in the first six months of 2020," said Wayne Kurtzman, research director of social and collaboration at IDC. "This has cemented collaboration, at least to some extent, for every business, large and small."

Keep Reading Show less
Kate Silver

Kate Silver is an award-winning reporter and editor with 15-plus years of journalism experience. Based in Chicago, she specializes in feature and business reporting. Kate's reporting has appeared in the Washington Post, The Chicago Tribune, The Atlantic's CityLab, Atlas Obscura, The Telegraph and many other outlets.

Protocol | Policy

8 takeaways from states’ new filing against Google

New details have been unsealed in the states' antitrust suit against Google for anticompetitive behavior in the ads market.

Google is facing complaints by government competition enforcers on several fronts.

Photo: Drew Angerer/Getty Images

Up to 22%: That's the fee Google charges publishers for sales on its online ad exchanges, according to newly unredacted details in a complaint by several state attorneys general.

The figure is just one of the many details that a court allowed the states to unveil Friday. Many had more or less remained secrets inside Google and the online publishing industry, even through prior legal complaints and eager public interest.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Protocol | Workplace

This tech founder uses a converted Sprinter van as an office on wheels

The CEO of productivity startup Rock likes to work on the road. Here's how he does it — starting with three different WiFi hotspots.

Kenzo Fong, founder and CEO of the 20-person productivity software startup Rock, has been working out of his converted Mercedes-Benz Sprinter van since the pandemic began.

Photo: Kenzo Fong/Rock

Plenty of techies have started companies in garages. Try running a startup from a van.

In San Francisco, one software company founder has been using a converted Mercedes-Benz Sprinter van — picture an Amazon delivery vehicle — as a mobile office.

Keep Reading Show less
Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.
Protocol | Policy

Most Americans want AI regulation — and they want it yesterday

In a poll, people said they wanted to see artificial intelligence technologies develop in the U.S. — alongside rules governing their use.

U.S. lawmakers have only just begun the long process of regulating the use of AI.

Photo: Louis Velazquez/Unsplash

Nearly two-thirds of Americans want the U.S to regulate the development and use of artificial intelligence in the next year or sooner — with half saying that regulation should have begun yesterday, according to a Morning Consult poll. Another 13% say that regulation should start in the next year.

"You can thread this together," Austin Carson, founder of new nonprofit group SeedAI and former government relations lead for Nvidia, said in an email. "Half or more Americans want to address all of these things, split pretty evenly along ideological lines."

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

ai
Latest Stories