Uber, Lyft, DoorDash and other gig companies said California’s Prop 22 would create opportunity for workers of color. A new study says it ‘legalized racial subordination.’

uber lyft protest drivers LOS ANGELES, CALIFORNIA - APRIL 16: A protestor displays a sign as Uber and Lyft drivers with Rideshare Drivers United and the
 Transport Workers Union of America prepare to conduct a ‘caravan protest’ outside the California Labor Commissioner’s office amidst the coronavirus pandemic on April 16, 2020 in Los Angeles, California. The drivers called for California to enforce the AB 5 law so that they may qualify for unemployment insurance as the spread of COVID-19 continues. Drivers also called for receiving back wages they say they are owed. (Photo by Mario Tama/Getty Images)
Drivers in California sued Uber and Lyft, claiming the companies owe them $630 million in back wages.

  • Gig companies said labor law exemptions would create better opportunities for workers of color.
  • Instead, California’s Prop 22 “legalized racial subordination,” a new research paper argues.
  • The law worked like 1930s “wage codes” that paid workers in mostly minority industries less.
  • See more stories on Insider’s business page.

Last year, Uber, Lyft, DoorDash, Instacart, and Uber-owned Postmates spent a record $203 million to convince California voters to pass Proposition 22, a company-authored ballot measure that let them avoid paying for new benefits the state had recently extended to their workers.

The companies said Prop 22, which created a new class of workers subject to different labor laws, would be a boon for workers of color and immigrants, who make up the vast majority of their drivers and delivery people.

But a forthcoming research paper by UC Hastings law professor and gig economy expert Veena Dubal argues that, despite the companies’ promises that Prop 22 would help achieve racial and economic justice for their workers, the law has had the exact opposite effect.

The new category of workers created by Prop 22, Dubal wrote, “is best understood as a new form of legalized racial subordination-lower wages and benefits for a people of color and immigrant workforce.”

Ride-hailing and food-delivery companies have pitched this hybrid employment status as an innovative “third way” to classify workers that offers the independence of being a contractor and some of the benefits that come with being an employee.

According to Dubal, such proposals are hardly innovative, and in fact look strikingly like discriminatory “wage codes” passed in the 1930s at the request of racist industrialists and plantation owners.

While those laws weren’t explicitly racist, their effects were. By exempting employers with mostly Black workforces, wage codes denied those workers minimum wage, workers’ compensation, unemployment insurance, and unionization rights enjoyed by workers in majority white industries.

Dubal argues that Prop 22 is a recycled version of those racialized wage codes, and that this time around, companies used social justice arguments to persuade people it would have the opposite result.

Uber, Lyft, DoorDash, Instacart, and Postmates did not respond to requests for comment on this story.

“There is a long history of systemic racism in traditional hiring practices, which is one of the reasons app-based work and the open access to earning opportunities it provides is valued by so many Californians,” Geoff Vetter, a spokesperson for the Protect App-Based Drivers & Services Coalition, told Insider. (PADS, formerly called Yes on 22, was created and funded by the above companies to generate public support for Prop 22).

Co-opting racial justice language

Last August, Uber plastered 13 major cities with billboards that read: “If you tolerate racism, delete Uber,” timed to its sponsorship of a march commemorating the 1963 March on Washington, where Martin Luther King Jr. gave his famous “I Have a Dream” speech.

In September, Lyft aired a commercial featuring Maya Angelou reading her poem “On the Pulse of Morning” to announce its plan to provide subsidized rides to underserved communities during the pandemic.

To gin up support for Prop 22 in California, the Yes on 22 campaign touted endorsements from civil rights groups and sent mailers to voters implying that progressives like Sen. Bernie Sanders supported the ballot measure.

“NAACP California, California State National Action Network, Hispanic 100, Si Se Puede Foundation, Black Women Organized for Political Action, and other trusted social justice leaders and civil rights organizations” supported Prop 22, Vetter told Insider.

The PR campaigns came amid a summer of uprising against police brutality and systemic racism, which in turn put pressure on companies to address racism within their own walls.

But the campaigns faced swift backlash from drivers and driver advocates who called them “gaslighting” and hypocritical.

The “delete Uber” language originally came from angry customers boycotting Uber for sending drivers to JFK airport during a taxi driver strike in protest of Donald Trump’s Muslim travel ban. Lyft cherry-picked Angelou’s words, omitting her lines critiquing exploitative labor practices (while research shows that Uber and Lyft reduce revenue for public transit, on which communities of color disproportionately rely).

The head of the California NAACP chapter stepped down amid revelations that the Yes on 22 paid her consulting firm $95,000. Sen. Sanders and other progressives denounced the both mailers and Prop 22. And Yes on 22 reportedly harassed Dubal, a woman of color, on social media over her opposition to Prop 22 (Vetter told Slate that Yes on 22 condemned the harassment).

But the bigger hypocrisy, Dubal argues, is that the companies were “highlighting particular forms of racial subjugation, while ignoring and profiting from others” – namely, the racial subjugation of their own workers.

“New racial wage code”

During the Great Depression, Congress established the first federal minimum wage law, social security benefits, and union rights in a major win for workers.

But “racist demands” from industrialists and plantation owners led Congress to exclude agricultural and domestic workers – the majority of whom were Black – from those laws, subjecting them to seperate and unequal workplace conditions, according to Dubal.

Those exemptions let companies pay primarily Black workforces 20% to 40% less than the minimum wage, Dubal found, citing research by historian Donna Hamilton, “undermining the economic stability of Black communities for decades to come.”

Prop 22 isn’t much different, Dubal argues, but this time, companies are masking their arguments in racial justice arguments and confusing legalese rather than openly racist terms.

In 2019, California passed AB-5, extending long-standing minimum wage, unemployment insurance, workers’ compensation, and other protections to gig workers. After regulators and courts rejected claims by Uber and Lyft that AB-5 didn’t apply to them, the industry banded together to pass Prop 22, touting it as a boon to workers.

“Prop 22 guaranteed all drivers would earn at least 120% of minimum wage plus 30 cents per mile compensation toward expenses,” Vetter told Insider, pointing to claims by Uber, DoorDash, and Instacart that drivers are making more under the new law. (Companies’ earnings claims are difficult to evaluate because they refuse to share detailed pay data with the media, regulators, and independent researchers).

Dubal argues the bigger issue is that Prop 22 provides far less than what those workers should already have been receiving as employees under AB-5.

Under Prop 22, companies can: pay workers for only some of the hours they work; refuse to offer overtime pay, sick leave, family leave, and paid time off; cover just a fraction of healthcare costs; reimburse vehicle costs at barely 50% of the rate guaranteed to employees; provide bare-bones insurance that can leave drivers hanging out to dry; and avoid paying into unemployment and disability programs, shifting the burden to taxpayers.

These “second-class” labor protections, as Dubal describes them, become more problematic given the demographics of the workers subject to them. Lyft estimates that 69% of its drivers are people of color; one study estimates that, among all ride-hailing and food delivery workers in San Francisco, 78% are people of color and 56% are immigrants.

Ultimately, with Prop 22, Dubal wrote, Uber, Lyft, DoorDash, Instacart, and Postmates “obscured the way in which the law created a new racial wage code, claiming instead to offer economic opportunities for people of color and concealing the exploitative conditions endemic to those ‘opportunities.'”

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Most executives say they want more contract and temp workers. A majority of those workers say that’s not good enough.

Prop 22 protest
Jorge Vargas joins other rideshare drivers in a demonstration in November 2020 urging voters to vote reject Proposition 22, a ballot measure that exempted companies like Uber and DoorDash from California’s AB-5 law.

  • Contract workers “overwhelmingly” want to be permanent employees, according to a new McKinsey-Ipsos survey.
  • But executives say they plan to rely more heavily on contract labor, McKinsey previously found.
  • The findings reveal a huge divide between workers’ wants and those of their bosses.
  • See more stories on Insider’s business page.

Around a quarter of Americans say they work mostly in the gig economy, and 62% of those workers say that they’d rather not, according to a survey published Wednesday by McKinsey and Ipsos.

“Gig workers would overwhelmingly prefer permanent employment,” the survey found.

That preference is even stronger among immigrants and workers of color, who disproportionately make up the gig workforce.

Among those groups, 72% of Hispanic and Latino gig workers, 71% of Asian American gig workers, and 68% of Black gig workers said they’d rather be permanent or non-contract employees, as did 76% and 73% of first- and second-generation immigrants, respectively.

McKinsey and Ipsos surveyed 25,000 Americans over the spring of 2021, and 27% percent of those surveyed said their primary job at the time was as a contract, freelance, or temporary work.

But their resounding preference for the security, benefits, and legal protections that come with employee status could encounter some tough resistance: their bosses.

Globally, 70% of executives – mostly from large US firms – said they plan to ramp up their reliance on contract and temporary workers, according to a McKinsey study from September.

Corporate America has aggressively opposed efforts to reclassify contractors as employees, in many cases arguing that workers prefer the flexibility that gig work claim to offer. But McKinsey’s latest findings suggest that executives – often citing surveys that their own companies funded – may not be as in touch with workers’ needs and wants.

While companies like Uber, Lyft, DoorDash, Grubhub, Amazon, Facebook, and Google have played leading roles in familiarizing American consumers with the gig-based business model, they’re far from the only ones who have leveraged contractors to skirt labor laws and minimize their costs. (Insider has contacted the above companies for comment, and will update this story if they respond.)

Executives in the lodging, food service, healthcare, and social assistance sectors, are especially keen on relying more heavily on contractors, according to McKinsey.

As Insider previously reported, the COVID-19 pandemic exposed how the tech industry’s push to build their empires on the backs of contractors has failed American workers, who abruptly found themselves without healthcare, sick pay, workers’ compensation, and other benefits guaranteed to employees.

Read more: Biden could be the most pro-labor president in decades. These 81 government power players will take a major role in shaping policy during his administration.

That model also hit taxpayers hard, as they subsidized unemployment benefits for contractors laid off by multibillion-dollar corporations that, despite record profits, hadn’t contributed a dime to those funds on behalf of their workers. Taxpayers coughed up $80 million in pandemic assistance for around 27,000 Uber and Lyft drivers who lost their incomes.

State and federal lawmakers are increasingly considering ways to secure better pay, working conditions, and legal protections for contractors, from California’s AB-5 to recent talks between unions and app companies in New York, though experts say more wide-reaching labor law reforms are needed.

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Gorillas, the ultra-fast delivery operator from Germany, plans to make its US debut in New York City this month

Gorillas warehouse
Gorillas fulfills grocery orders from a network of “dark” warehouses. The German startup has announced plans to enter the US market.

  • The on-demand grocery delivery startup will launch its service in Brooklyn using bike couriers.
  • Goods such as fresh produce, milk, and cat litter will be delivered in under 10 minutes.
  • ‘We are in love with the model,’ CEO Kağan Sümer told Insider in an exclusive interview.
  • See more stories on Insider’s business page.

The red hot on-demand grocery delivery war is about to intensify with the US debut of European startup Gorillas this week.

The ultra-fast delivery operator based in Germany told Insider that it plans to kickstart its 10-minute delivery service in select Brooklyn neighborhoods starting May 30. They’ll be competing directly with Fridge No More, a startup that delivers groceries within 15 minutes to parts of the New York City borough.

Read More: NYC’s Fridge No More specializes in 15-minute grocery deliveries using scooters.

Unlike grocery-delivery operators Instacart, DoorDash, and Uber, Gorillas does not rely on gig workers to fulfill deliveries. Instead, it employs a fleet of bike couriers who deliver goods from strategically located “dark” warehouses.

The delivery fee in the US will cost $1.80 with no minimum purchase required. Consumers can order one item or a basket of goods. However, there are some weight limitations as groceries are delivered by bike. Each warehouse will hold about 2,000 to 2,500 items ranging from fresh produce and milk to cat litter.

“We are in love with the model,” CEO Kağan Sümer told Insider in an exclusive interview. “So if this model is executed the right way, it is going to be transformative in a big way.”

Gorillas
Gorillas employs bike couriers to delivery goods.

Depending on the neighborhood, Gorillas’ delivery choices will also include artisan foods from local businesses. In Brooklyn, Gorillas will carry bagels, ice cream, and chocolate truffles from Black Seed Bagel, OddFellows Ice Cream Co., and Fine and Raw, respectively.

On US launch day, the warehouses in Brooklyn will support the following neighborhoods: Bushwick, East Williamsburg, and parts of Downtown Brooklyn including Boerum Hill, Cobble Hill, and Carroll Gardens.

In the coming weeks, Gorillas said it plans to “expand quickly” to other parts of Brooklyn, as well as neighborhoods in Manhattan and Queens.

“We are also eyeing other urban markets and you can expect to see Gorillas launch in other East, Central and West Coast cities by the end of the summer,” a company spokesperson told Insider.

Fridge No More also announced plans to expand beyond Brooklyn after its $15 million Series A funding round earlier this year.

Gorillas, which launched in June 2020, has more than 80 warehouses in 25 cities in Germany, the Netherlands, UK, and France. It plans to expand to Italy later this month, as well.

In Europe, Gorillas competes with Berlin-based Flink, Turkish delivery service Getir, and 10-minute delivery service Dija. Gorillas raised $290 million in a Series B round in March led by hedge fund Coatue.

A highly contested US grocery market

Gorillas enters a crowded US space where multiple e-commerce players like Instacart and startups like Gopuff are competing for market share. These services erupted over the past year as consumer adoption of online ordering accelerated during the pandemic.

Online grocery sales grew 54% in 2020, reaching nearly $96 billion, according to eMarketer. The segment is projected to surpass $100 billion in spending this year.

Instacart is dominating the space and saw huge growth during the pandemic, according to market research firm 1010data. The firm, which analyzes consumer behavior, said Instacart saw a 323% surge in year-over-year sales in 2020.

Read More: Here are the 13 companies competing for dominance of the $100 billion grocery industry.

Still, with business restrictions easing in the US, the meteoric growth of online grocery orders appears to be slowing.

Edison Trends, which tracks online grocery transactions, said e-commerce grocery spending was up 88% in February 2021, compared to February 2020. In March, overall spending increased by just 37%.

This, however, doesn’t concern Sümer. While some consumers will return to “traditional” in-store shopping, Gorillas is betting more people will stick to online grocery shopping because they’ve grown addicted to fast delivery services.

“These people adapted, tasted this convenience, so they will want to keep on,” he said.

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Uber, DoorDash and other gig-economy stocks fall after US labor secretary says most gig workers should be classified as employees

uber ceo dara khosrowshahi profile 2x1
Uber CEO Dara Khosrowshahi.

  • US labor secretary Marty Walsh said “in a lot of cases gig workers should be classified as employees” in an interview with Reuters on Thursday.
  • Uber, Lyft, Doordash, and Grubhub, along with other firms depending on the “gig economy” labor all fell after the news broke.
  • Walsh said gig workers should have “all of the things that an average employee in America can access,” per Reuters.
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Shares of rideshare and delivery companies including Uber, Lyft, Doordash, and Grubhub all fell on Thursday after reports out of Reuters said US labor secretary Marty Walsh believes most gig workers should be classified as employees.

“We are looking at it but in a lot of cases gig workers should be classified as employees,” Walsh said in his interview with Reuters on Thursday.

“These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America… but we also want to make sure that success trickles down to the worker,” Walsh added.

The US labor secretary also said that the Department of Labor will have conversations with companies that employ gig workers in the coming months to ensure they have access to “all of the things that an average employee in America can access,” Reuters reported.

Gig workers are independent contractors who enter into contracts with on-demand companies to provide services to clients.

The last decade has seen an explosion in the so-called “gig economy” with companies like Uber and Lyft fighting to maintain the independent contractor status of their workers.

In March, California voters approved a ballot measure that exempts companies that utilize the “gig economy” from having to treat workers as employees.

The measure freed companies like Uber and Lyft from a 2019 state law that entitled workers to overtime pay, sick leave, and unemployment benefits.

Now, these new comments from the US secretary of labor again call into question the longevity of the gig worker business model.

Walsh noted in his interview that if the federal government didn’t cover gig economy workers during the pandemic, they would “not only have lost their job, but they wouldn’t have had any unemployment benefits to keep their family moving forward.”

Gig workers received a reported $80 million in benefits from the US government during the pandemic, according to an analysis of government data by The Washington Post.

Shares of Uber and Lyft fell as much as 8.34% and 13.67% on Thursday after the news broke, while DoorDash and Grubhub saw their shares fall as much as 11.05% and 4%, respectively.

Read the original article on Business Insider

The New York Stock Exchange is minting crypto art commemorating the first trades of 6 companies that recently went public

NYSE NFT
  • The New York Stock Exchange announced on Monday that it had minted six NFTs.
  • The NFTs represent the first trades of several companies that recently went public on the NYSE.
  • The crypto art pieces are not currently up for sale, but will be gifted to the companies, a source told Insider.
  • See more stories on Insider’s business page.

The New York Stock Exchange (NYSE) announced on Monday that it was getting into crypto art by minting its own digital collectibles designed to commemorate the first public trade of six stocks.

The NYSE is not only the largest stock exchange in the world, but it is also the first to get into crypto art. The collectibles will represent the first trades of Spotify, Snowflake, Unity, DoorDash, Roblox, and Coupang. NYSE said it plans to launch more first-trade collectibles in the future.

The digital collectibles will operate as non-fungible tokens or NFTs. NFTs are digital collectible tokens that allow the buyer to connect their name directly to the creator via the blockchain.

NFTs have boomed in recent months. In February, one crypto art piece sold for nearly $70 million. Since, celebrities and public figures from Twitter CEO Jack Dorsey to singer Shawn Mendes have gotten in on the trend, which has brought in millions for opportunistic creators and resellers of the pieces.

Read more: NFTs, or non-fungible tokens, are the hottest thing in entertainment, art, and crypto right now. Here’s a simple explanation of the craze.

While the NYSE appears to be getting in on the NFT trend, the exchange’s tokens are not up for sale. The NFTs are housed on Crypto.com, a less than month-old NFT trading platform that has already launched crypto art sales for several celebrities including Snoop Dogg and Boy George.

A source familiar with the matter told Insider NYSE does not plan to sell its NFTs, but has already gifted them to the respective companies. The NYSE also plans to mint future NFTs and gift those to the memorialized companies as well, according to the source.

The NFTs for each company feature a short clip containing information about the first trade, including the sale price, date, and a string of numbers representing the first trade quote code.

Stacey Cunningham, the President of NYSE, said the NFTs will help commemorate the very first moments a company joins NYSE by highlighting the data from a company’s very first trade.

“NYSE technology is processing over 350 billion order, quote and trade messages across our markets on our busiest days, more than any other exchange in the world,” Cunningham said in a LinkedIn post. “Only one of those messages marks the NYSE First Trade: the exact moment a company became public, creating an opportunity for others to share in their success.”

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Consumer groups ask the FDA to mandate nutritional information on DoorDash and other online delivery platforms

nutrition label
  • The American Heart Association and other groups are asking for nutrition labels on ordering apps.
  • The FDA says restaurants that fall under current labeling rules already list the information online.
  • DoorDash says restaurants can add the information to menus in the app.
  • See more stories on Insider’s business page.

Scientists and consumers groups sent a letter to the Food and Drug Administration (FDA) asking it to require that third-party online ordering services provide nutritional information.

The letter, addressed to FDA director Dr. Susan Mayne, asks the agency to extend existing rules on labeling to platforms like DoorDash, Seamless, and Uber Eats. “Guidance should make clear that both chain restaurants and TPPs (third-party platforms) are responsible for complying with the nutrition labeling requirements,” the letter says.

Read more: We mapped out the ghost kitchens run by ex-Uber CEO Travis Kalanick’s CloudKitchen and competitor REEF Technology. See where the war for ghost kitchen dominance is heating up.

Current FDA labeling regulations apply to restaurants that have 20 or more locations, a spokesperson told Insider.

“FDA recognizes that the dining landscape has changed considerably since the menu labeling requirements were passed into law in 2010, especially with the rise of third-party websites and delivery apps to provide convenient options for ordering to dine at home,” a spokesperson told Insider by email.

“Though many third-party online ordering websites likely would not meet the definition of a covered establishment under our current requirements, and therefore would not be subject to menu labeling requirements, we encourage third-party websites and delivery apps to provide important nutrition information for the menu items offered on their platform. “

The FDA also says that many restaurants available for online include menus with nutritional information. “We encourage consumers to look directly on the restaurant or other covered establishment’s websites for nutrition information for their favorite menu items.”

This isn’t enough for the letter’s signers, which include the American Heart Association, Consumer Reports, Center for Science in the Public Interest, and others.

“For the menu labeling requirements established under the ACA to have their intended impact, consumers must have easy access to the labeled information,” the letter says. It argues that consumers need access to nutritional information at the point of ordering, and many of the benefits of labeling are lost if access involves extra steps.

DoorDash says restaurants can add nutritional information in the description field of menu items.

“We work hard to enable customers to have access to the most up-to-date and accurate menu information, which is why we provide partners on our platform with the ability to enter and edit menu information directly, including nutritional information. We welcome the opportunity to engage with policymakers and stakeholders on this and other important issues impacting our industry.”

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A Pennsylvania prosecutor making $60 per hour got demoted because of his DoorDash side gig – where drivers make $17 per hour

GettyImages 1293837008 NEW YORK, NEW YORK - DECEMBER 30: A door-dash delivery driver waits near a restaurant on December 30, 2020 in New York City. The pandemic continues to burden restaurants and bars as businesses struggle to thrive with evolving government restrictions and social distancing plans which impact keeping businesses open yet challenge profitability. (Photo by NEW YORK, NEW YORK - DECEMBER 30: A door-dash delivery driver waits near a restaurant on December 30, 2020 in New York City. The pandemic continues to burden restaurants and bars as businesses struggle to thrive with evolving government restrictions and social distancing plans which impact keeping businesses open yet challenge profitability. (Photo by Alexi Rosenfeld/Getty Images))
  • A Pennsylvania prosecutor was demoted for delivering food for DoorDash during his work hours.
  • His boss called it “indefensible, thoughtless, selfish, and so stupid.”
  • The prosecutor, Gregg Shore, told KYW Radio that his reasons for working for DoorDash were personal.
  • See more stories on Insider’s business page.

District attorneys typically serve citizens by building legal cases against people accused of crimes, but one prosecutor in Bucks County, Pennsylvania, got demoted this week for serving residents food – as a DoorDash delivery driver.

Gregg Shore, who had been second-in-command at the Bucks County district attorney’s office, got caught driving for the food delivery service during hours he was supposed to be doing his job as a prosecutor, KYW Radio reported Thursday.

In 2019, Shore earned $125,435 – roughly $60 per hour – as first assistant district attorney, according to public records.

DoorDash CEO Tony Xu told The New York Times that delivery workers earned an average of just $17 per hour in 2018 – but the company doesn’t pay for the time workers spend waiting to claim orders, and some drivers say the base pay can be as little as $3 per hour.

Shore told KYW Radio that his reasons for working for DoorDash were personal and that he drove mostly at night.

“What he did was indefensible, thoughtless, selfish, and so stupid, it’s senseless,” Bucks County district attorney Matt Weintraub said in a press conference Thursday.

“I don’t know why he did this, only he has the answer, and I’ll admit to you that I’m very angry and I’m upset… this is the reason for his demotion,” he added.

Weintraub said Shore will be demoted to deputy district attorney, adding that while it would be “easier and politically expedient” to fire Shore, it “was not necessarily the right thing to do” given Shore’s otherwise positive track record.

Jennifer Schorn, who had been chief of the office’s trials and grand jury divisions, has been promoted to first assistant to fill Shore’s role, Weintraub said.

During the pandemic, the surge in demand for food delivery has been a boon for executives, early investors, and employees of companies like DoorDash, which opened at $182 per share – 78% above its asking price – during its IPO in December despite an unprofitable business model.

But delivery workers haven’t seen the same benefit, and have long complained about low pay, tough working conditions, and even wage theft – DoorDash paid $2.5 million to settle a lawsuit that accused the food delivery company of stealing drivers’ tips.

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A year into the pandemic, Uber and Lyft drivers say gig companies are still failing them. They blame Prop 22.

GettyImages 1218814557 NEW YORK, NY - APRIL 14: A driver pauses as city employees fill-up cars with take-away meals to be delivered to the elderly and those that can not leave their housing due to the coronavirus at a community center in Brooklyn on April 14, 2020 in New York City, United States. The National Guard joined other New York City city agencies in loading up taxi's, Uber's, Lyft's and other 'for hire' vehicles which have joined the effort in delivering meals across the city. New York has been the hardest hit city in the nation from the COVID-19 outbreak. (Photo by Spencer Platt/Getty Images)
Rideshare and food delivery drivers working for companies like DoorDash, Uber, and Instacart have complained the companies aren’t providing PPE or pay for the time it takes them to properly clean their vehicles.

  • Uber and Lyft rideshare and food delivery drivers plan to protest Wednesday at Uber’s headquarters.
  • They say the companies won’t provide PPE or pay them for the time it takes to clean their vehicles.
  • San Francisco supervisor Matt Haney plans to propose a law that would require companies to do both.
  • Visit the Business section of Insider for more stories.

Rideshare and food delivery drivers are planning to protest Wednesday outside Uber’s headquarters in San Francisco, California, over what they say is gig companies’ continued failure to protect them nearly a year into the COVID-19 pandemic.

Drivers for Lyft, Instacart, Uber, and Uber subsidiary Postmates said in a press release announcing the protest that the companies aren’t providing adequate PPE and have refused to pay them for the time it takes to clean their vehicles.

They said that Proposition 22 – an industry-backed law passed in California in November that classified rideshare and food delivery drivers as contractors, excluding them from certain labor protections and restricting the ability of local governments to regulate gig companies – is largely to blame.

“Eleven months into this pandemic and workers are still asking for the most basic life saving protections for themselves, their families and their communities,” Cherri Murphy, a Lyft driver and organizer with Gig Workers Rising, a co-organizer of the protest, said in a statement. 

“It’s really stressful – I’m always being timed when I’m driving for these companies and if I don’t get places quickly, I can be punished. It’s like the companies don’t care about making sure I have enough time to wash my hands, clean my car, and wipe down surfaces,” Lucas Chamberlain, Instacart driver and member of We Drive Progress, another group behind the protest, said in a statement.

Under Prop 22, drivers aren’t paid for the time they spend waiting for Uber or Lyft to find them a ride or delivery order or sanitizing their vehicles in between jobs. Some gig economy researchers have estimated that loophole could allow companies to pay drivers for just 67% of the hours they actually work. 

“Since the COVID-19 crisis began, Lyft has provided tens of thousands of face masks, cleaning supplies and in-car partitions to drivers at no cost to them, and continue to provide access to these supplies today. Our most active drivers also received a free safety kit, consisting of a reusable cloth face covering, sanitizer and disinfectant,” a Lyft spokesperson told Insider, adding that Lyft doesn’t profit off PPE.

Uber told Insider that it has allocated $50 million toward safety supplies for drivers and said it has provided 30 million masks and other cleaning supplies to drivers worldwide.

But while California law requires most companies to provide PPE and sick pay to their employees and to pay into the state’s unemployment insurance program, Prop 22 classified drivers as contractors, allowing gig companies to save far larger amounts by not having to cover those costs. Uber and Lyft drivers last year claimed they’re owed $630 million in back pay as a result of the misclassification. One study found that between 2014 and 2019, the two companies should have paid $413 million into California’s unemployment insurance fund.

Uber spokesperson Kayla Whaling told Insider the company “has tried to do everything we can to support [independent contractors] while they support our communities, including distributing PPE free of charge, providing financial assistance for those who were diagnosed with COVID-19, helping connect them to new work opportunities on Uber or elsewhere, and consolidating information to help them apply for PPP loans or federal unemployment assistance.”

Still, Uber hasn’t always delivered on those promises, and when it has, it’s often only done so following backlash from drivers, regulators, courts, or the media.

Insider reported last April that, despite Uber’s claims it would pay drivers who tested positive for COVID-19, the company had denied legitimate claims and even locked out drivers who requested sick pay.

In July, a federal judge in New York ruled that Uber and Lyft had delayed the state’s ability to pay drivers unemployment benefits because they had played “games” with its requests for earnings data.

Wednesday’s protest – which Gig Workers Rising and We Drive Progress said will include a socially distanced rally – comes as some lawmakers in California are already pushing for more accountability for gig companies who rely on rideshare and delivery drivers.

San Francisco supervisor Matt Haney said he plans to introduce legislation that would require companies like Uber and Lyft to provide PPE and pay drivers for time they spend cleaning their vehicles.

“In the midst of this devastating pandemic, workers have gone above and beyond to protect themselves and our communities by purchasing protective equipment and cleaning supplies and spending their personal time sanitizing their cars to save lives. It is outrageous that while delivery app corporations continue to rake in profits, workers are forced to shoulder these burdens while struggling to make ends meet,” Haney said in a statement.

Do you work at Uber, Lyft, or another food delivery or rideshare app company? We’d love to hear how your company is navigating challenges brought on by the pandemic. Contact this reporter using a non-work device via encrypted messaging app Signal (+1 503-319-3213), email (tsonnemaker@insider.com), or Twitter (@TylerSonnemaker ). We can keep sources anonymous. PR pitches by email only, please.

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Amazon-backed food delivery firm Deliveroo is now worth $7 billion after a $180 million pre-IPO funding round

Deliveroo CEO Will Shu
Deliveroo CEO Will Shu at President Macron’s tech summit in France in 2018. Shu said he was the only one who didn’t turn up in a suit.

  • Food delivery firm Deliveroo is now worth $7 billion after raising $180 million in fresh funding.
  • The Amazon-backed company is preparing to go public later in 2021.
  • Insider reported this week that UK-based Deliveroo could be valued at up to $13.6 billion when it floats, with one source pegging April for an IPO date.
  • Visit Business Insider’s homepage for more stories.

Amazon-backed food delivery firm Deliveroo is now valued above $7 billion after raising $180 million in fresh capital.

The new round was led by two of Deliveroo’s existing backers, Durable Capital Partners and Fidelity. Both are investors that put money into public as well as private firms.

UK-headquartered Deliveroo, which has experienced a boom in custom amid national lockdowns, also on Sunday confirmed plans for a stock market debut. The company, though run by American CEO Will Shu, is expected to list on London’s Stock Exchange.

Insider reported earlier this week that an IPO could value Deliveroo at £10 billion ($13.6 billion), and that the firm was potentially eyeing an April float.

That Durable Capital and Fidelity are upping their stakes now signals confidence in Deliveroo’s prospective share price and future growth. As one industry source put it: “Why buy in at $13 billion when you can buy in at $7 billion now?”

The gambit has worked before.

Both Durable Capital and Fidelity invested in Deliveroo’s US equivalent, DoorDash, around six months ahead of its December IPO at an approximately $16 billion valuation. On IPO, DoorDash topped a $32 billion valuation and its market cap now hovers around the $60 billion mark.

Deliveroo is based in the UK and competes with the likes of Uber Eats in Europe and parts of Asia. It does not currently operate in the US. It offers food, alcohol, and grocery deliveries on demand via an app and relies on a network of gig-economy cyclists and motorcyclists to ferry items to customers.

FILE PHOTO: A courier for food delivery service Deliveroo rides a bike in central Brussels, Belgium January 16, 2020. Picture taken January 16, 2020. REUTERS/ Yves Herman
A courier for food delivery service Deliveroo rides a bike in central Brussels

It was founded in 2013 by Shu, formerly an investment banker, and Greg Orlowski. Orlowski left in 2016, and Shu remains the CEO of the business.

An IPO would cap a rollercoaster year for the firm.

As is typical for high-growth, venture capital-backed firms, Deliveroo has been mostly loss-making to date. As the UK, its primary market, went into lockdown in the spring and restaurants shuttered, the firm warned it may collapse.

The situation was exacerbated by the UK’s competition regulator denying Deliveroo access to a large tranche of $575 million in funding, led by Amazon in 2019, on competition grounds. Deliveroo laid off about 300 staffers to reduce costs.

The regulator eventually cleared the funding in April, concluding there was no antitrust threat from Amazon’s involvement. Deliveroo’s business also began to improve as restaurants turned to delivery apps for revenue and consumers upped their takeaway orders, bored of home cooking.

Having initially warned of collapse, Deliveroo towards the end of the year said it became “operationally profitable” in 2020.

Its most recent publicly available financials showed increased revenue for 2019 of $1 billion, a gross profit margin of around 24%, and heavier year-on-year pre-tax losses of $393 million.

Got a tip on Deliveroo? Contact the reporter behind this story, Shona Ghosh, at sghosh@businessinsider.com, shonaghosh@protonmail.com, or +447412061471 for Signal.

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Airbnb and DoorDash’s post-IPO stock pops represent an ‘epic level of incompetency,’ says a former banker who led one of the world’s largest IPOs ever

Imran Khan
  • Imran Khan told CNBC on Tuesday that the recent post-IPO stock pops including those of Airbnb and DoorDash represent an  “epic level of incompetency” from the bankers who underwrote the stocks.
  • The former banker, who led Alibaba’s IPO in 2014, said that it’s the job of the bankers to understand the market and price the IPO’s correctly: “Why are you getting paid 5 to 6% if you can’t figure that out?” Khan asked.
  • “When the stock doubles for a very high large market cap company, clearly something didn’t work right here,” he added.
  • Shares of both Airbnb and DoorDash skyrocketed after their public debuts.
  • Visit the Business Insider homepage for more stories.

Imran Khan told CNBC on Tuesday that the recent post-IPO stock pops including those of Airbnb and DoorDash represent an “epic level of incompetency” from the bankers who underwrote the stocks. 

The former banker who led Alibaba’s IPO in 2014 said that it’s the bankers job to understand the market and price the IPO’s correctly. Right now, bankers could be doing a “much better job,” said Khan. Airbnb leaped 115% on its first day of trading-its IPO offering price was $68, but it went on to hit an intraday high of $165. Meanwhile, DoorDash opened at $182 on its public debut, 78% above its initial-public-offering price of $102.

Khan also said that DoorDash and Airbnb were not obscure companies, and that bankers should have known better.

“Why are you getting paid 5 to 6% if you can’t figure that out?” Khan asked.

Read more:A JPMorgan income fund manager shares 12 high-dividend stocks set to gain from a broad cyclical recovery – and unpacks the strategy he uses to beat 93% of his peers

“When the stock doubles for a very high large market cap company, clearly something didn’t work right here,” he added. 

Khan was also the chief strategy officer of Snapchat during its 2017 IPO. SNAP gained as much as 52% on its first day of public trading.

The Verishop founder and CEO said that these that these stock pops are causing investors to lose confidence in the IPO process. He doesn’t think the system of bringing companies to market is broken, but he said bankers could perform better.

“I think when the market gets really busy, a lot of the times bankers get really focused on chasing deals and client management, as opposed to doing their job,” said Khan. 

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