Uber’s Dara Khosrowshahi got into a Twitter spat with a rival food delivery CEO over plans to launch Uber Eats in Germany

Dara Khosrowshahi
  • Uber Eats is expanding into Germany, starting with Berlin, over the next few weeks.
  • The news prompted a Twitter spat between the CEOs of Uber and Just Eat Takeaway.
  • Uber’s head of delivery called Germany “strategically important” in the company’s push for profitability.
  • See more stories on Insider’s business page.

The CEO of Uber got into a feisty Twitter exchange on Wednesday with a food delivery service rival.

After announcing that Uber Eats will expand into Germany – and a 5.4% drop in the stock of market-leader Just Eat Takeaway – the Dutch company’s CEO, Jitse Groen, insinuated Uber’s strategy was to “depress our share price.”

“Advice: pay a little less attention to your short term stock price and more attention to your Tech and Ops,” Uber CEO Dara Khosrowshahi replied.

Groen shot back: “Start paying taxes, minimum wage and social security premiums before giving a founder advice on how he should run his business.”

Neither company immediately responded to a request for comment on the exchange.

Just Eat Takeaway enjoys a dominant position in Germany after it acquired a local business in 2018, according to Bloomberg. The company also beat out Uber in a recent deal with GrubHub that will give the European company a major slice of the US food delivery market.

Across Europe, 24 million people used Uber Eats to order meals last year, but Just Eat Takeaway’s dominance in Germany suggests there’s room for Uber to expand there. Uber says it will start offering deliveries in Berlin in the coming weeks.

Uber’s head of delivery told the Financial Times that Germany is a “strategically important country” in the company’s push to profitability, and that Just Eat Takeaway’s fees are “extraordinarily high.”

“That translates into consumers and merchants actually being quite desperate for additional options,” he said.

Part of the challenge for Uber will be adapting its delivery model to a fleet management system in order to comply with German labor laws. Under that system, Uber pays a partner company that hires and pays drivers, as opposed to the independent gig-worker model that is common in the US.

Uber, which has expanded from ride-hailing to food delivery, package delivery, and courier service, is scheduled to release its earnings on May 5.

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An Uber shareholder is demanding more transparency about the impact of the company’s lobbying efforts

Dara Khosrowshahi
  • The Teamsters General Fund, an Uber investor, wants the company to reveal more about its lobbying.
  • The fund urged Uber shareholders to vote for its proposal requiring an annual report from Uber.
  • It said Uber’s “highly innovative” but “controversial” lobbying could hurt its brand and business.
  • See more stories on Insider’s business page.

The International Brotherhood of Teamsters General Fund, an investor in Uber, sent a letter to other Uber shareholders Thursday urging them to vote for a proposal that would force the company to disclose more details each year about its lobbying efforts.

“Uber’s lobbying is not only substantial, geographically extensive and highly innovative, but is profoundly controversial and raises critical questions over the sustainability of the company’s business model,” Ken Hall, the fund’s general secretary-treasurer, wrote in the letter.

“It may be tempting to view Uber’s current disclosures as a good-faith effort to address concerns over the transparency of its lobbying activities; but this would be a mistake,” Hall added.

Uber investors will vote on the proposal – which would require Uber to publish an annual report disclosing its lobbying policies, how much it spent on direct, indirect, and grassroots lobbying, and which groups the money went to – during the company’s annual shareholder meeting on May 11.

Uber has urged investors to vote against the proposal, citing its “existing risk management practices and current high level of transparency and accountability around political and lobbying activities and expenditures.”

The ride-hailing company did not respond to a request for comment on this story.

Uber and other companies that depend heavily on cheap contract labor have ramped up their lobbying efforts over the past few years as federal and state regulators look to crack down on “gig” economy businesses that have for years operated in a regulatory gray area.

Uber spent a record $2.6 million lobbying the federal government in 2020, according to OpenSecrets. The company also contributed $30 million to a $200 million campaign to persuade California voters to pass Proposition 22, exempting it from a major state labor law, AB-5, and making Prop 22 the most heavily lobbied ballot measure in the state’s history.

A key aspect of that campaign was Uber’s indirect and “grassroots” lobbying through groups that helped the company broadcast its message to voters without telling them who the messenger was. In one case, an Uber-funded group sent mailers to California residents designed to trick them into believing progressive groups were supportive of Prop 22 (many prominent progressives actually opposed the measure).

In December, the Teamsters Union filed shareholder proposals at both Uber and Lyft, arguing both companies have failed to provide investors with sufficient information about the money they spend on lobbying – particularly grassroots lobbying, which is subject to less stringent disclosure requirements and often requires investors to dig through complicated and incomplete disclosures for each individual state.

The fund argued in its letter Thursday that Uber investors should push for more transparency so they can understand how much the company’s business model depends on its lobbying efforts being successful, and whether its reputation could suffer because of the positions it’s taking.

“Transparency is vital to understanding how Uber is navigating the acute reputational risks that come with lobbying around matters as emotive as wage theft and workers’ rights,” it wrote, adding: “But perhaps most crucially, disclosure is key to any evaluation of the long-term sustainability of a business model built around the heavy and controversial use of independent contractors.”

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Uber reveals March bookings were the highest in company history as ride-hailing rebounds from the pandemic

GettyImages 1176816141 (1) NEW YORK, NEW YORK - SEPTEMBER 24: Dara Khosrowshahi, CEO, UBER, speaks onstage during the 2019 Concordia Annual Summit - Day 2 at Grand Hyatt New York on September 24, 2019 in New York City. (Photo by Riccardo Savi/Getty Images for Concordia Summit)
Uber CEO Dara Khosrowshahi.

  • Uber saw record demand for its ride-hailing services in March, it said Monday
  • The company also hit another record for its delivery services.
  • Uber faces some difficulty finding drivers to meet post-pandemic demand for its services.
  • See more stories on Insider’s business page.

Uber on Monday revealed record bookings for the month of March 2021, fueled by an resurgence in travel as pandemic restrictions around the world slowly begin to slip away.

The company, which lost nearly $6.8 billion last year, said in a regulatory filing that March bookings were up 9% month-over-month to the highest level in company history. As a result, the company believes it can still become profitable by the end of 2021 on an adjusted EBITDA basis.

Uber’s ride-hailing service was hit hard by the pandemic last year as lockdowns diminished the need for trips, a rut that was in large part buttressed by an intense focus on food delivery. Uber’ Eats also set a record last month, spiking over 150% year-over-year and hitting a record annual run rate of $52 billion last month.

Read more:Uber is battling DoorDash to rule food delivery. These are the steps Uber’s CEO is taking to topple Eats’ biggest rival.

The increase in booking in the past month has been largely fueled by optimism surrounding increased vaccination in the US and could be a sign things might be starting to return to normal.

“As vaccination rates increase in the United States, we are observing that consumer demand for Mobility is recovering faster than driver availability, and consumer demand for Delivery continues to exceed courier availability,” the company said.

Uber’s stock rose on the news of a rebound in recovery on Monday, climbing as much as 4% in early trading Monday following the disclosure.

The need for ride-hailing services is also setting up a potential shortage of drivers for Uber and competitors like Lyft.

Just last week, Uber announced that it plans to spend $250 million on incentives and guarantees for drivers. The move is a part of an effort to get more drivers back on the road following a shortage caused by the COVID-19 pandemic.

“In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time. In 2021, there are more riders requesting trips than there are drivers available to give them-making it a great time to be a driver,” Dennis Cinelli, the head of Uber’s US and Canada ride-hailing business, said in a blog post.

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Uber is spending $250 million to persuade drivers to get back on the road so it can pay them less again

uber driver prop 22
Rideshare driver Teresa Mercado raises her fist in support as app based gig workers held a driving demonstration with 60-70 vehicles blocking Spring Street in front of Los Angeles City Hall urging voters to vote no on Proposition 22 on Oct. 8, 2020.

Uber announced Wednesday it plans to spend an additional $250 million on “boosted incentives and guarantees” to persuade drivers to get back on the road amid a shortage during the COVID-19 pandemic.

“In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time. In 2021, there are more riders requesting trips than there are drivers available to give them-making it a great time to be a driver,” Dennis Cinelli, the head of Uber’s US and Canada ride-hailing business, said in a blog post.

But Uber also warned the increased pay won’t last forever.

“We want drivers to take advantage of higher earnings now because this is likely a temporary situation. As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels,” Cinelli said.

Uber claimed in the blog post drivers in Philadelphia, Chicago, Austin, Miami, and Phoenix are currently earning pre-tip median incomes between roughly $26 and $31 per hour.

Uber has been notoriously reluctant to share driver pay data, and some independent researchers have found drivers may earn as little as $9.73 per hour after acounting for expenses.

But during the pandemic, many ride-hailing and food delivery drivers have seen their pay dramatically increase, due to the way Uber’s business model works.

Uber’s ability to provide on-demand rides at low prices depends on having lots of drivers active when passengers are looking for a ride. If only one driver is competing for a passenger, that driver can refuse the job until Uber’s algorithm jacks up the pay – which is esssentially what some DoorDash drivers are doing to boost their pay for food-delivery gigs.

If 100 drivers are competing for that same job, Uber can offer much lower pay and one of them will still probably do it, and therefore Uber can charge the consumer less and still make more money itself.

But the pandemic caused a massive drop in the demand for rides, and has kept many drivers – who are especially concerned about getting sick because Uber doesn’t provide healthcare or sick pay – off the road, even as rider demand returns.

That’s a bad situation for Uber, which doesn’t want riders returning to the app only to find no drivers are online and that they’re waiting 20 minutes for a ride and still paying surge pricing.

So, Uber is effectively bribing drivers to get back on the platform until there’s enough competing for those returning passengers that Uber can start whittling down driver pay again.

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Uber gave drivers more control to prove they’re independent. Now the company is taking back control because drivers actually used it.

GettyImages 1176816141 (1) NEW YORK, NEW YORK - SEPTEMBER 24: Dara Khosrowshahi, CEO, UBER, speaks onstage during the 2019 Concordia Annual Summit - Day 2 at Grand Hyatt New York on September 24, 2019 in New York City. (Photo by Riccardo Savi/Getty Images for Concordia Summit)
Uber CEO Dara Khosrowshahi.

  • Uber is revoking California drivers’ ability to set prices and see trip destinations in advance, the San Francisco Chronicle reported.
  • Uber gave drivers more control in 2020 to avoid reclassifying drivers as employees under AB-5.
  • But it reversed course after Prop 22 exempted it from AB-5, saying drivers turned down too many rides.
  • See more stories on Insider’s business page.

In late 2019, California lawmakers passed AB-5, hoping to make it harder for companies like Uber to skirt labor laws and offload healthcare and unemployment insurance costs to taxpayers by misclassifying workers as contractors.

But Uber refused to comply, arguing that AB-5 didn’t apply to its drivers because they aren’t core to its business and that drivers really are independent because they’re “free from the control and direction” of Uber.

In an attempt to prove its independence argument, in January 2020, Uber gave California drivers more control by allowing them to set their own prices for rides and see passengers’ destinations before picking them up.

Regulators and courts didn’t buy it. But fortunately for Uber, a $200 million PR campaign around Proposition 22 successfully persuaded California voters to exempt it from AB-5, saving the company as much as $500 million per year, according to a 2019 estimate by Barclays analysts.

Now that Uber no longer needs to convince California authorities that its drivers are independent, the company plans to reclaim control, revoking the price-setting and passenger destination features it gave drivers barely a year ago, the San Francisco Chronicle reported Monday.

Uber’s reason for the reversal?

Too many drivers took advantage of the control Uber gave them, picking the most profitable rides while declining others, making it harder for customers to get rides and hurting Uber’s business, the company said. According to the Chronicle, one-third of drivers turned down 80% of rides.

Industry observers said the move is hardly surprising but it undermines Uber’s claim that the changes were ever about anything more than dodging regulation.

Uber did not respond to a request for comment on this story.

“It really shouldn’t be a shock to anyone,” Harry Campbell, who runs The Rideshare Guy, a popular blog among drivers, told Insider. “Since they passed Prop 22… there’s nothing holding them accountable for these changes.”

Campbell said that drivers likely won’t be happy given the popularity of the price-setting and passenger destination features, but added, “It’s kind of, unfortunately, a bit of a pattern that Uber specifically often gives drivers some things that they want and then ends up taking them away.”

“Is there a single Prop 22 promise that Uber hasn’t broken?’ Gig Workers Rising, which advocates on behalf of ride-hailing and food delivery drivers, tweeted in response to the Chronicle’s reporting, alluding to Uber’s history of misleading claims during its Prop 22 campaign.

But by revoking some driver-friendly features, Uber – which has yet to turn a profit – also revealed some of its post-pandemic priorities.

Companies like Uber and Lyft rely on flooding the market with drivers, who then face pressure to accept lower-paying rides and risk another driver getting the job or getting penalized themselves for turning down too many rides, even if those rides are unprofitable.

But during the pandemic, there has been a massive shortage of Uber and Lyft drivers, due to a drop in demand for rides and a concern among drivers about getting sick (the companies don’t provide healthcare or sick pay). And even as rider demand returns, many drivers are still staying home.

With fewer drivers on the road and Uber drivers able to freely reject unprofitable rides, they’re driving up their wages. That means higher prices and longer wait times for passengers, which Uber isn’t happy about.

“The companies, strangely, they care more about reliability than profitability at this moment in time,” Campbell said. “They want to make sure that the platform is working like everyone expects and if drivers are ignoring 80% of requests, that means that it literally is going to take longer for you to get matched with a driver.”

Campbell said Uber, Lyft, DoorDash, and other platforms are offering huge incentives to drivers – like a $250 bonus for completing 20 rides – as they struggle to get them back on the road.

As with past promises, those incentives and other driver-friendly features could just as easily disappear if the market becomes saturated with drivers again and companies regain the upper hand, but Campbell said that there needs to be a middle ground.

“If Uber is going to be able to get away with paying drivers like independent contractors, I think that’s kind of some of the control that they have to give up and find a way to make work.”

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Uber ordered to pay $1.1 million to blind passenger who was denied rides 14 separate times

GettyImages 577083258  DENVER, CO - JULY 18: Mike Hess, who is blind, get a ride from an Uber driver after his lunch meeting in Cherry Creek, July 18, 2016. Hess relies heavily on Uber to get around. (Photo by RJ Sangosti/The Denver Post via Getty Images)
A blind passenger gets into an Uber in Denver, Colorado (Lisa Irving not pictured).

An independent arbitrator on Thursday ordered Uber to pay $1.1 million to a blind passenger for illegally discriminating against her after its drivers refused her rides on 14 occasions.

The arbitrator also rejected Uber’s argument it wasn’t liable for discrimination by its drivers because they’re contractors.

Uber said it strongly disagreed with the ruling.

Lisa Irving, a San Francisco Bay Area resident who is blind and relies on her seeing-eye dog, Bernie, to help her get around, brought the claim against Uber in 2018 after “she was either denied a ride altogether or harassed by Uber drivers not wanting to transport her with her guide dog,” according to the arbitrator’s ruling.

Uber drivers left Irving stranded late at night, caused her to be late to work (which eventually contributed to her getting fired), and on two occasions, verbally abused and intimidated her – and that the discrimination didn’t stop even after she complained to Uber, her lawyers told Insider in a statement.

“Of all Americans who should be liberated by the rideshare revolution, the blind and visually impaired are among those who stand to benefit the most. However, the track record of major rideshare services has been spotty at best and openly discriminatory at worst,” Catherine Cabalo, one of Irving’s attorneys, said in the statement.

“The bottom line is that under the Americans with Disabilities Act, a guide dog should be able to go anywhere that a blind person can go,” Cabalo added.

“We are proud Uber’s technology has helped people who are blind locate and obtain rides. Drivers using the Uber app are expected to serve riders with service animals and comply with accessibility and other laws, and we regularly provide education to drivers on that responsibility. Our dedicated team looks into each complaint and takes appropriate action,” Uber spokesperson Andrew Hasbun told Insider in a statement.

But the arbitrator found Uber employees who investigated possible incidents of discrimination were “trained … to coach drivers to find non-discriminatory reasons for ride denials” and even to “‘advocate’ to keep drivers on the platform despite discrimination complaints.”

Under the Americans with Disabilities Act, it’s illegal for transportation businesses that are subject to the law to refuse to transport people with guide dogs, but Uber tried to shift the blame to its drivers, arguing it wasn’t responsible for any ADA violations because its drivers are independent contractors.

The arbitrator disagreed, ruling Uber was also liable for ADA violations because of its “contractual supervision over its drivers and for its failure to prevent discrimination by properly training its workers.”

However, classifying drivers as contractors is a strategy that has allowed Uber to avoid legal liability in other contexts, such as when a pedestrian alleged that she nearly lost her leg after being struck by an Uber.

The strategy has also allowed Uber to avoid paying drivers’ health insurance, sick pay, and unemployment insurance, shifting those costs to taxpayers – who paid $80 million last year to keep Uber and Lyft drivers afloat during the pandemic, making the companies one of the largest beneficiaries of a subsidy program aimed at small businesses.

Uber, Lyft, and other ride-hailing and food delivery companies have aggressively fought efforts in multiple states and countries to reclassify drivers as employees, which would add significant additional costs to their already unprofitable business models. Earlier this week, UK-based food delivery company Deliveroo’s initial public offering tanked by 30% after investors expressed concerned about how it had exploited its drivers.

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How to get your prescriptions delivered through Uber and avoid a trip to the pharmacy

Prescription Delivery
You can use the Uber Eats app or the NimbleRx website to set up prescription delivery through Uber.

  • You can get prescriptions delivered through Uber by signing up as a patient with NimbleRx.
  • NimbleRx offers next- or same-day, contactless prescription deliveries to users in several major cities.
  • To sign up for Uber’s prescription deliveries, link your NimbleRx account to UberEats.
  • Visit Insider’s Tech Reference library for more stories.

In August 2020, Uber announced it would start making contactless prescription deliveries straight to customers’ doors. The feature aims to help vulnerable people receive the medications they need safely, without having to venture out to their local pharmacy.

To make this possible, Uber Health, a HIPAA-secure service, teamed up with NimbleRx, a company that works with local pharmacies to get customers’ prescriptions delivered the same or next day.

If you live in one of the markets served, you can start to get your prescriptions delivered through the UberEats app.

How Uber prescription delivery works

Depending on what device and method you prefer, you can have your current and future prescriptions delivered through the UberEats mobile app or the NimbleRx website.

But before you begin either process, you’ll want to have the names of your prescriptions, your pharmacy address, and your insurance card – if you have one – with you.

FILE PHOTO: A UnitedHealth Group health insurance card is seen in a wallet in this picture illustration October 14, 2019. REUTERS/Lucy Nicholson/Illustration/File Photo
You’ll need your insurance card if you want to pay with it.

The Uber Health program is limited to a few select markets across the United States, including New York City, Los Angeles, Orange County, San Diego, Chicago, Seattle, Miami, Atlanta, Houston, Dallas, and Austin, with plans for future expansion.

However, similar to how UberEats isn’t available for all restaurants, not all pharmacies can deliver prescriptions through Uber. If your pharmacy isn’t available, you can be connected to one that will deliver to you, or have your physician send new ones to Uber Right Choice Pharmacy. The transfer process will take a few days, but once it’s complete, you can order and manage future orders with them through the app.

Deliveries come next- or same-day in discreet packaging with no delivery fee, and you can pay using your insurance. NimbleRx will use what insurance you have on file with your pharmacy, though you’ll want to check with NimbleRx as there are some insurance exclusions. Delivery is currently free, but Uber notes that it’s only a limited time offer.

It’s also important to know that while many prescriptions are eligible for delivery, there’s currently no option for controlled substances.

How to get prescriptions delivered by Uber

Before you can get any prescriptions delivered, you’ll need a NimbleRx patient account. You can sign up for this on the NimbleRx Website.

Sign up through the NimbleRx website

1. Head to NimbleRx and select either “Yes, I have a prescription” or “I will see a doctor soon.”

2. You’ll need to input your personal information, and then prove your identity so that it can be confirmed with your local pharmacy. You’ll also need to verify your mobile phone number by clicking the link they text you in order to activate your account.

how to get prescriptions delivered on uber 2
You will need to enter your information to begin the process.

After successfully signing up for an account, you’ll be prompted to choose your pharmacy as well as the prescription medication you’re ordering. You can use this menu to order your prescriptions through NimbleRx’s own delivery service.

Read on for instructions on how to link NimbleRx to your Uber account.

If you don’t have a prescription that you want to be delivered immediately, you can also set up future prescription deliveries.

How to use Alexa Care Hub to help monitor and contact older relatives or friendsHow to request an Uber with a car seat for your childHow to use Uber Assist or WAV, for riders who may need additional help to enter and exit a vehicleWhat is Uber Eats? Here’s what you need to know about the ride-hailing service’s food delivery app

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Court rules Uber and Lyft must face worker-misclassification lawsuit from Massachusetts’ attorney general

Uber Lyft

A Massachusetts state court on Thursday rejected requests by Uber and Lyft to dismiss a lawsuit accusing the companies of illegally misclassifying their drivers as independent contractors.

The lawsuit, brought by the Massachusetts state attorney general Maura Healey in July, alleged the companies have denied drivers benefits and workplace protections guaranteed to employees by instead classifying them as contractors.

Uber and Lyft then asked the court to toss the case, arguing the state hadn’t done enough to prove drivers were denied benefits and that there wasn’t a legitimate legal dispute over the issue. The court denied both companies’ requests, allowing the case to proceed.

Uber and Lyft did not respond to requests for comment on this story, while labor and driver groups praised the ruling.

“This court order is a complete rejection of Uber and Lyft’s position and a big win for working people,” Massachusetts AFL-CIO president Steve Tolman told Insider in a statement.

“Every worker should be able to earn a decent wage, take care of their health, and protect against harassment and discrimination on the job. We thank Attorney General Healey and her team for holding Uber and Lyft accountable for following the same rules that apply to every other company,” Tolman added.

The two ride-hailing giants have faced an increasing number of legal challenges in recent years over how they classify workers amid growing evidence many drivers are paid less than the minimum wage, and have struggled – particularly during the pandemic – without access to health care, labor protections, and unemployment benefits guaranteed by law to employees.

While companies are typically required to pay into state and federal programs benefiting their workers, Uber and Lyft have passed those costs on to taxpayers. A recent Washington Post analysis found more than 27,000 Uber and Lyft drivers received a combined $80 million from the US government to help them get through the pandemic.

The companies have argued drivers should be considered contractors because they’re able to choose when they can work and which rides they accept, claiming the companies are simply technology platforms that connect drivers and riders.

But a UK court recently rejected that argument, finding Uber and Lyft exercise significant control over drivers – much like a traditional employer – by setting their rates, assigning them rides, and using a rating system to determine their ability to get work on the platform. Uber responded by reclassifying its drivers as “workers,” a category under UK law between employment and contractor, in order to head off further legal disputes with drivers.

California regulators and courts also rejected the arguments put forth by Uber and Lyft, but the companies – along with a coalition of food-delivery companies including DoorDash and Instacart – avoided having to comply with those rulings by spending a combined $200 million to persuade voters to pass a law they wrote that keeps drivers as contractors.

The companies have also spent record amounts on lobbying as the worker classification issue takes the national stage.

The Biden administration’s proposed PRO Act, which wouldn’t automatically reclassify gig workers but would make it easier for them to unionize, has elevated the discussion around which rights and benefits rideshare and food-delivery workers should have – and who should bear those costs.

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SoftBank is under investigation by the SEC following its risky ‘Nasdaq whale’ investments

masayoshi son softbank

The Japanese investing conglomerate SoftBank, which has holdings in household names like Apple, Amazon, Tesla, Uber, DoorDash, and Sprint, is under investigation by the Securities and Exchange Commission, Vice News reported Wednesday.

The agency’s acknowledgment of its investigation follows reporting by the Financial Times last year that revealed SB Northstar, which is controlled by SoftBank CEO Masayoshi Son, as the “Nasdaq whale” behind secretive, risky multibillion-dollar bets on tech stocks during last summer’s market rally.

The SEC disclosed the investigation in response to a public records request from Think Computer Foundation founder Aaron Greenspan, according to the legal transparency group PlainSite.

Greenspan had asked for “any investigative materials” about SoftBank or its web of companies “specifically relating to SoftBank’s trading of stocks and derivatives on those stocks,” according to PlainSite. After initially denying that it had any relevant records, the SEC responded to Greenspan’s appeal by saying that it had records, but couldn’t share them, because “the investigation from which you seek records is active and ongoing.”

SoftBank and the SEC did not respond to requests for comment on this story.

SoftBank faced intense pressure from its major shareholders to unwind its risky options positions after SB Northstar posted $3.7 billion in losses in November, which included $2.7 billion in derivatives losses, the Financial Times reported in November. SoftBank eventually relented to that pressure.

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Uber will pay its 70,000 UK-based drivers minimum wage and benefits following a major Supreme Court defeat

uber driver prop 22
Rideshare driver Teresa Mercado raises her fist in support as app based gig workers held a driving demonstration with 60-70 vehicles blocking Spring Street in front of Los Angeles City Hall urging voters to vote no on Proposition 22 on Oct. 8, 2020.

  • Uber is reclassifying its UK-based drivers as “workers,” it said in a regulatory filing Tuesday.
  • The move requires Uber to follow minimum wage, paid vacation, and other labor laws.
  • Uber strongly opposes efforts to reclassify its drivers, but pivoted in the UK after a legal defeat.
  • See more stories on Insider’s business page.

Uber announced Tuesday it will reclassify drivers in the United Kingdom as “workers,” guaranteeing them minimum wage, paid vacation, pensions, and additional protection under the country’s labor laws.

In a statement, Uber told Insider the move will impact more than 70,000 drivers, and follows a recent unanimous Supreme Court decision that determined drivers should be classified as workers.

Uber initially downplayed the ruling, saying it “focussed on a small number of drivers who used the Uber app in 2016,” though shares of Uber dropped as much as 2% following the ruling.

With Tuesday’s announcement, Uber has opted to reclassify all UK drivers rather than fight legal battles with individual drivers about whether the court’s ruling would apply to them.

“Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives,” Jamie Heywood, the regional general manager for Northern and Eastern Europe, told Insider in a statement.

The move is a major shift for Uber, which has aggressively fought rulings by courts and regulators in the US that have determined drivers to be employees as opposed to contractors. In California, Uber spent at least $30 million persuading voters to pass Proposition 22, a law it co-authored that carved out an exemption from state labor laws to allow rideshare and food delivery drivers to be treated as contractors.

Unlike American law, which defines workers as employees or contractors, UK law has an additional “worker” category, which entitles workers to receive the minimum wage, paid vacation, rest breaks, and protections against illegal discrimination, retaliation for whistleblowing, and wage theft. That classification falls short of guaranteeing benefits like parental leave and severance to which full employees are entitled.

Uber said the UK minimum wage, which is slightly above $12, will serve as an “earnings floor, not an earnings ceiling” after accounting for roughly 62 cents in per-mile expenses, but that drivers won’t be paid for the time they spend waiting for a ride – which some researchers have found accounts for as much as 33% of drivers’ work.

Uber also said it will pay drivers around 12% of their earnings as vacation pay every two weeks and enroll them in a pension plan to which Uber will also contribute.

Labor advocates voiced their support for the move and the court ruling that proceeded it.

“Dear America … see what happens when a government lays it down? Is Uber leaving? No, they’re actually doing right by their workforce in the UK. Our drivers deserve this too. Why would an American company short change American workers? Because we let them!” tweeted California Assemblywoman Lorena Gonzalez, the author of AB-5, the state labor law that Uber sought an exemption from by pushing Prop 22.

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