SAN FRANCISCO - Uber and Lyft are hoping a courtroom reprieve will spare them from shutting down their rival smartphone-summoned ride services in California on Friday.
The companies are awaiting word from an appeals court whether they will be able to delay having to abide by a new state law that officials argue requires them to reclassify drivers as employees entitled to worker benefits.
A judge gave them until the end of Thursday to make the change, which both companies argue is too complex and costly to do quickly.
Uber and Lyft have said they will suspend ride services in their home state, most likely until after voters in November determine the fate of a proposition they are sponsoring.
The proposition, which would become law if approved, would keep drivers classified as contractors but provide benefits such as health care.
"California is trying to do the right thing, but this is the wrong time for it," said technology analyst Rob Enderle of Enderle Group, referring to a job market crippled by the pandemic.
"This is not a time when you want to knock a whole lot of people out of work, which is the danger here."
A judge last week granted a restraining order in a lawsuit filed by California attorney general Xavier Becerra and three cities including San Francisco, where Lyft and Uber are based.
The suit calls on the two rideshare companies to comply with a new state law that requires "gig workers" to be classified as employees, eligible for unemployment, medical and other benefits.
- Driverless future? -
A judge ordered Uber and Lyft to reclassify drivers as employees and has refused pleas to extend his deadline past Thursday, according to an appeal filed by Lyft.
"Because Lyft cannot make the changes the injunction requires at the flip of a switch, absent immediate action by this court, Lyft will be forced to suspend its rideshare operations in California," the company argued in its appeal.
This would cause "widespread disruption to hundreds of thousands of drivers, millions of riders and the state's transportation infrastructure," according to the appeal.
Uber's chief executive Dara Khosrowshahi has said the company will "have to essentially shut down Uber until November when the voters decide."
Uber and Lyft back a referendum to overturn the law, while pledging to provide benefits for a social safety net that would keep gig workers independent.
The rideshare rivals maintain that most of their drivers want to remain independent even if they also are looking for benefits.
"We don't even know if we are going to keep driving, because of this situation," said Alexander Palacios, a 43-year-old Uber driver in Los Angeles.
"Honestly, I don't mind, because I think Uber and Lyft deserve it because they've been doing really bad to drivers for a long time."
A backup plan for Uber would be to pause operations in California, eventually restarting with "a much smaller service, much higher prices" according to Khosrowshahi.
The threat to its business model puts pressure on Uber to move faster toward its vision of dispatching self-driving cars to provide rides on demand, Enderle said.
"Uber is pivoting to autonomous cars, so something was going to happen to the drivers anyway," Enderle said.
"You were either going to be an employee or you were going to be unemployed; there was a sword of Damocles hanging over this anyway."
Agence France-Presse
TORONTO -- Ride-hailing apps like those of Uber Technologies and Lyft Inc are expected to alter the state of car ownership towards subscription-based services and shared ownership, auto industry experts said at a conference on Wednesday.
At the annual Collision Conference in Toronto, speakers said ride-hailing apps are also set to play a role in testing automation for safety.
"Your phone will be your car," said Andre Haddad, CEO of Turo, a peer-to-peer car-sharing company that enables users to rent their cars out to others.
Haddad said that while car sales have never been higher globally, people are realizing that owning a vehicle is increasingly becoming unaffordable due to car payments, insurance, and parking.
"Many more are realizing they can share their car when they're not using it or rent it out to recover the big costs of ownership," he added.
Uber said it is the largest ride-hailing firm in the world with 91 million users globally and a 65 percent market share in North America.
Both Uber and Lyft went public this year, but are trading well below their offer prices.
Haddad said that car ownership among young adults was on the decline, with fewer adults under the age of 25 purchasing cars.
At the same time, he said the demographics would stabilize and demand for cars for events like weekend trips or vacations would maintain their interest.
Scott Hempy, CEO of Filld, a mobile gas delivery service, said labor trends like working remotely or from home had contributed to the reduced interest in cars, and that ride-sharing would change the insurance industry to per mile charges, rather than a flat fee.
Ride-sharing fleets and taxis are expected to be the testing ground for automation, according to Zaki Fasihuddin, the CEO of Volvo Cars Technology. Fasihuddin said ride-sharing cars would be the first practical applications for autonomous vehicles, at the ultimate goal of reducing all fatalities.
"Give consumers the choice," said Fasihuddin. "Ride-sharing is a viable option. Nowadays people take that for granted, and that's a valid mode of transportation.
source: news.abs-cbn.com
A day of strikes planned by Uber drivers in cities around the world drew a modest turnout Wednesday, as protesters denounced the ride-hailing giant’s employment and pay practices before its blockbuster initial public offering this week.
In Britain, some drivers, joined by members of other unions, protested at Uber offices around the country. About two dozen protesters outside the British headquarters in East London banged drums; released a smoke flare; displayed banners that read, “Uber sell off: Billions to bosses, poverty pay for drivers”; and chanted, “Uber, Uber, you can’t hide, we can see your greedy side.”
In San Francisco, hundreds of protesters blocked the street in front of Uber’s headquarters as a brass band played. They carried signs that said Uber and Lyft, its primary rival in the United States, which went public in March, were “launching IPOs on the backs of their drivers.”
And outside Uber’s New York City headquarters in Queens, about 50 drivers and their supporters protested their wages and some of the employment practices of ride-hailing companies, chanting: “Driver power! Union power!” They said they felt they were being treated unfairly by companies that they had helped turn into transportation Goliaths.
“We invest in this company,” said Georges Colois, an Uber driver for more than two years in New York, pointing to the costs of renting or buying a car and paying for its upkeep and fuel, all to the benefit of the ride-hailing companies.
“I believe we deserve some respect and to be paid fairly,” he said.
The strikes were one of the biggest coordinated efforts by drivers to demonstrate their grievances against Uber and Lyft, organizers and drivers said. The protests garnered support from several candidates for the Democratic presidential nomination, including Sens. Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts and Kamala Harris of California.
But the strikes were largely muted. At La Guardia Airport in New York on Wednesday morning, cars driving for Uber and Lyft picked up passengers, and one airport worker said the flow of for-hire cars was typical for the time of day. Most drivers interviewed said they were either unaware of the strike or unable to participate because they needed to earn money.
At the heart of the drivers’ frustration is their status as independent contractors, not full-time workers. Ride-hailing companies argue that drivers prefer the flexible schedule of a freelancer. But drivers lack full-time benefits like health care and have said they have little control over their wages because the companies set the fares and take a cut of the fees they earn from rides.
In Melbourne, Australia, about 30 protesters gathered near an Uber facility, holding signs that said, “On-demand workers demand a living wage,” and chanting: “Uber, Uber, you must listen. We will break your algorithm!” Their complaints included falling pay, long hours and a lack of sick leave.
The strikes were timed right before Uber’s public offering, with the company set to start trading its shares on the stock market Friday. Uber is the biggest of a generation of technology startups that base their businesses on smartphones and use gig workers. The company is expected to be valued at more than $80 billion in its IPO, and its founders and investors are set to reap billions of dollars in wealth.
But that windfall will largely skip the drivers. Although Uber has said it intends to award cash bonuses to more than 1.1 million drivers — with those in the United States having the option to buy the company’s stock in the IPO — drivers have called that a fig leaf. They said the wealth being gained by top executives and private investors had prompted the action Wednesday.
Mostafa Maklad, a driver in San Francisco who worked with the group Gig Workers Rising to help organize the protest, said he had received an IPO bonus of about $500 from Uber after driving for four years.
“They are just throwing us crumbs from how much money they will make,” he said.
Annette Rivero, who drives for Uber and Lyft in San Francisco, said she had recently struggled to keep up with her rent and bills as the ride-hailing companies cut back on incentive bonuses.
“I’m out until 4 a.m. trying to make money to pay my phone bill the next day,” she said.
In Chicago, a group of drivers called Chicago Rideshare Advocates has put forth a legislative wish list that includes pay-rate increases, a cap on the number of ride-hailing vehicles in the city and an independent way for drivers to appeal suspensions or banishment, known as deactivation.
Eli Solomon Martin, a founder of the group, said seemingly arbitrary deactivations were among the most frustrating aspects of work as a driver.
“If you haven’t had an unfair deactivation, you know someone who has,” Martin said.
More than 3 million people drive for Uber globally and have earned $78.2 billion from the service since 2015, the company said in a recent regulatory filing. In a statement Tuesday, Uber said, “Drivers are at the heart of our service ─ we can’t succeed without them ─ and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road.”
Lyft said in a statement, also Tuesday, that driver earnings had increased over the last two years.
“We know that access to flexible, extra income makes a big difference for millions of people, and we’re constantly working to improve how we can best serve our driver community,” a spokesman said.
2019 New York Times News Service
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SAN FRANCISCO/BENGALURU -- Ride services company Lyft Inc forecast that its losses would peak this year as it controlled expenses and got more revenue from each customer, posting a $1.1 billion quarterly loss on Tuesday, days ahead of rival Uber's IPO.
"We are encouraged by our strength of our core business and see a clear path to profitability in ride sharing," said Chief Financial Officer Brian Roberts, sparking a short-lived bump in shares.
Lyft promised profit in ride-hailing services without giving any timeline, but it previously had warned regulators it may never make money overall as it invests heavily in self-driving cars, renting scooters and other ventures.
As ferocious growth slows at Lyft and Uber Technologies Inc , investors are paying more attention to what the companies need to do to make a profit.
Investors appeared uncertain how to interpret the company's performance, with shares moving up and down after the bell. Since Lyft's IPO on March 29, shares had fallen 23 percent.
The report, Lyft's first as a public company, showed revenue nearly doubled for the quarter ended in March but forecast that growth would slow to 52 percent to 53 percent for the full year. Lyft is watched as a bellwether for Uber, which will price its offering on Thursday.
Lyft said it was getting more revenue per customer, reducing incentives and boosting margins, although investments in areas such as self-driving, scooters and bikes were masking improvements in its core business.
New technology to match drivers and riders, and higher-priced rides in luxury vehicles were helping boost margins, it said. Lyft said its adjusted EBITDA margin improved to negative 28 percent from negative 60 percent a year ago.
The company, which says it has nearly 40 percent of the US ride-hailing market, said increased demand helped push revenue to $776 million in the quarter, above analysts' average estimate of $739.4 million, according to IBES data from Refinitiv.
A second-quarter revenue forecast of $800 million to $810 million was ahead of analysts' expectations of $783.1 million. The low end would amount to a revenue increase of 58 percent, however, far short of the growth Lyft has enjoyed recently.
Last year's second-quarter revenue got a boost from a price hike, making this year's comparison more challenging, Lyft said.
Atlantic Equities analyst James Cordwell called the results "pretty strong," with hints that Lyft was continuing to take market share from Uber. He cautioned, however, that Lyft's outlook did suggest "a meaningful slowdown in revenue."
"The question will be whether this is just conservatism, Uber starting to fight back, or the company hitting tougher comps," Cordwell added.
In a snub to Uber, Lyft also announced a partnership with Alphabet Inc's Waymo in which Lyft will deploy 10 self-driving vehicles around the Arizona city of Phoenix by the third quarter. Uber has welcomed Waymo cars on its network but has not signed any deals.
For its second quarter, Lyft forecast an expected adjusted EBITDA loss of $270 million to $280 million.
Lyft posted revenue of $37.86 from each of its 20.5 million active riders during the first quarter, a 34 percent increase in revenue and a 46 percent increase in riders over the same period in 2018.
A net loss widened to $1.14 billion, or $48.53 per share, in the first quarter ended March 31 from $234.3 million, or $11.69 per share, a year earlier. Stock-based compensation and payroll tax made up $894 million of that amount.
Last year, Lyft had 30.7 million riders and 1.9 million drivers in more than 300 cities in the United States and Canada. In comparison, Uber - which could be valued at about $90 billion - had 75 million riders and 3.9 million drivers in 65 countries.
source: news.abs-cbn.com
SAN FRANCISCO — Uber plans to set a price range for its initial public offering that would value it at as much as $90 billion, a person with knowledge of the situation said Thursday, in a sign of caution amid a flood of highly hyped tech offerings.
The world’s largest ride-hailing company, Uber plans to offer its shares to investors for $44 to $50 each, putting its total valuation between $80 billion and $90 billion, said this person, who was not authorized to speak publicly.
In that range, Uber would fall short of the $100 billion valuation that it would have reached based on earlier pricing it shared with some investors, though it would still be above the $76 billion it was appraised at in its most recent private fundraising in August.
Lyft, Uber’s chief rival in the ride-hailing industry, got off to a turbulent start in public markets. In the weeks since Lyft’s shares began trading, they have skidded below their offering price, making it more of a challenge for Uber to pitch itself to investors.
Lyft was the first ride-hailing business to go public, and stock investors are closely watching its progress to determine how to value the business model. Both companies are growing rapidly, but neither is profitable. Lyft increased its IPO price after meetings with investors suggested there was a strong appetite for the stock, but since the stock began trading Lyft’s valuation has dropped from $24 billion to $16.1 billion.
The rocky start created pressure for Uber to be conservative in its pricing, and avoid “breaking” — or falling below — its IPO price, said Kathleen Smith, a principal at Renaissance Capital, which provides institutional research and IPO exchange-traded funds.
“Lyft acts as a very important valuation bench mark for Uber,” she said. “Uber cannot break its IPO price. The best way to avoid breaking your IPO price is to be conservative when you start out with your valuation.”
Lyft and Uber are among a collection of tech companies headed to the public markets this year. Pinterest and the videoconferencing company Zoom have made their debuts. Food delivery service Postmates, workplace messaging app Slack and home fitness company Peloton are set to follow.
Uber’s potential valuation, which it will finalize when it sets the price for its shares the day before it begins trading next month, nonetheless crowns the company as the most valuable of its generation of tech startups.
Many of these companies upended traditional industries like transportation and real estate through mobile apps and a marketplace-based business model that relies on independent contractors.
Over the past decade, Uber, which lets people hail rides through an app and uses freelance drivers, has disrupted the taxi industry and thoroughly changed many people’s travel behavior.
But it is a long way from proving its disruptive business is also a profitable one.
In a recent regulatory filing, Uber said it lost $1.8 billion in 2018 on revenue of $11.3 billion. It also noted that, although the company’s business is still expanding, that growth had slowed. Unlike Lyft, Uber has also begun secondary businesses providing freight shipment and food delivery, which the company said were growing more quickly than its core ride-hailing business.
One of Uber’s most significant costs is the money it spends to create self-driving cars — a long-term project the company hopes can help it pare the money is has to pay its drivers.
It spent $457 million on its development of autonomous vehicles during 2018, but industry watchers believes its program has fallen behind bigger rivals like Waymo, which is owned by Google’s parent company, Alphabet.
Uber recently received $1 billion in new funding for the effort from SoftBank and Toyota. The investors valued Uber’s self-driving unit at $7.25 billion.
Uber plans to begin meeting investors in an official roadshow next week, and its underwriters, led by Morgan Stanley and Goldman Sachs, could raise the offering price of its shares if they determine that prospective investors are interested enough. In a letter Uber issued to holders of its convertible bonds this month, the company floated a price range of $48 to $55 for its shares.
Since Lyft’s IPO, other companies have been rewarded for playing it safe as they first approached investors. Pinterest, the digital pin board company that went public this month, initially offered its shares to investors at below its last valuation in the private market. By the time of its debut, however, the price range had been raised above that previous valuation.
Uber’s planned price range was reported earlier by Bloomberg.
Even at a $90 billion valuation, Uber would be the third-largest company to enter the United States’ public markets in the last 10 years, topped only by Facebook’s 2012 debut at $104 billion and Alibaba’s IPO in 2014, which valued the e-commerce giant at $167 billion.
Lise Buyer, founder of the Class V Group, an IPO advisory firm, said the lower pricing was a sign that investors were valuing each company on its individual merits, rather than on broader market trends.
“While they will seemingly pay any price for some, more often they will evaluate each company separately,” she said. She added that a once-reported $120 billion price tag for Uber was never set in stone. “No one really knows what price will be on the cover until it’s in black and white,” she said.
c. 2019 New York Times News Service
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WASHINGTON -- The "sharing economy" is becoming mainstream with the anticipated stock listings from services such as Uber, Lyft and Airbnb, signs that the trend is gaining momentum and impacting multiple sectors.
These multibillion-dollar online platforms have already been a disruptive force in many economic segment, and analysts say the public listings may be a watershed moment, likely to fuel even more changes.
The growth in these on-demand services is eroding sentiment for ownership of homes, cars and other goods, and is also shifting the concept of labor and employment, sparking fierce debates on whether the change is good or bad.
Lyft, the large US ride-hailing service and Uber rival, became the first to announce its initial public offering, seeking to expand a firm valued privately at more than $15 billion.
There has already been an explosion of startups for sharing cars, bikes, scooters, housing and more services. The office rental sector is being transformed by co-working spaces like WeWork, now valued at some $45 billion.
"This is just the beginning for the sharing economy," said Arun Sundararajan, a New York University professor who follows the sector.
"I think we'll see large platforms for professional services for certain kinds of health care, and perhaps for alternative energy," he said.
Spending for "on demand" on services such as Uber and Airbnb and other digital platforms rose 58 percent in 2017 to $75.7 billion in the US, with more than 41 million consumers participating, according to a survey by Rockbridge Associates.
Rockbridge founder Charles Colby cautions, however, that the sizzling growth may cool.
"I don't see these firms as the next Amazon or Apple, because they are carving out narrow marketplaces and will start experiencing competition from traditional providers, some of which are quite savvy," he said.
Sharing economy firms have also sparked their share of controversy. Uber and Lyft have faced protests and challenges from traditional taxi operators and some regulators have banned or limited ridesharing. Airbnb has also been curtailed in some markets amid complaints over disruptions in the real estate markets and the hotel sector.
PRIVATE CARS VANISHING?
In transportation, some analysts argue the sharing trend is moving at a breakneck pace that will radically change urban landscapes, in line with the vision of firms such as Uber and Lyft to sharply reduce the need for private vehicles.
Tech research firm RethinkX predicts that the number of cars in the United States will drop by more than 80 percent by 2020 and 95 percent of travel will be using on-demand autonomous electric vehicles.
By gaining access to capital on Wall Street, sharing economy firms may be able to grow even bigger and flex their power more in disrupting traditional kinds of services.
The IPOs suggest that the sharing economy "is ready for prime time," said Saif Benjaafar, director of the University of Minneota's Initiative on the Sharing Economy.
"Lyft and Uber have demonstrated the operational viability of the business model: the ability to execute at scale and in different markets. What remains to be seen is to what extent these operational capabilities can now be leveraged to achieve financial profitability."
Benjaafar noted that Uber and Lyft have piled up huge losses while Airbnb has been profitable, they revolve around the same concept.
These firms "demonstrated the viability of businesses built around the concept of trust among strangers," Benjaafar told AFP.
"They also showed... how rapid growth can be achieved by being asset-light, and instead tapping into existing assets with excess capacity, and relying on an independent and contingent workforce."
WORKER ANGST
That feature -- the contingent workforce -- is one of the main targets of criticism of the online platforms.
These services upend the notion of traditional employment: backers say this leads to more flexible work arrangements and entrepreneurship, while critics argue it destroys the benefits and security available in most conventional jobs.
A 2018 study by the UCLA Institute for Research on Labor and Employment found that most ride-hailing drivers worked full time and supported their families from that income.
The study also found 44 percent had difficulty paying for work or vehicles expenses, and that most wanted an organization to demand improvements in wages and working conditions.
While many see advantages in the flexible work, on-demand drivers must find other ways to get needed benefits such as health and unemployment insurance.
Sundararajan said one of the main challenges for the sharing economy will be what happens to the "social safety net" which includes benefits such as health insurance, sick leave and retirement.
He said the current social contract established in the 20th century revolves around traditional employment.
"In 20 years when we look back at this, if we can do a good job of refashioning our social safety net to be tailored for this new economy, that is going to be central to whether we see this transition as good or bad," Sundararajan said.
source: news.abs-cbn.com
The New York City Council on Wednesday agreed to cap the number of licenses for ride-hailing services such as Uber Technologies Inc for one year, dealing a blow to the companies that have relied on the largest U.S. metro area for a major source of their revenue.
The first such cap by any major U.S. city was part of a package of measures that also includes setting a minimum wage for drivers. The package, opposed by major ride-hailing companies, is aimed at reducing traffic congestion and increasing driver paychecks in the wake of the explosive growth of for-hire vehicles. The drop in incomes has demoralized many drivers and the New York Taxi Workers Alliance said there have been six suicides among cab and livery drivers in recent months.
New York Mayor Bill de Blasio said he intended to sign the bills into law, which would start the 12-month period where no new for-hire vehicle licenses would be issued, with an exception for wheelchair-accessible vehicles.
"This action will stop the influx of cars contributing to the congestion grinding our streets to a halt," he said in a statement.
The number of ride-hailing vehicles operating in the city has jumped from about 12,600 in 2015 to about 80,000 this year, according to the New York City Taxi and Limousine Commission. About 14,000 yellow cabs operate in the city.
The effort to cap the services in New York, Uber's largest U.S. market, was opposed by ride-hailing businesses, including Uber, Lyft and Via.
"The city’s 12-month pause on new vehicle licenses will threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion," Uber said in a statement.
Lyft said: "These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs."
Via, which operates shared rides with established stops, hopes the city will make an exception for carpools, which it says reduce congestion and provide drivers with the most money.
In emails to nearly 5 million New Yorkers last month, Uber said riders would face higher prices, longer wait times and less service in the city's outer suburbs by drivers.
The New York Taxi Workers Alliance, an 18,000-member union representing the city's taxi drivers, hailed the council's vote as a victory.
"New York City is the first city in the country enact drivers' demands into legislation," it said on its website.
Last month Uber’s CEO and Lyft’s president both addressed the traffic congestion complaints at a technology conference in Aspen, Colorado.
They said they are trying to broaden their services by reducing reliance on cars, which can be seen in Uber’s acquisition of JUMP bikes and a deal with Lime scooters. Lyft has acquired the Motivate bike-sharing company. It has also pledged to make half of its trips carpools, with multiple passengers by 2020.
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