Gig Economy

Legal experts claim the UK Supreme Court's unanimous decision could deliver a major blow to the company's business model in one important market and opens the door for drivers to claim the minimum wage and paid time off.

The UK court decision comes months after Californians voted to make Uber, Lyft and other gig economy companies exempt from local laws requiring them to class their drivers as employees rather than independent contractors.

The Spanish Supreme Court ruled on Wednesday that the riders are wage earners and are therefore now working as falsely self-employed. "The relationship between a rider and Glovo is of a labor nature," says the note issued by the Supreme Court, which adds that the company "is not a mere intermediary in the hiring of services between stores and rider"

Smartphones dangling from trees became a usual sight near Amazon.com delivery stations and Whole Foods stores in the Chicago suburb thanks to an Uber-like app called Amazon Flex, that lets drivers make deliveries in their own cars.

Someone places several devices in a tree located close to the station where deliveries originate. Drivers then sync their own phones with the ones in the tree and wait nearby for an order pickup. 

For many with other jobs, it’s a way to earn extra money in their spare time. But with joblessness rising and unemployment payments shrinking, competition for such work has stiffened, and more people rely on it as their primary income source.

A last-minute decision by the California First District Court of Appeal avoided the suspension of ridesharing operations by Lyft and Uber. Both companies were planning to suspend their California operations at Thursday 23:59 (Pacific Time) due to the requirement of reclassifying all Lyft drivers as employees.
Before the appeal was accepted, in a blog post, Lyft stated: "We don’t want to suspend operations. We are going to keep up the fight for a benefits model that works for all drivers and our riders."
"We are glad that the Court of Appeals recognised the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want," Uber said in a statement.

Rappi delivery workers in Bogota, went on strike Saturday to protest unfair working conditions. Around 1,000 protesters gathered in the north region of the Colombian capital.

A spokesperson for the "Rappitenderos" said, "There are also unjustified blocks, not in the wrong way."

Rappi said, in a statement, it would listen to the workers and highlighted its efforts to protect them during the pandemic.

In the past, the CEO of Just Eat Takeaway has relied on the gig economy work model, where workers have flexible work hours but fewer or no benefits compared to regular staff, for his Takeaway.com business that he founded 20 years ago.

He has now stated that "it's our intent to not have those in Europe", referring to gig workers and added that he does not want people that deliver food from restaurants to clients to face harder working conditions.

"We want to be certain they do have benefits, that we do pay taxes on those workers" as they are "a large multinational company with quite a lot of money and we want to insure our people".

The San Francisco Superior Court granted California’s request for a preliminary injunction saying that Uber and rival Lyft must make drivers employees rather than independent contractors. Judge Ethan Schulman delayed that order for ten days, giving the companies time to appeal, as both have said they will.

Dana Khosrowshahi, Uber CEO, stated: "If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly."

Uber and Lyft are pushing Proposition 22, a November ballot initiative that would keep drivers as freelancers entitled to some benefits and earnings guarantees.

Massachusetts on Tuesday followed California in suing Uber and Lyft over how drivers are classified as independent contractors instead of employees entitled to extensive benefits. The complaint filed in Suffolk Superior Court claims both companies violate state minimum wage, hour and sick time laws.

"Uber and Lyft have built their billion-dollar businesses while denying their drivers basic employee protections and benefits for years," said State Attorney General Maura Healey. "This business model is unfair and exploitative. We are seeking this determination from the court because these drivers have a right to be treated fairly."

Uber announced on Tuesday the launch of an app-based grocery service in 19 cities in Latin American and Canadian cities. The initiative is a partnership with Cornershop, a Chilean online grocery provider that Uber has held a majority stake in since October 2019.

Customers in eleven Brazilian cities, including Belo Horizonte, Rio de Janeiro and São Paulo, four Chilean cities, Colombia’s Bogota, Peru’s Lima and Canada’s Montreal and Toronto will be able to order groceries through the Uber Eats app. And starting later this month, grocery delivery will be available in Miami, FL and Dallas, TX.

Over a thousand food delivery apps workers on motorcycles gathered in São Paulo on Wednesday to protest their work conditions, set by Uber, Colombia’s Rappi and Brazil’s iFood.

The deliverymen seek higher pay and better health measures, with Brazil now a Covid-19 epicentre and delivery workers facing exposure to the virus with their work in high demand.

Uber's CEO Dara Khosrowshahi announced to employees today that the company will lay off other 3,000 employees and close 45 offices globally.

“I knew that I had to make a hard decision, not because we are a public company, or to protect our stock price, or to please our Board or investors,” Khosrowshahi wrote in a memo to employees.

The announcement comes just days after the company stated it would cut 3,700 jobs in its customer service and recruiting departments.

Uber announced Wednesday it’s cutting 3,700 full-time workers, or about 14% of its workforce, as people fearful of infection either stay indoors or try to limit contact with others to minimize risk when they do venture out.

The layoffs and related costs like severance will cost about $20 million for the San Francisco-based company, which had already imposed a hiring freeze. Uber has offered up to 14 days of financial assistance to drivers and delivery workers who were diagnosed with the COVID-19 disease or placed in quarantine.

California Attorney General Xavier Becerra, along with city attorneys from Los Angeles, San Diego, and San Francisco, filed a lawsuit asserting Uber and Lyft misclassified their drivers as independent contractors under the state's new labor law.

According to the lawsuit, both companies gained an unfair and unlawful competitive advantage by claiming their workers were contractors.

Techcrunch reports the lawsuit, filed in the Superior Court of San Francisco, seeks $2,500 in penalties for each violation, possibly per driver, under the California Unfair Competition Law, and another $2,500 for violations against senior citizens or people with disabilities.

Amazon warehouse workers on New York’s Staten Island, and Instacart works across the United States, went on strike Monday to call attention to what they called a lack of protections for employees who continue to come to work amid the coronavirus outbreak.

Workers for both companies want more access to paid sick time off. At this time, it's available only to those who have tested positive for the coronavirus or get placed on mandatory self-quarantine.

Amazon workers want their warehouse to be closed for a longer cleaning, with guaranteed pay.

Instacart's grocery delivery workers ask for disinfectant wipes and hand sanitizer and better pay.