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Why Uber And Lyft May Be Bad For The Poor (And The Earth)

Reprinted with permission from AlterNet.

A 15-minute Uber ride or a 30-minute transit ride? For affluent city dwellers who increasingly prefer comfort and convenience, this choice is a no-brainer. However, this choice is a privilege that remains out of reach for those who live in transit-dependent low-income communities, who face many barriers to accessing ride-hailing services.

Uber competing with taxis is old news, but many now worry that ride-hailing services like Uber and Lyft compete with public transit for riders. Not only can ride-hailing service be incredibly convenient, nowadays it can be dirt cheap, increasing the appeal of simply opening the mobile app. This trend may come as no surprise to cities with limited and inefficient transit that are losing their poor, transit-dependent riders in droves to gentrification.

However, a 2017 study shows that even in New York City, Lyft and Uber ridership is increasing, as subway and bus ridership declines. When ride-hailing services threaten even the best public transit network in the country, you know we have a major problem. The graphs below show the changes in ridership by mode from the baseline of the previous year.

This drop in ridership and revenue indicates has made it harder for some cities to invest in public transit. Given this reality, cities may rely more heavily on shared mobility services such as bikesharing, carsharing, luxury commuter shuttles and ride-hailing services to replace public transit trips. Some public transit agencies are already testing this idea, and are providing subsidies to ride-hailing companies as a substitute to transit.

So who will be most harmed by less public transit service? Well, everyone who breathes dirtier air or sits in clogged traffic as transit use declines will be hurt, but transit-dependent low-income communities of color will suffer most. And city leaders can’t just ask these riders to replace their usual bus routes by downloading a ride-hailing app. Lyft and Uber don’t work for all demographics, especially those in rural areas, and those without access to banks or smartphones.

And while ridesharing fares have become cheaper over time, generally they are still much more expensive than public transit. While Lyft and Uber have vague “anti-discrimination” policies on their websites, there are no specific procedures to prevent discriminatory practices such as drivers going offline to avoid requests in lower-income areas.

A study showed that African-Americans faced 30 percent longer wait times and were twice as likely to have their ride cancelled as their white counterparts. Before cities open the floodgates to shared mobility services—Uber and Lyft in particular–they must take smart steps to reduce the harm to transit-dependent communities of color.

San Francisco recently began taking proactive steps to address potential harms of shared mobility services by approving a set of Guiding Principles for Management of Emergence Transportation Services to be used in all decisions and policies relating to these shared mobility options, including ride-hailing, microtransit, bike and carsharing, etc. The principles cover ten categories, including equitable access, sustainability, congestion, fair labor practices, and the need to complement as opposed to competing with transit. This marks a step in the right direction in reigning in the shared mobility industry and ensuring equity and sustainability are meaningful parts of their business models.

While the shared mobility industry can play an important role in our transportation system, it must not be allowed to completely replace biking, walking, and clean public transit. Lyfts and Ubers contribute to congestion and pollution, and failure to regulate them enables the automobile addiction of cities worldwide. A report from New York City shows ridesharing companies have caused a net increase of 600 million vehicle miles traveled, resulting in a 3 to 4 percent upsurge in traffic. Duke University released a report concluding that a single-occupancy vehicle emits 89 pounds of CO2 per 100 passenger miles, while a full bus emits only 14 pounds.

Meanwhile, the rapid growth of electric buses and other clean technologies will only further increase the efficiency of public transit—strengthening the argument that public transit is cleaner and more efficient than Lyfts and Ubers, and therefore should be a top priority in transportation planning. That’s one of the reasons the No Uber Oakland campaign has made working with—and not undermining—public transit one of its demands of the ride-hailing giant.

Greenlining’s Mobility Equity Framework seeks to ensure that the business objectives of shared mobility companies do not eclipse investments in clean forms of transportation such as walking, biking, and public transit. Low-income communities of color need greater access to clean, affordable transportation options that serve as connectors to economic opportunity. This framework will prioritize clean transportation options that align with equity and sustainability goals, before hastily rolling out the red carpet for the shared mobility industry.

Uber And Deregulated Hypercapitalism Increasingly Leave Americans Unprotected

Published with permission from Alternet.

Last week in San Diego, Calif., an Uber driver was charged with 20 counts of sexual assault-related charges stretching back several years, only months after he allegedly raped an intoxicated young woman who sought a ride home. (Uber immediately fired the driver after that incident last winter.) The attack, which was rare but not unprecedented, prompted Uber’s competition, the traditional taxi industry, to demand the Golden State require ride-share drivers undergo police-conducted fingerprinting and criminal background checks—which Uber has fervently opposed.

“Driving for Uber provides sexual predators with a paid opportunity to locate and transport intoxicated victims,” said Dave Sutton, a spokesman for Who’s Driving You? a taxi industry group that has complained ride-share drivers don’t operate under the same government-administered accountability rules as they do. “Police-conducted fingerprint background checks could deter such predators. The CPUC (California Public Utility Commission) should urgently take up fingerprinting Uber and Lyft drivers to protect Californians,” Sutton said.

While the CPUC said it will look at that in June, there is more to this sordid news and ongoing political fight than meets the eye. The odds are not just long that state regulators will interfere with a high-tech company that says it’s already self-policing its drivers, and paints itself to lawmakers as a vanguard of the future. The embrace of rapidly growing companies like Uber is the harbinger of a deeper and more disturbing trend—the reality that Americans are increasingly unprotected as individuals against the growing power of corporate giants.

State government, even in states like California where Democrats are in the majority, are not insisting that seemingly new industries—such as the ride-share industry—follow consumer protections that have existed for decades. There is a reason for this. In 2015 in California, Uber spent more money lobbying lawmakers to avoid state regulation than tech giants Apple and Facebook, according to Governing, a magazine for policymakers.

Uber’s lobbyists, led by President Obama’s 2008 campaign manager, David Plouffe, opposed legislation that would mandate drivers get special licenses, are treated as employees and not contractors, have more insurance, and undergo drug testing and background checks. Many in the Democrat-run statehouse consider Plouffe a celebrity, posed for selfies with him, and defeated many of the public safety hoops that long ago were required of traditional taxis, Governingreported.

When it came to screening drivers, Uber said it would use a private firm, not police and criminal record databases, as it explained on its website, because government databases are often incomplete and there’s been too much racial profiling and race-based convictions in the criminal justice system.

“In particular, communities of color are disproportionately impacted because they are arrested at a higher rate,” Uber explained, as it defended its use of private screening firms and rejected use of police records. “Across the U.S., at least 70 police departments arrest African Americans at ten times the rate of Caucasians.”

All of what Uber cites is true, but it’s not the whole picture. And Uber’s touted precautions have not prevented some predatory drivers from scouting for targets and assaulting women. That’s what happened in Cincinnati, Ohio, this past January, where it was covered in the nightly news.

Needless to say, Sutton’s group wants to level the playing field with competitors like Uber and has compiled and cataloged dozens of incidents involving ride-share drivers where people have been killed, robbed, assaulted, kidnapped or raped. Uber, in response, defends its policies and has a record of firing drivers once an alleged infraction is reported.

“Accidents and incidents will always happen. And when it comes to screening, every system has its flaws,” Uber’s safety webpage said. “That’s why we continue to invest in new technologies that help keep riders and drivers safe before, during, and after every ride.”

The bottom line is corporations like Uber, that wrap themselves in the flag of tech innovation, are eroding the public’s ability to protect itself. That’s anything but a new approach; it is rolling back the clock to a more exploitive economic era that took decades of political action to reel in.

Uber is just one example. But as last week’s arrest and charging of a former driver with a litany of sex-related crimes shows, companies that are presenting themselves as being in the vanguard of a new economy are leaving Americans unprotected from their hypercapitalism. The political system keeps tilting the balance toward corporate prerogatives and away from individuals. Is it any wonder that 2016’s electorate is angry, volatile and feeling victimized?

Steven Rosenfeld covers national political issues for AlterNet, including America’s retirement crisis, democracy and voting rights, and campaigns and elections. He is the author of “Count My Vote: A Citizen’s Guide to Voting” (AlterNet Books, 2008).

Photo: Josh Mohrer, Uber’s general manager for New York, speaks to the media while Uber riders and driver-partners take part in a rally on steps of the New York City Hall in New York June 30, 2015. REUTERS/Eduardo Munoz/File Photo

Lyft Drivers, If Employees, Owed Millions More – Court Documents

By Dan Levine and Heather Somerville

SAN FRANCISCO (Reuters) – Drivers who worked for ride-hailing service Lyft in California during the past four years would have been entitled to an estimated $126 million in expense reimbursements had they been employees rather than contractors, court documents show.

Lyft drivers would have recouped an average of $835 each under a standard rate for mileage reimbursement set by the U.S. government, according to the documents, which were made public on Friday and had not been previously reported.

Lyft and larger rival Uber Technologies Inc [UBER.UL] face legal actions from drivers who contend they should be classified as employees and therefore entitled to reimbursement for expenses, including gas and vehicle maintenance. Drivers currently pay those costs themselves.

The new figures, requested by a judge and calculated by attorneys for the drivers based on data supplied by Lyft, provide a rare glimpse into how much ride-hailing services may save by classifying drivers as independent contractors rather than employees.

In a statement, Lyft said a recent survey showed that 82 percent of drivers preferred being classified as independent contractors. The company also called the reimbursement calculation “hypothetical and misleading,” partly because it assumed some drivers would be deemed employees even if they only worked “a handful of hours.”

The judge asked for the estimates as part of his oversight of a proposed settlement of a class-action lawsuit filed by California drivers against the ride service.

More than 100,000 of the 150,602 drivers included in the settlement drove fewer than 60 hours during the four-year period at issue and likely would have made less than $835 each in expense reimbursements had they been considered employees.

Other drivers racked up hundreds of hours and would have been entitled to far more, the documents show. More than 1,500 drivers drove 1,000 hours or more over the four years.

It is unclear how many drivers Lyft has across the country. The company operates in more than 200 U.S. markets and has raised about $1.4 billion to date from investors, including General Motors Co, Andreessen Horowitz and Alibaba Group Holding Ltd. It is valued in the private market at $5.5 billion.

In an interview last week with Reuters, prior to the release of the documents, Lyft President and co-founder John Zimmer said drivers were better served by company programs – with higher payments to drivers who work more, the opportunity to get tips, and access to discounted gasoline – than if they were reclassified as employees.

“It should be understood that this is a specific industry where our average driver is doing 15 hours, and we are trying to create benefits for all drivers,” Zimmer said. “We’ve thought about it from the perspective of all the drivers on the platform. … We are trying to do what is the right legal path, and for us that’s quite clear.”

The Settlement

Lyft agreed to settle the class-action lawsuit in January. Under the proposed deal, Lyft would pay $12.25 million, with drivers receiving an average of $56 each after attorneys’ fees and other expenses, documents show.

During settlement negotiations, attorneys for the plaintiffs said in filings that they believed drivers were entitled to expense reimbursements totaling $64 million, far less than the $126 million they had calculated after being provided with updated Lyft records.

“During these few months since the agreement was negotiated, Lyft has grown substantially (far beyond what Plaintiffs would have predicted at the time they were negotiating),” they wrote.

Based on the updated reimbursement data provided by Lyft, the $12.25 million settlement represents slightly less than 10 percent of the potential value of the claim, they said. Plaintiff attorneys have argued that the deal was a good one for drivers, partly because Lyft would no longer be able to summarily terminate drivers from its system.

The latest figures were submitted in response to questions about the proposed settlement from U.S. District Judge Vince Chhabria in San Francisco, who is expected to consider whether to preliminarily approve the deal at a hearing this week.

Earlier this month five drivers and the International Brotherhood of Teamsters union objected to the proposed settlement, saying it would shortchange drivers by keeping them as independent contractors.

“Plaintiffs have not properly calculated the value of the class’s claims, have not considered the ongoing economic – and public cost – of Lyft’s misclassification scheme,” they wrote.

The Teamsters also filed a complaint against Lyft with the National Labor Relations Board, the federal agency charged with investigating and ruling on unfair labor practices.

Shannon Liss-Riordan, who represents the plaintiffs, said the lawyers also would have preferred that drivers be reclassified as employees, but the risks of continuing the lawsuit were too great. Nothing about the settlement precludes NLRB action, she said.

“Based on the data we reviewed, the vast majority of Lyft drivers have driven very little – even less than 30 hours total for the company, which is why the average amount per driver is so low,” she said.

The data underscores Lyft’s argument that the majority of its drivers are part-time, using the service to supplement other income.

About 83,000 California drivers drove fewer than 30 hours total over the past four years, according to court documents. Of the 150,602 total Lyft drivers covered by the settlement, drivers worked an average of 92 hours each during the four-year period.

 

(Reporting by Dan Levine and Heather Somerville; Editing by Sue Horton, Lisa Girion and Richard Chang)

Photo: Maya Jackson, a Lyft driver from Sacramento, holds a Lyft Glowstache during a photo opportunity in San Francisco, California February 3, 2016. REUTERS/Stephen Lam

Uber Reaches $50 Billion Valuation With New Funding, Report Says

By Heather Somerville, San Jose Mercury News (TNS)

SAN FRANCISCO — Uber has raised another monster round of funding to value the car-booking company at a whopping $50 billion, making it the highest-valued, venture-backed company in the world, according to a report Friday.

Uber, the gorilla of ride-booking apps, has raised close to $1 billion from investors, according a report from The Wall Street Journal. With the fresh round of financing, Uber surpasses Xiaomi to lay claim to the highest valuation among private companies with VC funding. China’s Xiaomi, an electronics company and one of the world’s largest smartphone distributors, is valued at $46 billion.

Uber’s valuation now matches the high-water mark set by Facebook in 2011, when the social network company reached a $50 billion market cap.

With the reported new funding, San Francisco-based Uber, just five years old, has raised more than $5 billion, more than any other VC-backed company. The company had initially planned to raise between $1.5 billion and $2 billion, but closed short of that.

Investors in the latest round include Microsoft and the investment arm of Indian media conglomerate Bennett Coleman & Co., a person familiar with the matter told The Wall Street Journal.

Lyft, the second-largest ride-booking company in the United States, has raised about $1 billion and is valued at $2.5 billion.

The cash flow will likely fuel Uber’s aggressive global expansion, which comes with hefty expenses as the company fights regulators, the powerful taxi industry, and even criminal charges in countries across Asia and Europe. Uber on Friday announced it would invest $1 billion in India over the next nine months to improve operations and expand the number of cities it serves there. Its entry into India has been anything but smooth, and the company has been at odds with authorities in New Delhi since an Uber driver there was accused of rape in December. After the incident, Uber was banned from New Delhi and briefly shut down operations, and the Indian woman who said she was raped sued — one of dozens of lawsuits the company is battling over safety issues and the ways it treats its drivers.

Uber is currently in 58 countries and 311 cities.

Although an impressive sum, the new funding round is far from Uber’s largest. In the first quarter this year, Uber raised $1 billion, nearly 17 percent of the total $6 billion VCs and other funds invested in Silicon Valley, according to data from the MoneyTree Report, a quarterly breakdown of investing by PricewaterhouseCoopers and the National Venture Capital Association, using data from Thomson Reuters. That followed Uber’s $1.8 billion of financing in the fourth quarter last year, which was nearly 28 percent of the total sum — $6.3 billion — invested in the valley during that period, and a $1.2 billion round in the summer of 2014.

Photo: Joakim Formo via Flickr