Hillicon Valley: Uber, Lyft ordered to reclassify drivers | Internal report finds thousands of QAnon groups, pages on Facebook | Twitter enters ring for TikTok
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BIG UBER, LYFT DECISION: A California judge on Monday ruled that Uber and Lyft must classify their drivers as full employees rather than independent contractors, a ruling that if upheld could represent a significant loss for the ride-sharing giants.
The San Francisco Superior Court judge is giving the companies a ten-day window to file appeals before the injunction takes effect, and spokespeople for both told The Hill they will be doing so.
The case forcing Uber and Lyft to comply with AB 5, a landmark law requiring companies to classify their workers as full employees if the firm has control over how they perform tasks or if the tasks are a routine part of the company’s core business, was brought by California Attorney General Xavier Becerra and a group of city attorneys.
“Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities,” Becerra said in a statement to The Hill Monday. “We’re going to keep working to make sure Uber and Lyft play by the rules.”
In his decision, county judge Ethan Schulman agreed with Becerra’s case that both Uber and Lyft were violating AB5 by continuing to classify drivers as contractors.
“It’s this simple,” he wrote in his ruling, “Defendants’ drivers do not perform work that is ‘outside the usual course’ of their business. Defendants’ insistence that their businesses are ‘multi-sided platforms’ rather than transportation companies is flatly inconsistent with the statutory provisions that govern their businesses as transportation network companies, which are defined as companies that ‘engage in the transportation of persons by motor vehicle for compensation.’ ”
Veena Dubal, associate professor of law at the University of California, Hastings called the decision “incredible, probably the most important one that has come out globally.”
“California is such a huge market for them and… the judge made such clear legal statements about how this is not a technology company but a transportation company and they are clearly in violation of the law,” she told The Hill.
Both Uber and Lyft have resisted the law since it went into effect this January, arguing that their core business is technology platforms rather than ride-hailing.
If their appeals ultimately fail, both companies could have to provide drivers with basic labor rights like overtime pay and health insurance that they are not currently entitled to.
UBER’S CEO GETS AN OP-ED: Uber CEO Dara Khosrowshahi is calling for a set of new laws providing more benefits for independent contractors without designating them as employees.
In a New York Times op-ed published Monday, the head of the ride-hailing service called the current employment system “outdated and unfair” and acknowledged that the gig economy doesn’t offer enough protections for its workers.
“Many of our critics … believe that Uber and our gig economy peers have failed drivers by treating them as contractors, and that we will do anything to avoid the cost of employee benefits like health insurance,” Khosrowshahi wrote. “Given our company’s history, I can understand why they think that. But it’s not true, and it’s not what I believe.”
Khosrowshahi claimed that the employment system in the U.S. offers a “false choice” that makes workers pick between independent work that offers more flexibility and little benefits or full-time employment that offers little flexibility and basic protections.
“There has to be a ‘third way’ for gig workers,” Khosrowshahi said, proposing laws requiring gig economy companies to establish “benefits funds” that offer cash to workers for benefits including health insurance or paid time off.
Had such a requirement been the law in every U.S. state, Uber would have have contributed $655 million to the fund in 2019 alone, Khosrowshahi noted.
He added that states should be mandated to provide medical and disability coverage for injuries incurred on the job. He also noted that Uber would be more transparent about how much drivers earn and create more procedures to handle contractors’ concerns.
Uber and other gig economy companies have come under growing scrutiny in recent years over employee classifications. Attorneys general in Massachusetts and California filed separate lawsuits against Uber and Lyft, a rival ride-hailing service, earlier this year, alleging that their independent contractor designations were illegal.
INTERNAL FB REPORT FINDS QANON RAMPANT: An internal Facebook investigation uncovered thousands of groups and pages with millions of members and followers supporting the QAnon conspiracy theory, NBC News reported Monday.
According to the report, the top 10 groups had more than a million members between them while the remaining groups and pages pushed the total figure past 3 million.
However, the report did not make clear how many users were members of multiple pages.
The Hill has reached out to Facebook for comment on the reported results.
The QAnon theory posits that President Trump and the military are working together to expose a shadowy cabal of figures in media, entertainment and politics that currently run the world and a massive child trafficking scheme.
The theory, which has evolved to include dozens of other conspiracies under its wide umbrella, has grown massively online in the last few years on places like Facebook.
The FBI labeled the loose community a potential domestic terror threat last year.
QAnon has entered the mainstream this last year, with multiple Republican Congressional candidates that have expressed support for the theory winning their primaries.
TWITTER INTERESTED IN VINE… I MEAN TIKTOK: Representatives from Twitter have approached the Chinese firm that owns TikTok to express interest in acquiring the U.S. operations of the popular short-form video app, according to multiple reports.
It remains unclear whether Twitter would move forward with a potential deal, people familiar with the matter told Reuters. It is also said to be uncertain whether the San Francisco-based company has the means to finalize a deal by the time President Trump’s executive order restricting the use of TikTok in the U.S. goes into effect.
Microsoft, a company far bigger in size and market capitalization than Twitter, said earlier this month that it would pursue an acquisition of TikTok’s U.S. operations. It is considered the favorite to score a deal, The Wall Street Journal reported.
Twitter declined to comment. TikTok did not immediately return a request for comment from The Hill.
Trump last Thursday signed executive orders imposing broad sanctions on ByteDance, the Chinese parent company of TikTok, and the Chinese owners of the messaging app WeChat. The move, which marked the latest escalation in the increasingly fractious relationship between the U.S. and China, set a deadline of Sept. 15 for an American company to acquire TikTok before a ban goes into effect.
The executive order stated that TikTok posed a national security risk, given its relationship with a Chinese firm and local laws in the country that allow for the seizure of user data. TikTok has strongly pushed back against suggestions that China can gain access to Americans’ data through the app.
AMAZON EYEING RETAIL SPACE: Amazon and the largest mall owner in the U.S. are reportedly in talks to use space formerly used by department stores for the online retail giant’s fulfillment centers.
Amazon and Simon Property Group have discussed converting former and current J.C. Penney and Sears locations, according to The Wall Street Journal, which cited unidentified sources. Dozens of locations for both stores are set to close after both chains filed for Chapter 11 bankruptcy, the Journal noted, adding that Simon currently owns malls with 11 Sears and 63 J.C. Penney stores, according to May public filings.
The coronavirus pandemic has only accelerated the financial problems malls have faced for years, even after large indoor spaces reopened in several states. By contrast, Amazon reported its all-time best quarter for sales this year as customers increasingly relied on it for shopping.
Big box department stores are often the largest retail spaces in malls, and are frequently a source of traffic flow to smaller tenants. However, Simon’s other tenants would likely not lead to much added foot traffic, and many landlords have instead opted to replace department stores with businesses such as gyms or theaters. Those institutions, however, have also been affected by the pandemic and are not in a position to expand, the newspaper noted.
Lighter click: I’m proud of them
An op-ed to chew on: SpaceX is building the road to the moon and Mars in Texas
NOTABLE LINKS FROM AROUND THE WEB:
The man Google loves to hate (Politico / Leah Nylen)
Here’s How Professional Union Busters Talk About ‘Woke’ Tech Organizers (OneZero / Sarah Kessler)
Google rival’s study urges letting mobile users pick search defaults (Axios / Ashley Gold)
The big legal questions behind Trump’s TikTok and WeChat bans (The Verge / Adi Robertson)
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