DoorDash stock takes off as IPO price starts trading at $182 per share – CNET


DoorDash, the biggest US food delivery company, began trading on Wall Street on Wednesday.

Gabby Jones/Bloomberg via Getty Images

DoorDash saw its share price skyrocket by 78% after it rang the opening bell for the New York Stock Exchange on Wednesday with its Wall Street debut. The company's shares started trading at $182 apiece, far higher than the $102 initial public offering price it set on Tuesday evening. And much more than the $75 to $85 target range it initially set last month.

Earlier this year, DoorDash was privately valued at about $16 billion. Now, as a publicly traded company, its valuation is around $57.8 billion, according to CNBC. While the company is not yet profitable, investors say its massive growth shows promise. In filings with the US Securities and Exchange Commission last month, DoorDash reported revenue gains, decreases in losses and a rising supply of customers, merchants and delivery workers.

"If we can make possible the delivery of ice cream before it melts, or pizza before it gets cold, or groceries in an hour, we can make the on-demand delivery of anything within a city a reality," DoorDash CEO and co-founder Tony Xu wrote in a letter included with the filing.

The past few months have been booming for DoorDash, as the coronavirus has caused people around the world to shelter-in-place and stay indoors. The San Francisco-based company, founded in 2013, has gained millions of customers who avoid going to restaurants and instead order their meals through the platform. Taking advantage of this timing, DoorDash has expanded from just restaurant deliveries to grocery, pet store and convenience store deliveries too.

DoorDash says it now has more than 18 million customers, partners with more than 390,000 merchants and has more than 1 million delivery workers on its platform.

DoorDash's business isn't without risk, however. In its federal filing, the company said it faces fierce competition from companies like Uber and Grubhub. DoorDash also said its operations could be hurt if its delivery workers -- or Dashers, as the company calls them -- are reclassified as employees. That would mean it'd be beholden to payroll and benefits costs, as well as any discrimination claims or employee benefit claims that may arise. 

Another risk factor to its business, DoorDash said in the filing, is its ability to "cost-effectively attract and retain Dashers." The company added that "negative perception of our platform or company may harm our reputation, brand, and local network effects." Last month, the company settled a lawsuit for $2.5 million with the attorney general of Washington, DC, over allegedly deceptive business practices where it withheld tips from delivery workers.

"We're pleased to have this issue behind us," a DoorDash spokeswoman told CNET at the time.

DoorDash began trading on the New York Stock Exchange on Wednesday under the symbol DASH. Goldman Sachs and JPMorgan Chase led the IPO.

Now playing: Watch this: Food delivery apps compared: DoorDash vs. Uber Eats


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Uber and Lyft can pay drivers more without raising rates for riders, report says – CNET

Angela Lang/CNET

In 2018, New York became the first city in the US to require Uber and Lyft to pay their drivers a minimum wage. After studying the effects of the mandate, economists released a report Tuesday that says the policy ended up raising driver pay without significant fare increases going to riders.

When regulators first suggested implementing the pay rules, Uber and Lyft pushed back against the city, saying such a move would "lead to higher than necessary fare increases for riders." But the findings from the report Tuesday, titled New York City's Gig Driver Pay Standard: Effects on Drivers, Passengers, and the Companies, tell a different story.

Combing through data from 500 million trips from 2018 and 2019, economists from the University of Chicago, The New School and the University of California at Berkeley found that drivers' pay increased by about 9% or $1.33 per trip, in 2019. And at the same time, passenger growth continued and wait times fell. Some of these same economists were hired by New York to study the viability of a minimum pay standard before it went into effect.

"The first year of experience under the New York City driver pay standard (before the pandemic) shows that driver pay rose, more efficient use was made of drivers' time, passengers paid a little more but waited a minute less on average for a car to arrive," said James Parrott, one of the authors of the report and a director at the Center for New York City Affairs at The New School. "While the companies' commission rate declined, they still made a lot of money from their app-dispatch business."

Uber and Lyft have long been able to pay drivers what they wanted and to change pay rates when they wished. That's because drivers are classified as independent contractors and don't have the same labor protections as employees. But now regulators in various states, including New York, Washington and California, have begun looking into more pay protections for drivers.

Seattle passed a minimum wage for drivers last summer, and California passed a state law in 2019 to classify drivers as employees, which would guarantee them the minimum wage. Uber, Lyft and other gig economy companies were exempted from that law in California, however, after launching a $205 million ballot measure campaign that ended in November. Californians ultimately voted with the companies to keep drivers classified as independent contractors.

Parrott and the other economists' say in their report that if drivers are given more protections, the results won't necessarily hurt riders. They companies, however, may take a small hit. The economists estimated that Uber and Lyft's commission rates declined in New York from 15% in June 2018 to 12.5% a year later.

An Uber spokesman said New York's policy did lead to an increase in fares for riders the first year it was in effect. He also said the pay rules forced Uber and Lyft to restrict how many drivers could be on the apps, which led to driver protests against the companies.

"In just the first year of the rule's implementation fares increased, tens of thousands of drivers lost reliable access to the app and there were massive driver protests against the law," the spokesman said. "It's not surprising that the same people who created the rule now have a study showing how successful it was, but the facts show otherwise."

The spokesman pointed to a January article in the New York Times that shows some airport trips in the city have cost as much as $120. The article cites the main reason for the high fares as Uber and Lyft raising their prices after having "artificially cheap" ride fares in the years before they became publicly traded companies.

While the economists who authored the report on Tuesday said New York was a unique city to study since they were provided so much data from local regulators, the lessons learned there could still apply to other cities.

Lyft declined to comment.

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Uber’s national push over gig worker status has been underway for months – CNET


Over the last year, Uber drivers protested several times in front of the company's headquarters, demanding more worker protections.

James Martin/CNET

Jason Schaal was sitting at home in Minneapolis last month when he opened his phone to check his email. Among the messages was one from Uber bearing the subject line, "Make your voice heard." It said the US Department of Labor was hammering out countrywide rules "to determine the independent status of gig workers" and asked Schaal to comment on the plan. As an Uber driver, Schaal said he found the persuasive tone of the email unsettling.

"One of the top reasons you drive with Uber is the flexibility," read the Oct. 22 email, which was seen by CNET. It asked Schaal to share a few sentences about being an independent contractor, giving prompts like "the ability to balance other jobs" and "earn extra money as a student, caretaker or retiree."

Schaal, who does full-time gig work for Uber, Lyft, Instacart and Shipt, clicked the link in the email, which took him to a comment page on the Department of Labor's website. He opted not to leave feedback.

"As I read that email, one of the impressions I got is that Uber is going to put their spin on things," Schaal said during a phone interview. "It's almost manipulating to persuade drivers to comment with Uber's point of view."

The timing of Uber's message was no coincidence. It came 12 days before the ride-hailing company's big victory in California, where it and other gig economy companies spent $205 million to convince voters to approve its Proposition 22 ballot measure. The measure ensures that drivers in the state are classified as independent contractors, rather than employees, sidestepping the need for companies to provide benefits like health insurance. The companies hope to replicate their ballot box success across the country, and they've already been plotting their national push.

Spokespeople for Uber, Lyft, Instacart and DoorDash confirmed to CNET that the companies are planning to bring their Proposition 22 model nationwide, saying that's what gig workers want.

The emails to drivers like Schaal represent just one element of Uber's broader strategy to go countrywide. In August, the company published a white paper outlining "priorities for industry and government action" on gig worker classification state by state. That same month, Uber released findings from a nationwide survey it commissioned on what drivers and voters think about workers being classified as independent contractors. The company has also hired a record number of federal lobbyists and created an information portal for drivers titled "Together, we can reinvent independent work."

Now, with the California vote showing it's possible to beat laws and regulators with a lot of money and groundwork, Uber and its gig economy companions have hit the ground running in the rest of the country. Emboldened by the Proposition 22 win, Uber and Lyft said they've been reaching out to unions, state regulators, governors and federal officials. The companies say California could serve as a template for how gig workers should be classified nationwide.

"Going forward, you'll see us more loudly advocate for new laws like Prop 22," Uber CEO Dara Khosrowshahi said during an earnings call earlier this month. "It's a priority for us to work with governments across the US and the world to make this a reality."

On Wednesday, Uber, Lyft, Instacart, DoorDash and Postmates launched a coalition out of Washington, DC, called the App-Based Work Alliance. The aim, the coalition says, is to "preserve worker independence." It points to Proposition 22's passage and says it will educate state officials on independent work and "promote federal policies that support the growing on-demand economy and urge Congress to think more ambitiously when it comes to modernizing our nation's labor laws."

The gig economy companies say this battle is existential. If they're required to classify drivers as employees, the companies will have to pay for drivers' health insurance, minimum wage and sick leave -- adding high costs that the companies say could hurt their bottom lines. Uber, Lyft and DoorDash aren't yet profitable. According to Uber, about 7 million people in the US did gig work for at least one of the companies in 2019, with about 1 million of them working for Uber.

As for gig workers, many say they need more labor protections from the companies. They say they struggle to pay rent and doctor bills, and to put food on the table, according to a survey by the Institute for Social Transformation at the University of California, Santa Cruz. Drivers and labor activists who opposed Proposition 22 say they too are planning to take their battle nationwide.

"The big platform companies may have won in California, but the gig worker fight has only just begun," said Brendan Sexton, executive director of the Independent Drivers Guild, which represents 800,000 ride-hail drivers in New York, New Jersey and Connecticut. "California's experience should light a fire under pro-worker state legislatures across the country."

Captive audience

Schaal had been off work for five days when he got the email from Uber. He was home because he was waiting for results from a COVID-19 test after he'd been possibly exposed to the novel coronavirus while doing a gig job for Shipt, a delivery company owned by Target. He said he was already anxious about not making money that week, and the email just added to his worries.

"It just came out of the blue," Schaal said. "I don't see any net positive effect of allowing the companies to force the definition of what we are down our throats."

Uber used the direct-message tactic to also lobby support from drivers during the Proposition 22 campaign. Both Uber and Lyft bombarded drivers and passengers, stumping for the proposition and saying job flexibility would be lost and prices would skyrocket if drivers became employees.

"You can change the narrative based on the degree to which you're being responsive to your users -- all through an app. That is a marketing goldmine," said David McCuan, a political science professor at Sonoma State University. "That is the power of Big Tech."


Instacart and DoorDash also brought the ballot measure campaign to customers, asking delivery workers to insert pro-Proposition 22 stickers into customers' orders and use takeout bags branded with the phrase "Yes on 22."


Uber's messages to California drivers included asking them to record 30- to 60-second videos of themselves describing why flexibility is important. But that campaign brought backlash. Drivers filed a lawsuit against Uber in October alleging they feared retaliation if they didn't participate in the company's in-app surveys. In response, Uber told the court it would stop political polling on the app in California. A judge later rejected the lawsuit.

Other tech heavyweights have used similar strategies in the past, but not to the scale of the gig economy companies. Earlier this year, Google tried to stamp out a bill in Australia that would require it to pay local news outlets. The company wrote an open letter to users arguing the bill would make search "dramatically worse," then linked to the letter on its Australian homepage. 

In 2012, internet companies protested against the Stop Online Privacy Act and the Protect IP Act, two bills the tech industry saw as threatening to free expression and innovation. Google blacked out the corporate logo on its iconic home page and, if someone clicked on it, sent users to a "End Piracy, Not Liberty" petition. Mozilla did the same with its Firefox browser. Wikipedia shut down for 24 hours, instead only showing a darkened page that said "Imagine a World Without Free Knowledge."

The gig economy companies' win on Proposition 22 could inspire other tech companies to take advantage of captive audiences. But giants like Google and Facebook probably won't overuse their platforms as soapboxes, says Jack Poulson, founder of watchdog nonprofit Tech Inquiry. Those bigger companies are more likely to use lobbyists to get out their messages. Though Uber uses lobbyists as well, Poulson says, it's much more freewheeling with its public image.

"With Uber, their brand has been through the mud," said Poulson. "They take a bit of a mercenary tone."

The 'third way'

Uber has been laying the groundwork for its national push on gig worker status over the past couple of years, but in late March it made a splash bringing its idea to the public.

As the coronavirus raged across the country, Uber CEO Khosrowshahi sent President Donald Trump a letter seeking help. He began the three-page letter asking the government to include independent contractors in its economic stimulus package. He then laid out his case for changing labor laws to create what he called the "third way."

The idea, he said, is to invent a new category of workers who'd be classified as independent contractors but get a few more perks. He implied that current labor laws could end up hurting gig economy companies, saying, "each time a company provides additional benefits to independent workers, the less independent they become; and, without legislative clarity, the more uncertainty and risk the company bears."

Since then, Uber has expanded on its "third way" plan with its white paper, nationwide survey and a New York Times op-ed by Khosrowshahi discussing the new worker model. The 18-page white paper says it's intended to encourage dialog among a wide range of stakeholders and emphasizes the "urgent need for new high-quality independent work." The paper outlines Uber's plan to work with governments to give independent contractors some benefits that employees already have, such as accident insurance and protection under discrimination laws.

"In the early days, at least in this generation of startups, the founders didn't take politics seriously," said Bradley Tusk, Uber's first political advisor and CEO of consulting firm Tusk Strategies. "That's changed."

In the first half of 2020, Uber hired a record number of 40 lobbyists and spent $1.2 million lobbying the federal government, according to Open Secrets. Lyft also shelled out more than it had in the past for federal lobbying, spending $760,000 and hiring 36 lobbyists in the first half of the year.

Though Uber and Lyft have been laying the groundwork to change labor laws federally, Tusk said that may be an uphill battle under the administration of Democratic president-elect Joe Biden. Both Biden and Vice President-elect Kamala Harris publicly opposed Proposition 22. And since getting elected, Biden has promised to tackle gig economy companies that classify workers as independent contractors.

"This epidemic of misclassification is made possible by ambiguous legal tests that give too much discretion to employers, too little protection to workers, and too little direction to government agencies and courts," reads Biden's plan on worker empowerment.

An easier path for the "third way" would be a state-by-state option, Tusk said. An Uber spokesman told CNET the company is in talks with lawmakers in states across the country but declined to specify which ones. "We are pushing to give drivers new benefits and protections in other states -- a proposal that drivers nationwide strongly support," the spokesman said.

It's unclear if lawmakers in Minnesota, where Schaal lives, are meeting with the gig economy companies. The only information Schaal said he's received from Uber was the email urging a federal plan.

Schaal said he went back to work doing deliveries and giving rides after his COVID-19 test came back negative. He's not sure what the right approach is on defining gig workers, but he's certain that safeguarding workers' rights is crucial and government officials should take that into account when changing any laws.

"More and more we are at this crossroads where we are defining the next class of American worker," Schaal said. "We need to make sure we have certain rights and protections."

CNET's Richard Nieva contributed to this report.

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Airbnb files for IPO, shows it can actually make a profit – CNET


Airbnb CEO Brian Chesky at a company event in 2018.

James Martin/CNET

Airbnb has filed paperwork for its initial public offering that shows, unlike other tech unicorns, it's been profitable in several quarters over the last couple of years. The revelation was included in the short-term rental company's 250-page filing with the US Securities and Exchange Commission on Monday.

During the third quarter of this year, Airbnb made $219 million in profit on revenue of $1.34 billion. Despite the positive outlook, those numbers are down nearly 19% from the same time last year when it reported $227 million in profit on revenue of $1.65 billion. The third quarter is the only quarter Airbnb made a profit so far this year. 

The company said the reason for this is largely due to the hit it took as the novel coronavirus pandemic has ravaged travel destinations and people have adhered to shelter-in-place mandates.

"Our financial results for the first nine months of 2020 were materially adversely affected," Airbnb wrote in its filing. "We expect that COVID-19 will continue to materially adversely impact our bookings, revenue and business operations in future periods."

Airbnb said bookings on its platform fell by 72% in April from the year before. But, in June through September, the company said it began to see a rebound with bookings down around 20% from the year prior. To mitigate those losses, Airbnb laid off 1,900 employees, 25% of its staff, in May. It also raised $2 billion in debt funding in April. 

Airbnb has gone from a website for couch surfers to having a massive online presence in just over a decade. It lists millions of homes for rent in nearly every country on Earth. But it's been a bumpy road for the company as it's seen scrutiny from city regulators and battles with local governments from San Francisco to New York to London.

"We are subject to a wide variety of complex, evolving, and sometimes inconsistent and ambiguous laws and regulations," Airbnb wrote in its filing. "And that could cause us to incur significant liabilities including fines and criminal penalties."

Though it's worked out deals with regulators in many cities, it's had to scale back its offerings and adjust to new rules, such as requiring hosts to register with cities and limits on how many nights a year people can rent out a home. 

That means Airbnb has needed to rethink its business to stay competitive with hotels and similar sites like VRBO vacation rentals. In its filing, the company listed Bookings Holdings, Expedia Group, Google, TripAdvisor, Craigslist and various hotel chains as its competitors.

Over the past couple of years, it's expanded from offering homes for short-term rentals to letting travelers book day trips and restaurant reservations. It's also partnered with major landlords in CaliforniaFlorida and New York that allow for Airbnb rentals through their buildings -- although some of those deals have fallen through.

Among the risks Airbnb listed in its filing is dangerous activity. The company acknowledged there have been shootings, fatalities, incidents of sexual violence and undisclosed hidden cameras on its platform. It also recognized that racial discrimination has been an issue. The company said it's taken several steps to combat this, including creating the "Airbnb Nondiscrimination Policy," which every host and guest must sign to use the service. 

"If a host or guest does not agree to the policy, they are removed from our platform," Airbnb said. "Since 2016, approximately 1.4 million people have been removed from Airbnb for declining to agree to this policy."

Airbnb is the latest private company valued at more than $1 billion, aka unicorn, to head to Wall Street. Ride-hailing companies Uber and Lyft went public in 2019 and food delivery service DoorDash just filed it's IPO paperwork on Friday. None of these other three companies have yet proven to be profitable. 

Along with the third quarter of this year, Airbnb reported profits during the second and third quarters of 2018 and the third quarter of 2019. Though it warned in its filing that full profitability isn't assured. 

"We have incurred net losses in each year since inception, and we may not be able to achieve profitability," Airbnb said. "Our revenue growth rate has slowed, and we expect it to continue to slow in the future."

The company plans to trade on the Nasdaq under the symbol ABNB.

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Uber, Lyft still sapped by COVID pandemic, plus 4 other takeaways this quarter – CNET


Uber and Lyft see revenue drops and massive net loss. 

Angela Lang/CNET

Uber and Lyft have seen their rides businesses plummet over the last several months, largely because of the coronavirus pandemic. And based on the companies' third-quarter earnings, it doesn't look like that's changing. But with Uber and Lyft maintaining an optimistic tone and promising profitability in the not-so-distant future, stock prices have shown only modest drops, ranging from decreases of 2% to 5%.

"It's hard to believe that it's been eight months since I first spoke with you about the coronavirus pandemic," Uber CEO Dara Khosrowshahi said during the company's earnings call last week. "Without question, its impact on the world has been one of the most significant events of our lifetimes. And we moved quickly as a company to respond."

Lyft's executives expressed a similar sentiment in their company's earnings call Tuesday and said they're seeing Lyft's rides business pick up in many cities across the US, along with growth in its scooter and bike rental businesses.

Both Uber and Lyft also touted their big political win in California. Along with several other gig economy companies, they sponsored a state ballot measure, Proposition 22, to ensure they could classify drivers as independent contractors, rather than employees. After those pushing the measure spent $205 million on the campaign, the proposition passed with 58% of the vote.

"We believe the outcome in California is a win, win, win," Lyft CEO Logan Green said during the company's earnings call. "Beyond California, we're continuing to engage with policy makers across the country."

Here are five takeaways from the two ride-hailing companies' third-quarter earnings:

Falling revenue and lots of loss

Both Uber and Lyft saw big drops in revenue. Uber's revenue fell by 18% compared with the same period last year, and Lyft's decreased by 48%. Both companies also saw big net losses, with Uber reporting a $1.1 billion loss from July to September and Lyft announcing a $459.5 million loss in the same period.

Proposition 22 win

Despite the losses, both companies spent big over the last few months in California. Uber contributed about $59 million to the Proposition 22 battle and Lyft threw in about $49 million. It all started last fall, when the state passed law AB5, which required the companies to reclassify drivers as employees and provide those workers with labor protections. Both companies said such a reclassification and added costs could decimate their businesses. So, Uber and Lyft took the issue to voters. Their Proposition 22 campaign, which blanketed the state in ads, text messages and mailers, was the most expensive ballot measure campaign in California history.

"It's a distinct, clear and decisive win that's a turning point in the conversation," John Zimmer, Lyft's president, said in the third-quarter earnings call. "I believe strongly that other states, as well as policy makers, will see this as a watershed moment."

Not a lot of riders

Along with falling revenue, both Uber and Lyft have seen a significant decrease in riders on their platforms over the past few months. The companies attribute that to the coronavirus pandemic, with people still sheltering in place and not traveling around like they used to. Uber's active monthly riders fell by 24% compared with the same time last year and Lyft's dropped by 44%. Though those numbers appear significant, both companies reported an uptick in passengers using their service over the previous quarter. Lyft, for example, reported a 44% increase in active riders from the second quarter to the third quarter.

"The Gig Economy has been in the eye of the dark COVID-19 storm with ridesharing stalwarts Uber and Lyft seeing consumer demand coming to a screeching halt as the global lockdown went into effect in early March," Daniel Ives, Wedbush analyst, said in a statement. "However, since then we have seen ridesharing pick up modestly and slightly quicker than Street expectations."

Food delivery on the rise

As folks hunkered down at home this year and used ride-hailing services less, some people started ordering more meals and groceries from Uber's food delivery business, Uber Eats. The company reported that Uber Eats gross bookings grew by 135% compared with the same period last year. During its earnings call, Uber said customers still continued to use Uber Eats even in places where coronavirus restrictions had eased.

Lyft doesn't have a distinct food delivery service on its platform, but it has branched out from its core transportation business during the pandemic. In October, it partnered with food delivery service Grubhub to bring restaurant meal deliveries to people who belong to Lyft's membership program, Lyft Pink. The company's vice president of marketing, Heather Freeland, said at the time, "We heard from our riders that food delivery was a benefit they wanted, so we went to work to make it happen." 

Still not profitable

Despite an emphasis on food delivery, neither Uber nor Lyft is profitable. Even Uber Eats as a stand-alone business isn't yet profitable. And neither company has ever been fully profitable, (although Uber's rides business has been profitable on an adjusted basis). However, during their third-quarter earnings calls, both Uber and Lyft told investors they were on track to reach their target goal of full profitability (on an adjusted basis) before the end of 2021.

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Apple says its new MacBook Air has a 15-hour battery life – CNET


The new MacBook Air comes with faster processing speeds and a longer battery life.

Screenshot by CNET
This story is part of Apple Event, our full coverage of the latest news from Apple headquarters.

Gone are the days when a laptop charge would only last a few hours. Apple on Tuesday said that its new MacBook Air will have 15 hours of battery life for wireless web browsing. For video playback, the battery will last 18 hours. And the battery life on video calls will be twice the rate on current MacBook Air computers.

The tech giant made the announcement during a virtual event centered on its computers. The focus was on the new M1 chips integrated into Apple's new Mac lineup. The big difference with these M1 chips is that they're designed by Apple, rather than Intel, the company's previous supplier. Apple says its M1 chips are more power efficient, allow for slimmer designs and longer battery life.

Now playing: Watch this: Apple reveals first MacBook Air with new M1 chip


"M1 delivers significantly higher performance at every possible level," Johny Srouji, Apple's senior vice president of hardware technologies, said during Apple's event. "This is a big deal."

Apple has been working on these chips for more than a decade. They're already in iPhone, iPad and Apple Watch products, but this is the first time the company has added its own chips to its Mac lineup. By combining all its devices under the same chips and common code, Apple aims to offer the same experience across all of its products.

Along with the MacBook Air getting a longer battery life, Apple said Tuesday that its new Mac Mini and 13-inch MacBook Pro will also come with the M1 chip and see many more hours of battery. For instance, the 13-inch MacBook Pro will have wireless web browsing for 17 hours or video playback for 20 hours, that's 10 hours longer than its predecessor.

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Uber rolls out Reserve, letting riders book trips 30 days in advance – CNET


Uber's latest feature is a reserve-in-advance ride service.

Angela Lang/CNET

Uber is now letting riders book a trip in advance with a new feature called Uber Reserve. The ride-hailing company says the idea is to make it as easy as possible for people to manage their schedules. Uber Reserve is different from the company's scheduling feature in that it now has a dedicated place on the app's home screen and lets people book up to 30 days in advance.

Uber had already been working on Reserve when the novel coronavirus pandemic struck in March. But the company said it sped up development of the feature since then because it saw an uptick of scheduled trips.

"Uber's customers tell us that planning ahead lets them know what to expect," Geoff Tam-Scott, Uber's product lead for rides, said in an interview. "Time is really at a premium now."

The pandemic has taken a hit on Uber's rides business and the company has been working to create more revenue streams. During its third quarter earnings last week, Uber reported an 18% drop in revenue over last year. Its delivery business, however, has seen a surge in use. Uber Reserve could be another play by the company to offer something different to passengers.

The reservation service lets riders book their trip and see their fare instantly. It'll also match passengers with a driver up to seven days in advance. If riders like a certain driver, they can select them as a favorite for upcoming rides. On the driver side of things, Uber said doing reservation rides can also help them more easily manage their schedules.

For passengers, Uber guarantees the driver will be at the meeting point at the exact scheduled time. If not, the company will give the rider a $50 redemption credit. The passenger is given 15 minutes of leeway to make it to the ride.

"Our new technology aims to have your driver there on the dot," Tam-Scott said. "Your driver will be there waiting for you, rather than you waiting for your driver."

Uber Reserve comes with an additional flat fee that differs city to city. It's typically between $8 and $12. Drivers will get a 72% cut of this fee, while Uber takes the other 28%. If a passenger cancels the trip within an hour of pickup, they'll still have to pay the full fare.

Uber Reserve will roll out on its premium services Uber Black and Black SUV to about 20 US cities next week, including Atlanta, Chicago, Houston, Las Vegas and Seattle. It'll add new US cities in coming weeks and international cities in coming months. And Uber will bring reservations to its middle-tier services UberX, Comfort and XL by the end of the year.

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Uber and Lyft’s Proposition 22 passed, but that’s just the beginning – CNET


Ride-hail drivers and labor advocates have held several protests against gig economy companies over the years.

Dara Kerr/CNET

The possibility of gig workers being classified as employees in California is over. Uber, Lyft and other gig economy companies declared victory on Wednesday after pouring more than $205 million into their effort to have voters pass Proposition 22, a ballot measure they authored that exempts them from a state law requiring them to treat workers as employees.

Neither side, however, says the struggle is over, even if the campaign is.

"We always knew that the fight for gig workers' rights was going to be a long one," said Cherri Murphy, a former Lyft driver who organizes for Gig Workers Rising, a driver advocacy group. "They may have won this round, but we're in this for the long haul."

The issue of gig worker classification goes back to 2013, when Uber and Lyft were targeted in several lawsuits that sought more protections for workers. The companies settled those suits by offering concessions to workers, though not reclassifying them as employees.

California also tried tackling gig worker classification by passing a law last year, known as AB5, which requires some companies to reclassify independent contractors as employees. After the law was signed, several gig economy companies said the law could hurt their businesses with added costs, so they fought back with Proposition 22. The ballot measure creates an alternative to the employment model and is framed as a way to maintain independent contractor classification, while also bringing a few more protections

"California voters agreed that instead of eliminating independent work, we should make it better," an Uber spokesman said in a statement Wednesday.

Lyft and DoorDash signaled they're prepared to bring the alternative employment model to other states.

"Lyft stands ready to work with all interested parties, including drivers, labor unions and policymakers, to build a stronger safety net for gig workers in the US," Anthony Foxx, Lyft's chief policy officer, said in a statement Wednesday.

DoorDash CEO Tony Xu said, "Now we're looking ahead and across the country, ready to champion new benefits structures that are portable, proportional and flexible."

Expected to be a closer race, Proposition 22 won with an overwhelming 58% of the vote in California. Exit polls showed that 40% of people who voted yes on the ballot measure believed they were supporting gig workers in getting a living wage.

During the campaign, with their multimillion-dollar war chest, the companies blanketed the state in ads, mailers, emails and text messages. They hired roughly two dozen political consultants known for no-holds-barred tactics. Those tactics included digging up dirt on labor activists, paying drivers to appear in tug-at-your-heartstrings advertisements and hiring firms to conduct studies with favorable data for the campaign.

Proposition 22's win appeared to please investors, with Uber and Lyft rallying at least 15% and 18%, respectively, on Wednesday.

For the gig workers and labor activists who opposed the ballot measure, however, the results of the campaign were chilling.

"We are deeply concerned about the result of Prop 22, which threatens to create a class of workers scraping to get by," Lena Simet, senior poverty and inequality researcher at Human Rights Watch, said in a statement on Wednesday. "We'll continue to closely monitor and document the impact of Prop 22 and the policies and practices of gig companies on workers' rights and livelihoods."

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Uber and Lyft win major victory as Proposition 22 passes – CNET


Uber and Lyft drivers have long rallied to be classified as employees. 

James Martin/CNET

California voters voted Tuesday to pass Proposition 22, a ballot measure backed by Uber, Lyft and other gig economy companies. During the yearlong battle over the initiative, which aims to exempt the gig economy companies from classifying their drivers as employees, millions of dollars have been spent and all sorts of tricks have been pulled from the political playbook.

Proposition 22 is likely to have national implications as other states watch what happens in California, the home of Silicon Valley tech giants. If Proposition 22 had failed, they may have been forced to rethink their business models. Now the ballot measure has passed, companies can use the campaign as a blueprint for similar fights they're waging in other states and countries.

Early polling showed a close race for the ballot measure, with 46% of voters backing the proposition and 42% opposed. The initiative needed 50% of the vote to win. As of Wednesday morning, the bill appeared to have passed with 58% of the ballot, according to the California Secretary of State's Office.

Uber, Lyft, DoorDash, Instacart and Postmates contributed more than $205 million to the campaign, with a last minute $1 million more from Uber on Monday. The No on Proposition 22 campaign was backed with about $19 million from labor groups and unions. The initiative has become the most expensive ballot measure campaign in California history and one of the most expensive in US history, according to Ballotpedia.

At stake is whether the gig economy companies will be required to reclassify their workers as employees, as mandated by California law AB5. If classified as employees, workers would get labor benefits, such as health care, sick leave and minimum wage. But the companies say that would add tremendous costs to their businesses. Proposition 22 suggests creating an alternative where drivers remain independent contractors and will get a few more benefits, like an expense reimbursement and health care subsidy.

The No on Proposition 22 campaign says that's not enough. It says drivers still might not make minimum wage and that the health care subsidy needs to be more substantial, especially during the coronavirus pandemic. When calculating paid time for workers, Proposition 22 only takes into account when they're on a ride or delivery. It doesn't add in when they're waiting to be matched with a customer.

"Over the past years, Instacart has hired so many new shoppers that I often don't get any orders," Ginger Anne Farr, an Instacart shopper, told Human Rights Watch in a paper released Monday. "I would sit in my car waiting for an order to appear, without making any money." 

Final flurry of activity

As Election Day neared, both sides of the Proposition 22 campaign went all-in.

Uber, Lyft and the Yes campaign blanketed social media and TV stations with ads, spending a total of $95 million, according to MarketWatch. The gig economy companies also sent in-app messages and emails to riders and drivers asking for their support.

One email Uber sent customers on Monday reminded Californians they could register to vote even on Election Day. It then asked customers to "join the NAACP and California Small Business Association in supporting drivers by voting yes on Prop 22."

The California chapter of the NAACP endorsed the Yes campaign, as a series of payments totaling $85,000 were made to a small consulting firm run by the chapter's president. The national branch of the NAACP did not endorse the ballot measure.

The Yes campaign has said drivers prefer to remain independent contractors, often citing "independent studies." Many of those studies have been paid for by the gig economy companies or the Yes campaign and others involved informal non-scientific polls. The authors of the studies say their findings are independent and objective.

When asked for comment before the election, Lyft spokeswoman Julie Wood said, "Drivers have consistently said they want to remain independent, and we believe California voters will stand with them."

A spokesman for the Yes campaign reiterated this statement. "Drivers are participating in text and phone banking events ... to let voters know that by voting yes they can protect hundreds of thousands of jobs and the app-based services millions rely on," he said.

For its part, the No campaign touted the support of several big-name Democrats, including presidential nominee Joe Biden and his running mate, California Sen. Kamala Harris. Also openly opposing Proposition 22 are Massachusetts Sen. Elizabeth Warren, Vermont Sen. Bernie Sanders, California Rep. Barbara Lee and New York Rep. Alexandria Ocasio-Cortez.

The No campaign additionally coordinated several events across the state. Drivers opposing the initiative held car caravan protests and dropped "No on Prop 22" banners throughout California's cities. On Monday, California Assemblywoman Lorena Gonzalez, who authored AB5, worked with drivers to reach out to voters by text banking. The campaign said it reached about 10 million voters as of Monday afternoon.

"Rideshare drivers have been building momentum throughout this No on Prop 22 campaign and they are in overdrive mode now, taking their campaign right up to the finish line," said Mike Roth, a spokesman for the No campaign. "We'll do what it takes to reach every voter we can with the truth."

Uber, DoorDash and Postmates (which Uber acquired in July) didn't respond to requests for comment. Instacart referred CNET to the Yes on Proposition 22 campaign.

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Uber and Lyft paid $400K to firm conducting ‘independent studies’ on Proposition 22 – CNET


Ride-hail drivers have held several car caravan protests in front of Uber's San Francisco headquarters. 

James Martin/CNET

On Election Day, California voters will decide on Proposition 22, a contentious ballot measure that decides the fate of the state's gig workers. As the vote approaches, both sides are making their closing arguments.

The Yes side, backed by companies like Uber and Lyft, is pushing for workers to be classified as independent contractors, while the No side is arguing workers should be employees. One of the main points of contention is whether the initiative will help or hurt gig workers. That's where a barrage of studies come in.

Uber, Lyft and the Yes on Proposition 22 campaign have sent emails and text messages to voters citing "independent studies," including one that calculates "hundreds of thousands of jobs" will be lost if Proposition 22 fails. The messages also reference a survey that says drivers wish to remain independent contractors by a "4-to-1" margin.

A popular ride-hail blogger conducted that survey through an informal poll on his website. But many of the other studies referenced by the campaign were financed by Uber, Lyft and the other companies that will benefit if Proposition 22 passes. Berkeley Research Group, which conducted the study on job loss, has received more than $411,000 from the Yes campaign, according to public records filed with California's secretary of state. Benenson Strategy Group and the University of California, Riverside also conducted research that was funded by Uber and Lyft, respectively. 

The No campaign has also referenced studies in its messaging, though a spokesman for the campaign said it didn't commission any of that research.

The torrent of studies come amid a heated campaign over Proposition 22, which is backed by Uber, Lyft, DoorDash, Instacart and Postmates. The battle over the measure has ramifications beyond California because other states, such as New York, New Jersey, Oregon and Washington, are mulling legislation similar to California's AB5 law

The gig economy companies have poured roughly $203 million into their effort to prevent their workers from being classified as employees in the state, which would require benefits like health care and a minimum wage. The No campaign, backed by unions and labor groups, has raised $15 million. It's the most expensive ballot measure campaign in California history

Both sides have reached deep into the political playbook to make their cases. The Yes campaign has hired conservative operatives to reportedly dig up dirt on labor activists and paid $85,000 to a firm run by the president of the California NAACP, which has endorsed its position. Meanwhile, the No campaign has held driver caravans and protests against the gig economy companies, including one in front of the Uber CEO's house.

The ride-hailing industry has a long history of funding research that's favorable to its interests. And studies like those cited by the Yes campaign are common in California politics, said David McCuan, a political science professor at Sonoma State University. He added that it isn't unusual for campaign organizers to pay consultants with the goal of getting a favorable study. 

"In terms of creating quote-unquote 'independent studies,' these are not. These are 'wink wink nudge nudge' studies," McCuan said. "Campaigns are always loosely affiliated with allies who find sympathetic research."

The Yes campaign has leaned on a Berkeley Research Group study that says at least 80% of driver jobs would disappear if gig economy companies were forced to classify workers as employees. Researchers used confidential and proprietary data from the companies, the firm says in its report, which was released in May. Over the past year, the firm has received 28 separate payments from the Yes on Proposition 22 campaign, according to public records, and it's authored two studies on gig worker reclassification.

Berkeley Research Group, which isn't affiliated with the University of California, Berkeley, declined to comment. Uber, Lyft, DoorDash and Postmates didn't return requests for comment. Instacart referred CNET to the Yes on Proposition 22 campaign. A spokesman for the Yes campaign declined to comment on the payments to Berkeley Research Group but directed CNET to a passage in the report that says the findings are "the result of objective analysis."

Mike Roth, a spokesman for the No campaign, said, "Uber, Lyft, and DoorDash have taken a shine to buying themselves rigged 'studies' to make their case. The app companies can spend all the money they want on bogus data, but they can't change the truth."

The No campaign tends to point to various studies that calculate drivers' earnings as higher when they're classified as employees. Some of these reports were conducted by economists at the University of California, Berkeley's Institute for Research on Labor and Employment. 

A paper released by the Institute earlier this month concludes that most drivers in California make less than minimum wage. If reclassified as employees, the study estimates, driver earnings would increase by about 30% and gig economy companies would still need to use part-time workers during high-demand peak hours. 

The paper's author, Michael Reich, said Berkeley Research Group's study is flawed because it doesn't incorporate those fluctuations in demand. 

"Their conclusions of huge job losses disappear once these errors are corrected," Reich said.

Earlier this week, the Yes campaign issued a press release saying, "independent surveys show groundswell of support among drivers for Prop 22." The release linked to three surveys by Harry Campbell, a popular Los Angeles-based ride-hail driver and blogger known as the Rideshare Guy. The surveys were conducted in November 2019, May 2020 and October 2020

Campbell's surveys are done through a nonscientific poll on his blog, which asks drivers from across the country about being gig workers. He says he reaches out to thousands of drivers through his email list and usually a few hundred respond. The October 2020 survey, for example, received 609 responses. Campbell's surveys rely on driver honesty, but they don't necessarily guarantee a representative sample or truthful answers. California public radio station KQED noted in a report that some of the respondents might not even be actual drivers.  

The Yes campaign hasn't given Campbell any money or in-kind pay, though he does receive commissions from Uber for signing up new Uber Eats drivers through his blog. He said those payments account for less than 3% of the blog's gross revenue.

Campbell said he believes his surveys accurately reflect driver sentiment but that he was still surprised to see them being used by the Yes campaign.

"It is a bit strange to see our surveys referenced in Uber and Lyft's propaganda," Campbell said. "Personally though, I voted no on 22 out of principal -- I don't think these companies have shown a history of having driver's best interests at heart."

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