| From: Glenn Petersen | 11/21/2020 6:47:52 AM | | | | | | Why gig companies should be scared of a Biden administration
A divided government wouldn't stop Biden from classifying gig workers as employees. Here's how it could happen.
Emily Birnbaum
Protocol
November 20, 2020
Forget regulating Big Tech: Gig economy companies could face the industry's most aggressive government regulation during a Biden administration.
Tech lobbyists and labor experts told Protocol that gig companies are gearing up for an expensive, existential battle with the Biden administration. They know that an antagonistic Biden Labor Department has the ability to override state efforts to limit gig workers' rights, and experts described to Protocol how that could play out.
With a potentially divided Congress, it could be an uphill battle to pass any legislation on tech issues such as antitrust, privacy or Section 230, all of which have deep partisan fissures. So, if Republicans keep the Senate, "you're going to have a Biden administration looking to do as much as they can through agency actions" where Democrats can push regulations unilaterally, said Brian Chen, a staff attorney with the National Employment Law Project. That could make the already-powerful Department of Labor and National Labor Relations Board more important than ever.
Biden officials are likely to flex their muscles at those agencies to classify gig workers as employees, both forcing companies like Uber and Lyft to pay their drivers federal minimum wage and empowering gig workers to unionize. The companies already spent hundreds of millions of dollars to keep workers classified as independent contractors in California through Proposition 22 — but a Biden administration could make it difficult for them to expand that campaign across the country.
"Prop 22 was a tactical win but not necessarily a strategic solution," said one tech policy executive. "This is a huge issue for labor, and you have a presidential ticket that ran as closely aligned with labor as you had in a long time, so this is an area that's going to get a lot of focus."
Biden hasn't yet announced his picks for the DOL and NLRB, but it's widely expected that he will appoint labor-friendly candidates with deep ties to unions. An aide with the Committee on Education and Labor said "there's a lot the DOL can do by itself to help crack down on this misclassification of workers, not just in the gig economy but across the economy."
There's been some question as to whether Biden intends to follow through on his campaign promises to firm up rights for gig workers, as critics pointed out that he tapped Uber and Lyft officials to join his transition team. But two sources who have advised Biden on tech issues said those personnel choices are unlikely to sway his administration's resolve to crack down on employee misclassification.
A Biden spokesperson pointed Protocol to Biden's plan for workers. "Employer misclassification of 'gig economy' workers as independent contractors deprives these workers of legally mandated benefits and protections," it reads.
Uber did not respond to a request for comment. Spokespeople for Lyft and Instacart each said they are looking forward to working with the incoming Biden administration. "We are eager to work with lawmakers in Washington, DC and around the country on new policies that prioritize Dasher voices by protecting their flexibility and extending portable and proportional benefits," a Doordash spokesperson said. "Prop 22's success is proof that voters from across the political spectrum support finding new solutions that better support Dashers and independent workers like them."
Some companies said they are still holding out hope that there could be some compromise with the Biden administration and incoming Congress, separate from the DOL and NLRB's efforts. Vikrum Aiyer, vice president of global public policy with Postmates, said he predicts there is room for a "meaningful debate" in Congress and a Biden White House about how to provide expanded benefits to workers without exclusively focusing on the politics of classification.
He pointed out that even a divided Congress could work on a bipartisan basis to figure out a compromise solution on the controversial issue – especially during the COVID-19 pandemic, which saw the government offer unprecedented benefits to self-employed workers.
"Biden is a legislator and an innovator whose pandemic-recovery plan acknowledges that our economic resilience demands policies that are both pro-worker and pro-innovation," Aiyer said. "Pitting 'workers' and 'capital' against each other does little to identify durable frameworks to elevate protections for essential workers, while growing the essential technologies providing access to that work.
Agency action
The new administration's first priority will likely be to reverse the multiple steps the Trump administration took to roll back protections for gig workers, experts and congressional aides said. It's widely expected that a Biden administration will revoke an incoming Trump Labor Department rule that would make it easier for companies to avoid classifying workers as employees and roll back a 2019 NLRB analysis that claimed Uber drivers are independent contractors.
A Biden Labor Department official could then issue an opinion, called an "administrator's interpretation," to clarify that the DOL believes gig workers are employees under the Fair Labor Standards Act, which sets federal minimum wage and fair labor overtime pay for all employees in the U.S., regardless of what's happening at the state level. That was the DOL's stance during the Obama administration. To affirm that opinion, the DOL could sue Uber, Lyft or another gig work company, setting up a prolonged legal battle to establish whether they have violated the law by misclassifying their workers. The companies would likely fight such a case all the way up to the Supreme Court.
Meanwhile, the NLRB, which handles the question of who has a right to unionize, could issue a rule about whether gig workers are employees under the National Labor Relations Act or adjudicate an unfair labor practice charge from a group of gig workers trying to unionize. "That's two routes [at the NLRB] to the same outcome, which is 'drivers are employees,'" said Benjamin Sachs, a professor of labor and industry at Harvard Law School. "Once that determination was made, every Uber and Lyft driver everywhere in the country would have the right to form a union."
But the NLRB process will likely be stalled as Democrats wait for the tenure of NLRB general counsel Peter Robb — who has sided with gig companies on the question of worker classification — to expire in November 2021. "There really won't be anything that happens until the next general counsel comes in," one congressional aide said.
Heidi Shierholz, a former chief economist at the Labor Department and senior economist with the Economic Policy Institute, said it could take over a year for the agencies to finalize rules and regulations around gig work. And the lawsuits against gig companies could take even longer, especially if they go to the Supreme Court.
In the interim, Aiyer with Postmates said it's possible the Biden White House could try to hash out a deal among technology companies, workers and other stakeholders, such as racial justice organizations. "If Biden can wield the convening power of the White House to raise the level of debate in this country about what a new American safety net looks like for all workers regardless of who their employer is, that could go far beyond any singular proposed rulemaking," Aiyer from Postmates said. "Instead we can ask ourselves, how can we strengthen 20th century labor laws to broaden the tent of worker protections and close the delta between one class of workers with benefits and another without?"
For now, gig companies including Uber and Lyft are aggressively lobbying to export the Prop 22 model across the country. A group called Illinoisans for Independent Work, backed by $1.2 million from Lyft, recently launched an ad campaign lauding the "flexibility" of independent work, echoing the rhetoric of the Yes on Prop 22 campaign.
"The companies have already made it clear they're going to bring Prop 22 or something like it to other states," Chen said. "I fully expect them to do so in 2021."
But if all goes according to plan for a Biden administration, it won't be far behind.
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| From: Glenn Petersen | 11/25/2020 8:39:13 AM | | | | | | SEC proposes rules for giving gig workers equity
Kia Kokalitcheva
Axios
November 24 2020
The U.S. Securities and Exchange Commission has proposed rule changes that would make it possible for gig companies to give equity to their workers as part of their compensation if they meet certain requirements.
Why it matters: This is something gig companies including Uber and Airbnb have asked the SEC to do over the years as a way to share their companies' upside with these non-employees.
-- Instead, both Uber and Lyft gave certain long-time drivers cash and the ability to purchase IPO shares when they went public, while Airbnb is putting 9.2 million shares into an endowment it will use to finance initiatives for hosts.
Details: The five-year pilot program would allow gig companies to issue equity as long as it's no more than 15% of a worker's compensation during a 12-month period, and no more than $75,000 in value during a 36-month period (based on the share price when it's issued).
-- Individuals cannot negotiate whether they want equity or cash in exchange for their services.
-- The company has to reasonably try to prevent gig workers from reselling the equity.
-- These requirements also apply to public companies, except for the prohibition on stock reselling.
Between the lines: While the document doesn't mention home-sharing hosts (like those on Airbnb), it does specify that marketplaces for the permanent sale of real estate, "as opposed to the temporary rental of real estate," would not qualify. Airbnb, which is in its pre-IPO quiet period, declined to comment.
Yes, but: Commissioners Allison Lee and Caroline Crenshaw opposed the proposal in a joint statement, arguing that the commission is making this exception for gig companies but not for other alternative workers such as freelancers, temporary help agency workers, and on-call workers despite mentioning them in its discussion of the modern work landscape.
What's next: The proposal is open to public comment for the next 60 days, after which the SEC will assess whether to move forward.
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| From: Glenn Petersen | 12/1/2020 8:22:39 AM | | | | | | Airbnb seeks valuation of up to $35 billion in its IPO
PUBLISHED TUE, DEC 1 20207:42 AM EST
UPDATED 16 MIN AGO
Steve Kovach @STEVEKOVACH
CNBC.com
KEY POINTS
-- Airbnb filed an updated S-1 Tuesday ahead of its expected IPO later this month.
-- Airbnb says it expects to price between $44 and $50 per share.
-- That would give Airbnb a valuation of up to $35 billion, up from its peak private valuation of $31 billion.
Airbnb plans to price at $44 to $50 per share in its IPO, giving it a valuation of up to $35 billion on a fully diluted basis, according to a new filing the company submitted to the SEC Tuesday. The company seeks to raise about $2.5 billion in the IPO. Existing investors seek to sell $96 million worth of stock in the IPO.
Airbnb’s last private valuation was $18 billion, after it raised $2 billion in debt earlier this year as the company struggled in the early months of the pandemic. That was nearly half its peak private valuation ($31 billion) from 2017.
The company will list on the Nasdaq under the ticker “ABNB.” It’s expected to hold its IPO later this month. Airbnb’s roadshow, where it makes its pitch to investors, will start Tuesday.
Airbnb released its first S-1 last month, reporting net income of $219 million on $1.34 billion in revenue in the third quarter of this year, down about 19% from the year before. Like most travel companies, Airbnb has seen a drop in business due to the Covid-19 pandemic.
But after cutting about 25% of its staff, or about 1,900 employees, in May, Airbnb saw its business quickly bounce back later in the year. That was thanks to a surge in rentals in rural areas as people looked for safe escapes amid the pandemic. The company was originally expected to IPO in the first half of the year, but the pandemic upended those plans.
But with markets ripping higher on positive vaccine news and President-elect Joe Biden’s election win last month, it’s a good environment for companies to go public now.
In addition to Airbnb, DoorDash, the maker of the popular food delivery app, is also expected to IPO this month. DoorDash released its updated S-1 filing Monday, and is seeking a valuation of up to $32 billion in its debut. That’s double DoorDash’s last private valuation of $16 billion in June.
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| To: rogermci® who wrote (809) | 12/2/2020 1:42:07 PM | | From: Glenn Petersen | | | | Today, the idea does not seem so crazy after all. Our more than 4 million hosts now offer everything from a private room in their home to luxury villas, from one night to several months at a time. Hosting has expanded from homes to now include experiences that can be taken in cities all over the world, or even online. In more than 220 countries and regions around the world, our hosts have welcomed over 825 million guest arrivals and have cumulatively earned over $110 billion. “Airbnb” has become synonymous with one-of-a-kind travel on a global scale.
S-1/A (sec.gov)
Ignoring the fact that an individual host is probably offering multiple beds, the $35 billion valuation values each host at $8,750 per host.
Plus, no capital costs.
The cost of building a new hotel can range from $75,000 to $600,000 per room, depending on how many stars you want.
The national average range is $13,000,000 to $32,000,000, with most people spending around $22,100,000? on a 3-star hotel with 100 rooms. At the low end of the spectrum, it is possible to build a 2-story motel for $7,500,000, while at the high end, you can spend more than $60,000,000 on a luxury 5-star hotel.
2020 Cost to Build a Hotel | Hotel Construction Costs (fixr.com) |
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| To: rogermci® who wrote (811) | 12/3/2020 1:40:54 PM | | From: Rarebird | | | | We used airbnb when we drove from NYC to Henderson, NV in 2017. It was a very good expeience in PA, TN, TX and NM. We hooked up very quickly and the stay was very enjoyable.
I would buy the IPO too.
There is going to be an outburst of energy, spending and strong recovery next year. Many stocks will soar. Maybe January gets a bit choppy and volatile - nothing serious, though
Next week huge rally. |
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| To: Rarebird who wrote (812) | 12/6/2020 11:57:22 PM | | From: Glenn Petersen | | | | Airbnb Boosts IPO Price Range to Between $56 and $60 a Share
New price range for home-rental company’s public debut equates to $39 billion to $42 billion, fully diluted
By Maureen Farrell
Wall Street Journal
Updated Dec. 6, 2020 9:00 pm ET
Airbnb co-founder and CEO Brian Chesky at a 2018 event in San Francisco.PHOTO: ERIC RISBERG/ASSOCIATED PRESS
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Airbnb Inc. plans to boost the proposed price range of its initial public offering, the latest sign that the red-hot IPO market is ending the year on a high note.
Airbnb is boosting the range to between $56 and $60 a share, from $44 to $50, people familiar with the matter said. The new range would give the home-rental company a valuation of as much as $42 billion on a fully diluted basis and including proceeds from the offering.
DoorDash Inc., the food-delivery company that is expected to debut Wednesday, the day before Airbnb, plans to price its shares at the high end of or above its range of $90 to $95 a share—already raised from between $75 and $85, people familiar with the offering said. That would give the San Francisco company, the largest among its peers, a valuation of as much as $36 billion or more, on a fully diluted basis and including proceeds from the offering.
Taken together, the developments are the latest sign that the market for new issues, already at a record in terms of money raised in the U.S., is set for a climactic ending to the year. The market has been buoyed by soaring stocks, including those that have recently made their own debuts.
So far this year, more than $140 billion has been raised in initial public offerings on U.S. exchanges, far exceeding the previous full-year record high set at the height of the dot-com boom in 1999, according to Dealogic data that dates back to 1995.
Valuations of both Airbnb and DoorDash have been boosted after roughly a week of investor meetings known as roadshows.
December is typically a quiet time in the IPO market. This year there will instead be a flurry of offerings. In addition to Airbnb and DoorDash, videogame company Roblox Corp. and the parent of online retailer Wish, ContextLogic Inc., are expected to debut before the year is through.
For companies now, including Airbnb and DoorDash, roadshows have been conducted differently than they would have in the pre-Covid-19 world. Executives have been marketing their offerings to mutual funds and hedge funds in Zoom meetings rather than in the typical whirlwind tour across the country.
Both Airbnb and DoorDash and their respective underwriters will set their final IPO prices in the coming days. Morgan Stanley and Goldman Sachs Group Inc. are leading Airbnb’s IPO, while Goldman and JPMorgan Chase & Co. are leading DoorDash’s.
Write to Maureen Farrell at maureen.farrell@wsj.com
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| To: rogermci® who wrote (811) | 12/7/2020 12:10:08 AM | | From: Glenn Petersen | | | | You may find yourself chasing it on Friday.
Airbnb has always been my favorite in the sharing economy niche. A beautiful business model executed to near perfection.
About five or six weeks ago Cramer was strongly advocating buying the stock on opening day and sticking it in a drawer. He thought that there would be a pandemic discount. I think that the roadshow eliminated the discount. |
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| From: Glenn Petersen | 12/8/2020 8:26:04 PM | | | | | | DoorDash sells shares at $102 in IPO, pricing above range
PUBLISHED TUE, DEC 8 20205:58 PM EST
UPDATED TUE, DEC 8 20206:15 PM EST
Leslie Picker @LESLIEPICKER
Ari Levy @LEVYNEWS
CNBC.com
KEY POINTS
-- DoorDash sold shares at $102 a piece in its IPO, above its range of $90 to $95, according to people familiar with the matter.
-- Revenue at the the food delivery company jumped 268% in the third quarter to $879 million.
-- DoorDash has been one of the biggest beneficiaries of the coronavirus pandemic, which forced restaurants to close their dining rooms and move to delivery.
A DoorDash Inc. delivery person places an order into an insulated bag at Chef Geoff’s restaurant in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images
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DoorDash, the food delivery provider that’s seen a surge in demand during the coronavirus pandemic, sold shares in its IPO at $102 a piece, pricing above its range, according to people familiar with the matter.
The offering on Tuesday values the company at $32.4 billion, based on common stock outstanding and $38.7 billion on a fully-diluted basis. The company previously said it expected to sell shares at between $90 and $95. The sources asked not to be named because the pricing is still confidential.
DoorDash is the first IPO in a late-year consumer technology wave that includes the expected debut of Airbnb later this week, followed by e-retailer Wish next week and fin-tech company Affirm and kids’ game maker Roblox this month. The companies are taking advantage of a post-election stock rally and a clear indication of investor demand for high-growth tech, which has led the market this year.
While a wide swath of software and internet companies have gotten swept up in the Covid-19 rally, few have experienced the kind of growth seen by DoorDash. Revenue in the third quarter surged 268% from a year earlier to $879 million, following growth in the second quarter of 214%. Through the first nine months of 2020, DoorDash’s order volume climbed to $16.5 billion from $5.5 billion a year earlier.
DoorDash, based in San Francisco, makes money by charging a commission to participating restaurants that can reach 30% of an order as well as a fee of a few dollars per order from consumers. DoorDash said in its prospectus that 390,000 merchants are now on the platform. That includes everything from fast food chains like Chick-Fil-A, Chipotle and McDonald’s to upscale restaurants that were forced to close their doors earlier this year and switch to takeout and delivery.
The company, which ranked 12th on CNBC’ Disruptor 50 list for 2020, has been able to cut its losses this year, but still reported a net loss for the first three quarters of $149 million, down from $534 million in the same period of 2019. DoorDash at least makes money on every order now, recording a so-called contribution margin of 23% through September, compared with a negative margin of 32% a year earlier.
DoorDash controls about 50% of the U.S. food delivery market, well ahead of rivals Uber Eats and GrubHub. The biggest overhang for the company may be uncertainty about what the business looks like in a post-Covid world, especially with a widespread vaccine rollout expected by mid-2021.
Should consumers return to eating out instead of relying on delivery, DoorDash could see business deteriorate. Meanwhile, restaurants, which tend to operate on very low margins, are constantly seeking ways to keep their costs down, and there’s technology on the market to help them accomplish that without relying on third-party apps.
As DoorDash warns in its prospectus, “The circumstances that have accelerated the growth of our business stemming from the effects of the COVID-19 pandemic may not continue in the future, and we expect the growth rates in revenue, Total Orders, and Marketplace GOV to decline in future periods.”
DoorDash CEO Tony Xu co-founded the company in 2013, in Palo Alto, California, where the service reached its first customers. Xu currently owns just under 5% of the company’s outstanding shares. SoftBank, which l ed a $535 million investment in 2018, is the largest shareholder with about 20% stake, followed by Sequoia, which owns 16%.
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