| From: Glenn Petersen | 10/12/2022 5:48:07 AM | | | | | | Uber, Doordash plunge after Labor Department proposes change to gig worker classification
Published Tue, Oct 11 202210:37 AM EDT
Updated 4 Hours Ago
Lauren Feiner @lauren_feiner
Key Points
- The Biden Labor Department released a proposal Tuesday that could make it possible for gig workers to be reclassified as employees, rather than contractors.
- The proposed rule sent stocks of gig companies like DoorDash, Lyft and Uber down.
- It comes after a court reinstated a Trump-era rule Biden's Labor Department tried to block that would have made it easier to classify gig workers as contractors.
The Biden Labor Department released a proposal Tuesday that could pave the way for regulators and courts to reclassify gig workers as employees rather than independent contractors.
The proposed rule, if adopted, could raise costs for companies like Lyft, Uber, Instacart and DoorDash that rely on contract workers to pick up shifts on their own schedules. Shares of Lyft fell 12% on Tuesday, while Uber dropped 10.4% and DoorDash shed 6%.
The companies have argued that flexible schedules are attractive to workers, pointing to surveys showing the popularity of the model, which they say is made possible by the use of independent contractor status. Some labor experts and activists have disagreed, however, saying the companies use the contractor model to reduce their own costs while denying workers important protections such as health-care benefits, overtime pay and the ability to organize into unions.
In 2020, a California law went into effect requiring many companies to reclassify contract workers as employees, but later that year, voters approved a proposition that exempted app-based ride-hailing and delivery companies from the law.
Last year, the Biden administration rescinded a rule created under Trump's Labor Department that would have made it easier for gig companies to classify workers as independent contractors instead of employees. But after a legal challenge, a court reinstated the Trump-era rule.
Biden's Labor Department said in its notice in the Federal Register that it had considered waiting longer to see how the Trump-era rule played out. But it decided to move ahead with the proposed regulation instead because it believes keeping the earlier rule in place "would have a confusing and disruptive effect on workers and businesses alike due to its departure from case law describing and applying the multifactor economic reality test as a totality-of-the-circumstances test."
The proposed rule would allow the determination of whether to classify a worker as a contractor or employee to rely on a more holistic assessment, including whether the work is an "integral" part of the employer's business. The goal is to protect workers from being classified improperly while providing consistency for businesses that wish to employ independent contractors, the agency wrote.
The new proposed rule will still need to make its way through the formal regulatory process, including allowing time for the public to submit comments, before it is adopted.
Uber's head of federal affairs, CR Wooters, said in a statement that the proposed rule "takes a measured approach, essentially returning us to the Obama era, during which our industry grew exponentially. In a time of deep economic uncertainty, it's crucial that the Biden administration continues to hear from the more than 50 million people who have found an earning opportunity with companies like ours."
In a blog post Tuesday, Lyft wrote that there "is no immediate or direct impact on the Lyft business at this time," noting the 45-day public comment period. It added that the rule "Does not reclassify Lyft drivers as employees," and also doesn't force it to change its business model. Lyft said the rule simply reverts the standard to that used under the Obama administration, which previously applied to its company "and did not result in reclassification of drivers."
cnbc.com |
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| From: Glenn Petersen | 11/1/2022 7:58:43 AM | | | | | | Uber reports another loss but beats on revenue and the stock is up
Published Tue, Nov 1 20226:59 AM EDT
Updated 1 Min Ago
CNBC.com
Key Points
- Uber reported third-quarter earnings that beat analysts' estimates for revenue Tuesday.
- The company suffered a net loss of $1.2 billion for the quarter, $512 million of which was attributed to revaluations of Uber's equity investments, according to a company release. In this article
Uber reported a third-quarter loss Tuesday but beat analysts' estimates for revenue and showed a surge in bookings. Shares were up about 9% in premarket trading.
Here's how the company did:
- Loss per share: 61 cents
- Revenue: $8.34 billion vs. $8.12 billion expected by analysts, according to Refinitiv.
Uber reported a net loss of $1.2 billion for the third quarter, $512 million of which was attributed to revaluations of Uber's equity investments, according to a company release.
In a prepared statement, CEO Dara Khosrowshahi said Uber delivered a "strong quarter" and benefitted from booming travel, easing lockdowns and shifts in consumer spending. He said October is tracking to be the company's "best month ever for both Mobility and total company Gross bookings." However, he cautioned that after the last few years, the company has learned not to take anything for granted.
"With continued rigor around costs, discipline on headcount, and a balanced capital allocation approach, all supported by our leading technical and operating capabilities, we are well positioned to deliver expanding profitability over the coming quarters," Khosrowshahi said.
The company reported a record adjusted EBITDA of $516 million, beating guidance of $440 million to $470 million and ahead of analyst estimates of $457.7 million according to StreetAccount. Gross bookings for the quarter came in at $29.1 billion, up 26% year over year.
For the fourth quarter of 2022, Uber said it expects gross bookings to grow between 23% and 27% year over year on a constant currency basis, and an adjusted EBITDA of $600 million to $630 million.
Here's how Uber's largest business segments performed in the quarter:
Mobility (gross bookings): $13.7 billion, short of analysts' estimates of $13.83 billion according to StreetAccount.
Delivery (gross bookings): $13.7 billion, short of analysts' estimates of $14.01 billion according to StreetAccount.
Uber relied heavily on growth in its Eats delivery business during the pandemic, but its mobility segment surpassed Eats revenue in its first and second quarters as riders began to take more trips. That trend continued during the third quarter, as Uber's mobility segment reported $3.8 billion in revenue while delivery reported $2.8 billion.
Uber's freight business booked $1.75 billion in sales.
The number of monthly active platform consumers climbed to 124 million in the third quarter, up 14% year over year. 1.95 billion trips were completed on the platform during the period, up 19% year over year.
Shares of Uber are down more than 36% so far this year. The stock tumbled more than 10% in October after the Biden Labor Department released a proposal that could pave the way for regulators and courts to reclassify gig workers as employees. The proposed rule could raise costs for companies like Uber, Lyft, Instacart and DoorDash that rely on contract workers to pick up shifts on their own time.
The companies have argued that flexible schedules are attractive to workers, but some labor experts and activists have disagreed, saying the companies use the contractor model to reduce their own costs and deny workers important protections.
Uber has also had to contend with high gas prices and inflation, but CEO Dara Khosrowshahi told CNBC's "TechCheck" in September that its supply side may actually be benefiting from the inflationary environment.
As expenses rise and people are paying more for essentials like groceries, he said they are also signing up to drive for Uber.
"If anything, 72% of drivers in the U.S. are saying that one of the considerations of their signing up to drive on Uber was actually inflation," he said.
Uber will hold its quarterly conference call with investors Tuesday at 8 a.m. ET.
--CNBC's Lauren Feiner contributed to this report.
cnbc.com |
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| To: Glenn Petersen who wrote (238) | 2/8/2023 8:20:57 AM | | From: Glenn Petersen | | | | Uber Reports Record Revenue as It Defies the Economic Downturn
New York Times
February 8, 2023
Uber indicated on Wednesday that it had staved off the downturn that hit many technology companies while posting what Dara Khosrowshahi, Uber’s chief executive, called the company’s “strongest quarter ever.”
Uber reported $8.6 billion in revenue in the last three months of 2022, a 49 percent increase from the same period a year ago, when the Omicron variant of the coronavirus dampened travel. The company made $30.7 billion in gross bookings — the amount of money paid by customers — a 19 percent year-over-year jump.
The company said it had tallied two billion trips in a quarter for the first time, up from 1.7 billion a year ago, and it saw an 11 percent increase in the number of customers who use Uber each month, to 131 million.
The results slightly exceeded the expectations of Wall Street analysts.
Even as other tech companies like Google, Meta and Microsoft have announced widespread layoffs and slashed costs, Uber’s business has stayed relatively steady, and Mr. Khosrowshahi said last month at the World Economic Forum in Davos that he was not anticipating companywide layoffs.
Companies that offer internet-based services, like social media and video conferencing, boomed during the pandemic but have slowed since lockdowns ended. By contrast, Uber, which makes much of its money offering rides to people, cut about 7,000 employees in 2020 while people were stuck at home, but rebounded as the world reopened and people began carrying on with their normal lives.
“All of those other tech companies in hindsight now look to have overhired during the digital boom of the pandemic when we were all stuck inside using digital services,” said Tom White, a senior research analyst with the financial firm D.A. Davidson. The businesses of companies like Uber and Lyft were “depressed” during that time, he said.
Uber reported $595 million in profit thanks to its stakes in other ride-share companies. The company said it expected to achieve operating income profitability at some point this year, which would be a sign of growing strength in its business.
Uber was one of the first tech companies to warn of an economic downturn. Last May, Mr. Khosrowshahi told employees that the company needed to rein in spending and focus on becoming profitable to adjust to a “seismic shift” in the economy and investors’ priorities.
Since then, Uber has enacted some cost-cutting measures. This month, about 150 employees were laid off from Uber Freight, a booking service for long-haul truck shipments. Lior Ron, the Uber Freight chief executive, told employees it was a move brought about by economic conditions. The layoffs were reported earlier by CNBC.
Lyft, which will release its quarterly financial results on Thursday, has also worked to reduce costs. In November, the company laid off 650 employees, and last month it shuttered Lyft Delivery — a small pilot program — because of budget constraints, according to three people with knowledge of the program’s cancellation.
Mr. Khosrowshahi said in a statement that Uber would continue to be careful with spending. “We will maintain this rigor throughout 2023 and beyond to deliver healthy growth with minimal head count addition,” he said.
The post Uber Reports Record Revenue as It Defies the Economic Downturn appeared first on New York Times.
Uber Reports Record Revenue as It Defies the Economic Downturn – DNyuz |
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| To: Glenn Petersen who wrote (239) | 2/9/2023 4:45:12 PM | | From: Glenn Petersen | | | | Lyft Shares Fall After Unexpected Loss, Downbeat Revenue Outlook
Ride-hailing company had reported highest number of riders in three years in latest quarter
By Kathryn Hardison
Wall Street Journal
Updated Feb. 9, 2023 4:31 pm ET
Lyft shares plunged after the ride-hailing company posted an unexpected loss in the fourth-quarter and said first-quarter revenue would come in below Wall Street expectations.
The ride-hailing company said revenue grew 21% to $1.18 billion in the period that ended Dec. 31. Lyft had 20.4 million active riders during the quarter, marking the highest level in nearly three years though still below the 23 million active riders it had in the quarter before the pandemic struck. Both metrics beat Wall Street views, according to FactSet.
“Ride-share is back,” Lyft co-founder and President John Zimmer said in an interview.
Despite strong ridership numbers, Lyft reported an unexpected loss in the recent quarter on an adjusted basis, missing Wall Street estimates.
Lyft and rival Uber Technologies Inc. had been grappling with a driver shortage until recently, which pushed ride prices to record highs. Lyft said that the number of drivers on its service improved in the quarter and that it earned $57.72 in revenue per active rider.
First-quarter revenue is expected to be roughly $975 million, up from $876 million the year prior.
That represents a sequential decline from the fourth quarter, which Mr. Zimmer attributed to a seasonal trend as more people adopt health-related goals at the start of the year that include going out less and walking more. The ride-share marketplace has also improved with enough drivers to meet consumer demand, which leads to lower prices, he said.
Uber’s revenue also grew last quarter as people spent more on rides and food delivery. “Despite any macroeconomic uncertainty, I’m more confident than ever in our prospects,” Dara Khosrowshahi, chief executive of Uber, said on an earnings call with analysts.
For the latest quarter, Lyft’s net loss widened to $588.1 million, or $1.61 a share, from $283.2 million, or 83 cents a share, in the year prior. Lyft said that adjusted for certain items, it recorded a loss of 74 cents a share, missing analysts’ expectation for a profit of 13 cents.
The company reported $201.3 million of stock-based compensation and related payroll tax expenses, as well as restructuring charges tied to recent layoffs. Lyft also strengthened its insurance reserves and other current liabilities in the quarter.
In November, Lyft said it would lay off 13% of its workforce, or nearly 700 jobs. The ride-hailing company’s executives described the move as a proactive step as they foresee a possible recession.
Write to Kathryn Hardison at kathryn.hardison@wsj.com
Lyft Shares Fall After Unexpected Loss, Downbeat Revenue Outlook - WSJ |
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| From: Glenn Petersen | 3/9/2023 6:06:30 AM | | | | | | Uber reportedly considering spinning off its freight business
BY DUNCAN RILEY
SilisonANGLE
March 8, 2023
Uber Technologies Inc. is reportedly considering spinning off its Uber Freight business in a sale or as a publicly traded firm.
Bloomberg, referencing people familiar with the matter today, said the spin-off is being considered as Uber is looking to streamline its focus on ride-hailing and food delivery. A decision to spin off Uber Freight is said to be not imminent and the company’s plan could change.
The same sources say an initial public offering is a more likely outcome and if Uber decides to go with an IPO, it may not happen until next year and will depend on market conditions. Uber has declined to comment on the report.
Founded in 2017, Uber Freight is a logistics and supply chain management firm that connects truck drivers to shipping companies, quite literally Uber for trucks in all but name, with a range of additional services.
The company was partially spun off in October 2020 when it raised $300 million on a $3.5 billion valuation from Greenbriar Equity Group L.P. According to Crunchbase, Uber Freight raised an additional $550 million from D1 Capital Partners, GCM Grosvenor Inc. and the Abu Dhabi Growth Fund LLC in November 2021.
Uber last reported earnings on Feb. 8, with the freight business generating revenue of $1.5 billion in the quarter ending Dec. 31, up 43% year-over-year, But the headline figure does not tell the whole story. In its fourth-quarter earnings call, Uber’s Chief Financial Officer Nelson Chai warned that Uber Freight would struggle going forward from a cyclical downturn in the business.
“We do expect that you’ll see us getting some traction there, but the overwhelming cycle that’s going on right now more broadly on the freight industry is going to continue to impact our business,” Chai said in the call. “And so, that business will continue to lag likely versus where we would have hoped.”
Uber Freight also announced it was laying off 3% of its workforce, or 150 employees, in January, citing headwinds in the logistics market. Like many other companies, Uber also noted that the freight business had accelerated hiring in 2022, expecting a different economic reality.
A downturn warning ahead of a possible sale or IPO is not ideal when trying to maximize shareholder return. With Uber said to be possibly waiting until next year to float the company, it may not be considering market conditions alone and could be hoping that the overall freight market turns around over the next year as well.
Uber reportedly considering spinning off its freight business - SiliconANGLE |
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| From: Glenn Petersen | 3/14/2023 4:56:10 AM | | | | | | Uber and Lyft shares rise after California court victory lets them classify drivers as contractors
PUBLISHED MON, MAR 13 20238:12 PM EDT
UPDATED MON, MAR 13 20238:50 PM EDT
Rohan Goswami @ROGOSWAMI
CNBC.com
KEY POINTS
-- In Nov. 2020, California voters approved Proposition 22, which allowed ride-sharing apps like Uber and Lyft to classify their drivers as independent contractors, limiting the companies’ obligation to provide certain benefits.
-- A group of drivers challenged the proposition, and in 2021 a judge said it was unconstitutional.
-- But on Monday, an appeals court overturned that ruling, allowing Prop. 22 to stand.
Ride-sharing apps, including Uber and Lyft, can continue to treat their drivers as independent contractors, a California appeals court ruled on Monday, overturning a lower-court decision that barred them from doing so.
In Nov. 2020, California voters approved Proposition 22, which allowed ride-sharing and delivery app makers to classify their drivers as independent contractors. A California judge ruled the proposition unconstitutional in 2021, arguing that it infringed the legislature’s power to set standards at the workplace. The state and a group representing the companies and other parties appealed that decision, and Monday’s ruling came down in their favor.
Shares of ridesharing and delivery companies rose on the news, with Uber, Lyft, and Doordash notching gains of more than 4% after hours.
Prop. 22 created a set of criteria which determined whether ride-share drivers were employees or independent contractors> In practice, it exempted Uber and similar companies from following certain minimum wage, overtime, or workers compensation laws for hundreds of thousands of Californian rideshare drivers. Instead, the ballot measure required companies to provide compensation and healthcare “subsidies” based on “engaged” driving time, as well as other benefits, including safety training and “sexual harassment training.”
It was the most expensive ballot issue in California’s history, with ride-share companies contributing over $181 million to the “Yes” campaign. Companies reportedly moved aggressively to prompt their drivers to support the initiative, which passed with 58.6% of votes in support.
A group of ride-share drivers sought to strike down Proposition 22, and won a lower court decision. But in a 63-page opinion issued Monday, California justices from the 1st District Court of Appeal disagreed with that court, and upheld the proposition.
“Proposition 22 does not intrude on the Legislature’s workers’ compensation authority or violate the single-subject rule,” the opinion read.
“Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22. Across the state, drivers and couriers have said they are happy with Prop 22, which affords them new benefits while preserving the unique flexibility of app-based work,” Uber chief legal officer Tony West said in a statement.
Uber, Lyft shares rise after California court upholds Prop. 22 (cnbc.com) |
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| From: Glenn Petersen | 3/27/2023 5:11:40 PM | | | | | | LYFT is up about 4% in after hours trading.
Lyft CEO and president to step down in mid-April, former Amazon exec David Risher named as replacement
MON, MAR 27 20234:32 PM EDT
UPDATED 7 MIN AGO
Rohan Goswami @ROGOSWAMI
CNBC.com
KEY POINTS
-- Lyft’s cofounders, Logan Green and John Zimmer, will step back from their day-to-day roles as CEO and president, respectively.
-- Former Amazon executive David Risher will take the top job at the ridesharing company.
Lyft’s cofounders, CEO Logan Green and president John Zimmer, will step back from their day-to-day roles by mid-April, the company announced on Monday.
David Risher, a former retail executive at Amazon, will assume the CEO position at the ridesharing company. Green and Zimmer will serve as chair and vice chair of the Lyft board. Lyft’s current chairman Sean Aggarwal will step down from his post but will remain on the board, the company said.
Lyft shares rose around 5% after hours on the news.
Green and Zimmer founded Lyft in 2012 and took the company public in 2019. Lyft shares have fallen more than 70% in the last year.
“I am honored to step into the CEO role at such an important moment in the company’s history, and am prepared to take this business to new levels of success,” Risher said in a statement.
Risher joined Amazon in 1997 as its first vice president of product and store development. He was a top lieutenant of Amazon founder and executive chairman Jeff Bezos, and went on to serve as senior vice president of marketing and merchandising before exiting the company in 2002.
— CNBC’s Annie Palmer, Laura Batchelor and Deirdre Bosa contributed to this report.
This is breaking news. Please check back for updates
Lyft CEO, president to step down, ex-Amazon exec Risher named as CEO (cnbc.com) |
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