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Why Uber and Lyft are taking a page out of big tobacco’s playbook in labor law battle | Uber

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Uber and Lyft are waging a scorched-earth regulatory battle to avoid providing basic benefits to their drivers, now considered essential workers, in their largest US market: California. In response to a lawsuit by the California attorney general, Xavier Becerra, a judge found the companies’ drivers to be employees and ordered Uber and Lyft to act accordingly – including by providing a living wage, unemployment benefits, state-mandated sick leave and full reimbursements for expenses like cleaning and personal protective equipment.

The companies have responded by threatening to lay off tens of thousands of workers. Their goal is to extend the crisis until November, when Proposition 22, a referendum written and sponsored by the gig companies, will be voted on. Prop 22 would create a special exemption from California employment laws just for these companies, while also pre-empting local regulation. The companies have taken a page from big tobacco’s political playbook to avoid complying with wage laws and basic aspects of the social safety net in exchange for the labor of their majority immigrant and people-of-color workforce.

Like the tobacco companies, gig companies have spent millions of dollars to directly and indirectly challenge independent research that is critical of the companies. They pay for their own self-serving studies. They also manipulate the media, spend record-setting amounts to lobby legislators, create faux grassroots movements (also called astroturfing) to carry their message, and pay lip service to social justice issues to obscure their true motivations. They have even used their access to riders and drivers – through email, text and in-app messaging – to sway the voting public.

A recent investigative report reveals that the Prop 22 campaign and their supporters (with or without assistance of the gig companies themselves) have also leveraged another political tactic for which big tobacco is notorious: attacking and harassing critics, including academics and government officials.

I have been on the receiving end of these harassment and attacks.

I am a professor of law at the University of California, Hastings College of Law, and for nearly a decade, have done both legal research and ethnographic fieldwork studying self-organized drivers in California’s taxi and ride-hailing industries. I have published extensively in academic journals and media on the topic. My expertise, policy recommendations and central empirical findings – which highlight how and why Uber and Lyft drivers live devastatingly precarious lives – have been used in regulatory and enforcement contexts around the world.

However, since February of this year – the same month that the companies amped up the $110m Prop 22 campaign payments to public relations and political opposition research firms – I became subjected to a relentless stream of online and offline attacks. In March, during the second week of California’s pandemic lockdown, my home address was posted online by a Prop 22 supporter. Two weeks later, a series of articles about me and my family (full of conjecture and misinformation) were posted on a rightwing blog, a spinoff of the Washington Times. In late July, my university received a massive public records act request for my emails and text messages from one of the campaign’s research firms (MB Public Affairs, previously hired by Altria, formerly known as Philip Morris). A supporter of the campaign later filed a bogus complaint of illegal lobbying against me (I do not take money for my advocacy). And then, bizarrely, the campaign’s Twitter account directly abetted my online harassment.

Some of this has been horrendous; some of it has just been a hassle. But taken together, it has been overwhelming – an aggressive attempt to silence a critical, independent academic voice.

But too much is on the line, in both California and beyond, for me to be silent in this moment.

In practice, Proposition 22 would permanently codify a third, substandard regulatory category for California ride-hail and delivery workers, in between employees and independent businesspersons.

Under the measure, these workers would lack the bargaining power of true independent contractors, who commonly set their own rates, build client lists and decide how to do their work – here, think of a plumber who runs their own business.

But, if Prop 22 is successful, they would also lack the protections of employment status, including a guaranteed wage floor for all the time they spend laboring, workers’ compensation if they are hurt on the job, and state unemployment insurance if they lose their job through no fault of their own (ie because of Covid-19). The campaign’s suggestion that workers will get “historic” new benefits like discrimination protection are a mirage, since the measure fails to protect against multiple forms of discrimination (eg, immigration status) and fails to define how a worker would enforce these rights, making them dead letter protections.

Meanwhile, the companies would save billions of dollars, while taxpayers foot the bill. In California, alone, Uber and Lyft have already avoided an estimated $413m in state unemployment insurance taxes between 2014 and 2019. And in the middle of a pandemic in which they are considered “essential workers”, only a fraction of the workforce would get healthcare subsidies. If passed, similar legislation has the potential to spread well beyond the state and the sector, dismantling the limited employment protections workers across the nation depend upon. Indeed, in coalition with companies like Amway and Kelly Services, this is the industry’s long-term plan.

So, what does big tobacco’s political script tell us about what we can expect next from gig companies?

In 1954, the tobacco industry paid to publish the Frank Statement to Cigarette Smokers in hundreds of US newspapers. The statement said that the public’s health was the industry’s primary concern. Similar to the piece published recently in the New York Times by Uber’s CEO, Dara Khosrowshahi, the tobacco companies promised and proposed a variety of good faith changes.

What followed for the tobacco industry, however, were decades of deceit and regulatory influence that ultimately cost millions of lives. When Mr Khosrowshahi took over as Uber CEO in 2017, he pledged to run a different company with a different work culture – no more Kalanick-era lawlessness, no more harassment, no more toxicity. But for the drivers of the company, very little changed; if anything, working conditions got worse as wages dropped and they had to work longer and harder to earn the same amount. Transitioning from private ownership to being publicly traded has not changed the company’s aggressive avoidance of the law and “breaking things” to get what they want. Drivers, regulators and the public cannot wait any longer for good faith changes.

Trying to legalize a new, substandard tier of work, especially for a largely minority workforce in the context of a raging pandemic and growing economic inequality, is not reasonable or good policy.

And no matter how hard they try, no one will stop me from saying it.

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Facebook ex-HR boss worries grads will miss out due to coronavirus

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Fiona Mullan, former vice president of global human resources at Facebook.

Fiona Mullan

LONDON — Graduates are likely to find the workplace “much more challenging” in the wake of the coronavirus pandemic, according to the former vice president of global human resources at Facebook, who said companies are finding it harder to offer them a satisfactory experience.

Fiona Mullan, who spent almost six years at Facebook, said she is particularly concerned that graduates won’t be able to form the same kinds of relationships with their colleagues that they normally would when they enter the world of work.

“We made some of our best friends in that first job,” Mullan told CNBC via Zoom last week. “We did that because we went on holiday together or we went on boozy nights together or … we learned together. That cohort experience for graduates is going to be much more challenging.”

Mullan, who is now chief people officer at cellphone top-up company Ding, said she’s interested to see whether the pandemic ends up diluting company cultures or whether there’s a difference in job satisfaction levels between employees who joined pre-Covid and post-Covid. “How will it be for people who have never been inside an office or met a physical person of the company that they’re going to work for?”

While some industries such as travel and retail have been decimated by the pandemic, tech on the whole has continued to grow, albeit slightly slower than before, said Mullan.

“The tech industry will be better positioned to continue to invest in graduate hiring than other industries,” Mullan said. However, she highlighted that there likely will be fewer graduate roles available at tech companies this year as a result of the virus.

Engineers, moderators and software developers

In terms of recruitment, Mullan said social media platforms will continue to focus on hiring engineering talent, moderators, and people with the skills to develop software that can automate moderation.

“They’re building for the future and their appetite for the market’s best technical talent is always a strategic plan,” she said. “If they miss a year, they feel the negative impact of that in future years so they will be keen to continue to invest there.”

Indeed, The Telegraph newspaper on Monday reported that TikTok was hiring a new “university relations recruiter” at its London office to find at least nine people to start work at the company next year. Some of the new recruits will reportedly work on developing the company’s machine-learning software that underpins the app’s recommendation algorithm, while others will work in marketing, content development and creative strategy.

Focus on efficiencies

Looking ahead, Mullan said tech firms would likely look to make their finance, legal, and HR teams more “efficient” in the pandemic.

Chris Bray, a recruiter at Heidrick & Struggles who helps U.S. tech giants to find talent in Europe, agreed that strategic decisions around recruitment were now being made, after a difficult period earlier in the year. 

“At the outset of Covid, we witnessed a semi-paralysis amongst many large players, with spending reined in and recruitment strategies put on hold,” he told CNBC.

However, he added: “Over the past quarter, a definite pattern has emerged now that uncertainty is the new-normal and a number of companies have thrived during their first six months in a Covid economy, they are starting to make braver moves and we are seeing a lot of more strategic decision making.”


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Hong Kong book closed early due to strong demand

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The Ant Group Co. logo is displayed at the company’s headquarters in Hangzhou, China, on Monday, Sept. 28, 2020.

Qilai Shen | Bloomberg | Getty Images

GUANGZHOU, China — Ant Group will close its Hong Kong institutional book building process a day earlier than expected due to strong demand for its record initial public offering (IPO), a person familiar with the matter told CNBC.

The Chinese financial technology giant is carrying out a dual listing in Shanghai and Hong Kong, issuing an equal number of new shares in each location.

Ant Group’s listing will raise a total of just under $34.5 billion, making it the biggest IPO of all time. The Hong Kong portion will raise around $17.24 billion, before a so-called overallotment option is exercised.

Of the Hong Kong shares issued, 97.5% will go to institutional investors.

According to the source, who was not authorized to speak publicly, the book building will now close at 5 p.m. Hong Kong time on Wednesday, instead of Thursday at 5 p.m. as expected.

A book building process is a period during which investors indicate their interest in an IPO, and submit the number of shares and price they want to subscribe to. If demand is high, the book can be closed early.

Ant Group declined to comment when contacted by CNBC.

Ant Group priced its Shanghai-listed shares at 68.8 yuan each and its Hong Kong shares at 80 Hong Kong dollars.

The company’s Hong Kong shares are slated to begin trading on Nov. 5 with the Shanghai portion expected at the same time.


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Uber and Lyft spending big on Facebook ads for Yes on 22 in California

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Uber and Lyft spending big on Facebook ads for Yes on 22 in California