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Uber Claims It Won’t Need To Change Its Business Despite Landmark Gig-Worker Law

Uber says it does not expect to make any changes to the way it classifies drivers in California, despite a landmark bill passed by California lawmakers on Wednesday that effectively requires businesses across industries to reclassify independent contractors as employees. Instead, Uber says it is prepared to fight any legal challenges in court and has set aside an additional $30 million for a ballot measure to provide workers with other benefits.

“We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now,” Tony West, Uber’s chief legal officer, told reporters during a press call on Wednesday.

Uber’s argument hinges on the belief that it will meet the standards of the stricter employment test set forth by the bill. California lawmakers passed Assembly Bill 5 on Wednesday, which largely requires companies to convert independent contractors to employees if their work is part of the company’s main business or the company exerts control over their work.

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Uber argues its main business is not drivers and rides, but being a “technology platform for several different types of digital marketplaces.” It also allows drivers to be signed into multiple services, from Lyft to food delivery companies, at once. Because the company believes its workers will still be classified correctly under the new measure, West said Uber will not be automatically reclassifying drivers to be employees in January, when the measure is likely to take effect.

Both Uber and Lyft stock closed in the green on Wednesday on the news that Governor Gavin Newsom, who had already promised to sign the ball, remains in talks with the companies, as first reported by the Wall Street Journal.

Uber’s defiant stance is a throwback to its earliest days of ride-hailing where it made similar arguments that existing laws around taxis and transportation also didn’t apply to its business. There were a lot of lawsuits and a lot of compromises, but Uber eventually tried working through the regulatory red-tape (once it recognized it was there in the first place.)

The employment status of its workers has also been a long-standing fight, and one that the company is clearly anticipating to continue to fight in court. The “gig economy” was largely built off companies from Uber to TaskRabbit to DoorDash utilizing independent employees who could set their own schedules, but didn’t receive benefits like healthcare.

West made it clear that he doesn’t think Uber should be exempt from the rules – the company just doesn’t believe the new bill would result in any change to its employment workforce. “Just because the test is hard, it doesn’t mean we will not be able to pass it,” West said. If anyone disagrees with them, including cities, they would have to challenge Uber directly in court. The company has repeatedly faced court cases, often settling with drivers, but not changing their employment status.

As part of its response, Uber is also coordinating with its rival Lyft to propose a new ballot measure that would offer better benefits for their independent contractor workforce, including a base pay rate. The companies had tried to float it as a compromise during the bill talks, but AB5 passed regardless.

Lyft, who also committed $30 million to the ballot measure, said the state had “missed an important opportunity” when it came to regulating the space.

“The fact that there were more than 50 industries carved out of AB5 is very telling,” Lyft said. “We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need.”

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I’m a San Francisco-based staff writer for Forbes with a focus on Uber, the sharing economy, and startups. I previously worked for Business Insider, Gigaom, and Wired. I also spent a year as newspaper designer for Gannet. I’m a native of Atlanta, Georgia and a proud graduate from Indiana University’s journalism school. Email me story tips at bcarson [at] forbes.com or follow me on Twitter @bizcarson.

Source: Uber Claims It Won’t Need To Change Its Business Despite Landmark Gig-Worker Law

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Can A Toyota Deal Save Uber’s Robotaxi Dreams – And CEO’s IPO Hopes – Alan Ohnsman

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Uber’s self-driving vehicle program has been rocked by a fatal collision, a costly legal fight with Alphabet Inc.’s Waymo and the sudden dissolution of its robotic-trucking project. But a new partnership and investment from Toyota Motor Corp. could help change that and aid Uber’s plans for an IPO by 2019.

The Japanese automotive giant will invest $500 million in the U.S. ride-hailing company and also supply a purpose-built vehicle based on the Toyota Sienna minivan for the project, the companies said in a joint statement. The minivan go into an on-demand pilot ride service in 2021 and use both Uber’s autonomous driving system and Toyota’s suite of automated safety tech features it calls Guardian.

Toyota’s investment and collaboration were reported earlier by the Wall Street Journal.

“The deal is the first of its kind for Uber, and signals our commitment to bringing world-class technologies to the Uber network,” Uber CEO Dara Khosrowshahi said in a statement. “Our goal is to deploy the world’s safest self-driving cars on the Uber network, and this agreement is another significant step towards making that a reality.”

It may be a coup for Khosrowshahi as he works to rehabilitate the San Francisco company’s image, cut costs and improve the balance sheet ahead of his target to take Uber public by next year. The Toyota project also comes days after Uber filled a CFO position that had been empty since 2015.

The partnership also benefits Toyota, which has previously invested in Uber. Though it’s among the world’s most advanced automakers, Toyota has moved more conservatively in the autonomous vehicle space than competitors such as General Motors and Waymo. In January, Toyota CEO Akio Toyoda showed off the e-Palette, a vanlike vehicle for use in ride-share and delivery services, and said Uber might be among the companies that use it.

The Toyota e-Palette, an autonomous vehicle designed for multiple business purposes such as driverless stores, is displayed at CES in Las Vegas, Nevada, January 12, 2018.

The Toyota e-Palette, an autonomous vehicle designed for multiple business purposes such as driverless stores, is displayed at CES in Las Vegas, Nevada, January 12, 2018.Getty

“This agreement and investment marks an important milestone in our transformation to a mobility company as we help provide a path for safe and secure expansion of mobility services like ride-sharing that includes Toyota vehicles and technologies,” Shigeki Tomoyama, Toyota’s executive vice president and head of Toyota Connected, said in the statement.

Uber’s program, which under former CEO Travis Kalanick attempted to catch up to Waymo, formerly the Google Self-Driving Car Project, spent lavishly to do so, including the $680 million August 2016 purchase of Ottomotto LLC, a startup created by former Google driverless car engineer Anthony Levandowski. Kalanick made no secret of his plan to one day replace human drivers on the Uber platform with fully automated vehicles that would be much cheaper to operate.

The company also beat tech rivals by launching a public ride program in Pittsburgh in September 2016, touting it as one of the first large demonstrations of robotic vehicles.

Soon after, Levandowski, who’d co-founded Otto as a provider of autonomous trucking technology, was accused in a federal lawsuit of taking trade secrets stolen from Waymo with him to Uber. Uber eventually fired Levandowski and was ordered to give Waymo an equity stake valued at $245 million in February to settle that lawsuit.

Then, on March 18, one of Uber’s self-driving Volvo XC90 SUVs being tested in Tempe, Arizona, struck and killed Elaine Herzberg, 49, as she was crossing a dark city street. The safety driver doesn’t appear to have been paying attention and a preliminary report by federal safety investigators found that although the vehicle’s sensors detected Herzberg, there was a delay in how rapidly it determined “emergency braking was needed to mitigate a collision.”

Although the National Transportation Safety Board hasn’t yet posted its final findings, the accident was the first fatality for a self-driving vehicle and an enormous blow to Uber’s program.

Then, in July, Uber announced it was discontinuing its robot truck program and would “move forward exclusively with cars,” Eric Meyhofer, head of Uber Advanced Technologies Group, said in a July 30 statement. “We recently took the important step of returning to public roads in Pittsburgh, and as we look to continue that momentum, we believe having our entire team’s energy and expertise focused on this effort is the best path forward.”

While the deal is certainly much-needed good news for Uber, it could also be a win-win partnership for Toyota as it looks to get self-driving vehicles on road the from the early 2020s, a bit after Waymo and GM Cruise robotaxi fleets start rolling out this year and next.

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