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Gig economy slammed by virus

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Jeddah – Yasmine El Tohamy – SINGAPORE: Indonesian motorcycle taxi driver Aji chain-smokes and checks his smartphone constantly while waiting for orders by the roadside in downtown Jakarta on a hot June morning, but is staring at the prospect of another fruitless day.

Before the coronavirus outbreak hit, the 35-year-old father of four would ferry at least 20 passengers for a daily income of between $13 and $20 as a driver for homegrown ride-hailing app Gojek.

But when transportation services halted under a city lockdown, Aji considered it a good day if he got more than two food delivery orders, which pay him $0.70 each time. On some days, he has had none. Even with restrictions eased this week, he is struggling to feed his family.

“The situation is that there are many drivers but orders are few,” he said, asking to be identified only by his first name.

Eleven drivers for Gojek and Grab, which is backed by SoftBank Group, in Indonesia, Vietnam and Thailand told Reuters they’ve similarly struggled, with income slashed by more than half as the pandemic batters Southeast Asia.

And, disappointingly, for both drivers and the companies, an increase in food deliveries — forecast as a major growth area for both firms — has come nowhere near compensating for the losses in transport.

Even in Vietnam, seen as a recovery success story, drivers are reeling.

“The pandemic may cost me and many colleagues our vehicles, which we had bought using borrowed money,” said Grab car driver Tung in Hanoi, fearing that lenders may repossess the vehicles.

Unions representing Gojek and larger Singaporean rival Grab, Southeast Asia’s most highly valued startup at $14 billion, say thousands of drivers are in the same situation, especially in Indonesia, both firms’ largest market.

Their plight threatens a core promise of both companies: that they can improve the lives of tens of millions of people across Southeast Asia even as they provide big paydays for their blue-chip corporate and financial investors.

Southeast Asian governments have warned millions could end up jobless as a result of the outbreak.

The two firms said they are supporting drivers with measures ranging from food packages and vouchers to low-interest bank loans and car rental rebates. But the crisis has also led them to cut the subsidies that have fueled their growth.

Doubts have also crept up about the ride-hailing model globally and on whether investors will continue pumping in massive funds into the startups.

Even before the pandemic, Grab and Gojek — like Uber and Lyft in the US and other ride-hailing firms around the world — were operating at a steep loss.

Grab co-founder Tan Hooi Ling has warned the company may potentially face a “long winter.”

Both companies still have plenty of cash. One source with knowledge of the matter said Grab has $3 billion in reserves. Sources familiar with Gojek’s finances said it was finalizing an over $3 billion investment round at a $10 billion valuation; and Paypal announced investments in Gojek’s fintech arm just last week, and it also counts Google and Tencent among its backers.

Each has avoided major layoffs so far, though Grab is implementing voluntary unpaid leave for staff and Gojek is reviewing its services. In the US, Uber, whose Southeast Asia business was bought by Grab, said it would cut 23 percent of its workforce. “Transport has fallen off a cliff, food has held steady, while logistics went through the roof and online payments are high . . . so having a portfolio of products helps,” said Gojek Chief Operating Officer Hans Patuwo. “If we were only a transport company, I’d be quite bowled over.”

Executives and investors at both firms point to the resurgence of orders at Chinese ride-hailing company Didi Chuxing as cause for optimism.

“The rate of recovery will be mostly dependent on when government lockdowns end,” said Grab Operations Managing Director Russell Cohen, noting Grab’s transport business had previously been profitable in several markets.

The crisis has revived speculation among investors about a merger of the two firms, which sources say has been discussed in early 2020, but not led to serious talks.

Gojek said any reports of a merger are inaccurate. A Grab spokesman declined to comment.

Grab and Gojek have long touted the fast-growing food delivery industry as a big opportunity. But with platforms taking only a 20-30 percent commission that is shared with drivers, margins are slim. And growth did not materialize in every market during the lockdowns.

A restaurant chain CEO in Jakarta said that food delivery had not picked up in Southeast Asia’s largest economy due to people cooking more at home and as most orders traditionally consisted of lunches for office workers, who are now at home.

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Judge rejects Prop. 22 backers’ attempt to change gig-work ballot language

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A Sacramento Superior Court judge on Tuesday rebuffed backers of Proposition 22, a referendum aiming to keep some gig workers as independent contractors, in their lawsuit claiming California Attorney General Xavier Becerra wrote a slanted description of their measure.

The attorney general writes the title, summary and label of an initiative that appear on the California ballot and ballot pamphlet and are vital to communicating to voters.

The Yes on 22 campaign charged that Becerra was biased and wrote language painting the measure in a negative light because he is suing Uber and Lyft, two of the major backers of Prop. 22, over their driver classification. Becerra’s lawsuit says that Uber and Lyft drivers should be employees under AB5, California’s new gig-work law — which is exactly what Prop. 22 seeks to avoid.

Besides Uber and Lyft, the other backers of Prop. 22 are DoorDash, Postmates and Instacart. The five companies have put up $110 million so far in their quest to convince voters that drivers and couriers should not be employees, which the companies say would destroy the flexibility those workers rely on. It would also cost the companies hundreds of millions of dollars, and potentially increase the prices consumers pay for rides and deliveries.

Becerra’s language accurately informs voters about the initiative, wrote Judge Laurie Earl in a tentative decision that will become final unless Yes on 22 requests a hearing.

The campaign has until Wednesday afternoon to make that request. The hearing would occur Thursday morning with each side limited to 30 minutes of oral arguments. Yes on 22 did not immediately say whether it will request the hearing.

The title written by Becerra that Yes on 22 objects to reads: “Exempts app-based transportation and delivery companies from providing employee benefits to certain drivers.”

The Yes on 22 campaign charged that “exempt” was a prejudicial term.

But the judge disagreed. “Read as a whole, this is not false, misleading, or inaccurate, and the use of the word ‘exempt’ in the ballot title does not make it so,” Earl wrote. In fact, she wrote, the ballot measure would exempt the companies from complying with various state laws applicable to employees.

Earl rejected Yes on 22’s claim that Becerra’s case against Uber and Lyft meant he was not impartial.

“This lawsuit is irrelevant,” the judge wrote, pointing to precedents that elected state officers are entitled to take public positions on matters of public importance.

The Yes on 22 provided a written statement responding to the ruling from Doug Mead, a freelance writer and Uber Eats and Postmates driver from Palm Springs. The campaign said he was among thousands of drivers who support remaining independent workers.

“The Attorney General is playing politics with the jobs of nearly one million Californians and threatening the services so many families rely on,” Mead’s statement read. “His biased and prejudicial description of Prop. 22 only benefits his special-interest supporters while doing a disservice to California voters.”

The No on 22 campaign, which is backed by organized labor, applauded the tentative ruling.

“The judge’s thoughtful deliberation on this ruling ensures that every Californian will know the unbiased truth when they fill out their ballots in November: Uber, Lyft, and DoorDash are trying to buy themselves a special exemption to roll back drivers’ rights,” said Mike Roth, spokesman for the No on Prop. 22 campaign.

Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid



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IWGB wins workers status and rights for gig economy couriers at CitySprint

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CITYSPRINT couriers’ status as workers with rights was confirmed once and for all today after the company was dragged back to an employment tribunal for the third time.

The Independent Workers Union of Great Britain (IWGB) claimed victory in its battle to gain basic employment rights for five gig-economy workers at the company. 

CitySprint had changed workers’ contracts rather than comply with a previous ruling that they are entitled to holiday pay and the legal minimum wage. 

The company could now be forced to give them thousands of pounds in lieu of the holidays they were denied once its financial liability is established at a final hearing in October.

Claimant Phil Weber said: “This victory over CitySprint shows what strength there is in being part of an active front-line union like the IWGB. I hope it gives others courage. 

“So many ‘gig economy’ courier companies wrongly classify their workforce as self-employed independent contractors. 

“We all know they’re playing the system to deny basic rights like holiday pay and pension contributions, but most workers are afraid to stand up for themselves because, as it is, there’s not enough work to go around and so little job security. We’re left fighting for scraps. 

“But when we are united and fight together, things can turn out very differently.”

The IWGB said it was appalled that it had had to take the company to an employment tribunal three times because the company “was so determined” to deny workers basic protections. 

But yesterday’s victory shows that even when terms of contracts are manipulated, union organising can still win the fight for workers’ rights, the IWGB added. 

General secretary Dr Jason Moyer Lee said: “CitySprint and other ‘gig economy’ companies are making a mockery of the British legal system.  

“If the law were enforced and sanctions were real, CitySprint wouldn’t have dreamed of simply acting like it hadn’t already lost a tribunal claim over its couriers’ workers’ rights. 

“In the absence of the state enforcing the law, the IWGB will continue to hold these cowboy companies to account.”

A separate £43,668.86 holiday pay claim is being made against Royal Mail-owned eCourier on behalf of three couriers transferred from CitySprint.

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Gig-Workers Across CA Protest in Advance of Judge’s Ruling

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Gig-Workers Across California Protest on Thursday 8/6 in Advance of Judge’s Ruling

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Gig-Workers Demand That Uber And Lyft Obey AB 5

This Thursday, August 6, gig-workers across the state of California will be participating in actions demanding that Uber and Lyft obey AB 5 and immediately reclassify their workers as employees. Workers will also be demanding that the companies drop their Prop 22 Ballot Initiative (which the company’s have committed to spend $110m on) which would roll back gig-workers’ rights. This statewide day of action comes in advance of a judge’s ruling on the preliminary injunction motion filed by the California Attorney General in the state’s lawsuit against Uber and Lyft, which will come down at 1:30 PM on Thursday.

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In Oakland, drivers from Gig Workers Rising, Rideshare Drivers United & We Drive Progress will be holding a rally titled “Workers Can’t Wait” to demand the employee status they are legally owed under AB 5. Workers will gather at the East Oakland Lyft Hub and, starting at 11:30 AM, various drivers will speak about the grave mistreatment by the companies and demanding that voters vote no on Prop 22.

In Los Angeles, Mobile Workers Alliance and Rideshare Drivers United will host a joint press conference at a Lyft hub. The action is scheduled to begin at 10:30 AM.

California Attorney General Xavier Becerra and a coalition of city attorneys filed an injunction in June to require Uber and Lyft to immediately begin obeying AB 5, which took effect in January. AB 5 requires the companies to reclassify their drivers as employees. Uber and Lyft argue that they shouldn’t be required to follow the law until after voters vote on Prop 22 in November. Becerra argues the harm currently facing drivers is so great that it would be neglectful to wait until the end of the current litigation. The law is clearly on the workers’ side.



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