‘As workers and riders unite to #StrikeUberLyft, we’re asking: What would it look like for workers to …

In contrast, significant shareholders stand to make tens of millions of dollars including; the government of Saudi Arabia, Travis Kalanick, the company’s …

Uber has been a tech darling since it began “disrupting” the taxi industry eventually embodying the excitement and exploitation of the gig economy. As Uber lurches toward its much anticipated initial public offering (IPO) on the New York Stock Exchange Wednesday, a movement to #StrikeUber has captured the attention of thousands over social media.

While the Uber IPO has Wall Street salivating, drivers will be squeezed. Workers are likely to see their pay decline as the pressures of being a publicly held company demand higher profits. A variety of analysts argued that driver incentives, like higher pay for working during “surge pricing,” could be on the chopping block. In contrast, significant shareholders stand to make tens of millions of dollars including; the government of Saudi Arabia, Travis Kalanick, the company’s co-founder and ex-CEO, venture capitalist Matt Cohler, .

In their prospectus, Uber admits drivers are not happy indicating that, “We expect driver dissatisfaction will generally increase.”

Uber’s business model depends on classifying drivers as contractors to avoid legal protections around wages and overtime. To further prevent attempts to classify drivers as employees, Uber is investing heavily in autonomous driver technologies or self driving cars that would replace the need for humans.

As the Uber and Lyft strike evolved throughout the day, the Democracy at Work Institute commented that,

“As workers and riders unite to #StrikeUberLyft, we’re asking: What would it look like for workers to #OwnTheseJobs? The taxi industry has seen significant success using the #workercoop model to protect wages and job quality.”

A 2015 report from the Democracy at Work Institute explains that the taxi industry is changing.

“Hundreds of new worker-owners have come together in just a handful of companies over the last 10 years, which outpaces the growth of cooperative worker ownership in many other industries.”

Taxi worker cooperatives have launched throughout the country. Founded in 2012, in Portland, Oregon, the cooperative Union Taxi, immediatley improved conditions for taxi drivers. According to Northwest Labor Press, Union Taxi’s driver-owners saw significant wage increases within a year of formation.

Other successful taxi cooperatives include Union Cab in Madison, Wisconsin, Coop Taxi in Montreal, Canada, and COOP Taxi in Seoul, South Korea. Formed in 2014, the 800-person Denver based Green Taxi Co-op is a worker-cooperative, every driver is also a partial owner of the company.

Local municipalities are beginning to support worker cooperatives. Recently $1.2 million in New York City Council funding was approved to support local worker cooperatives. Last month, the City of Madison, Wisconsin passed a plan to provide $1 million per year in support of local worker cooperatives for five years. The City of Minneapolis is offering an initiative to provide training for those interested in starting worker cooperatives and technical assistance for existing worker Co-ops.

Private funders are also supporting cooperative development.

Just yesterday the Independent Drivers’ Guild (IDG) received $25,000 through the Capital Impact Partners’ Co-op Innovation Award to launch a purchasing cooperative that will reduce expenses for drivers including fuel, car washes, oil changes, dash cameras, meals-on-the-go, and car repair. Culturally appropriate meals-on-the-go will be provided by the Drivers Cooperative Café, a worker cooperative that IDG is in the process of establishing.

Building on this first step toward a purchasing co-op, IDG envisions eventually creating a rideshare app to help its drivers compete in the New York City market. The guild represents more than 85,000 for-hire vehicle drivers in New York City, 90 percent of whom are immigrant workers. For these low-wage drivers, these cooperatives are a means of finding more financial stability in a highly competitive industry by providing more take-home pay.

“We are honored to work with Capital Impact Partners and The Workers Lab to pioneer a new union-cooperative strategy to turn the gig economy into a launching pad for the new economy. In the for-hire vehicle industry, workers spend around half of their income on the tools that they need to do their jobs. Developing worker and consumer cooperatives to source these key inputs have the potential to elevate the earnings and transform the lives of thousands of immigrant workers and workers of color in New York City, and eventually around the world,” said Erik Forman, Education Director at Independent Drivers Guild-IAMAW.

In the Uber and Lyft model subcontracted workers actually provide the capital: cars, auto insurance and cash, but are not making a profit. Instead almost half of a driver’s earnings are lost to Uber (after the commission and booking fee). Seth Ackerman writing in Jacobin argues that the most straightforward way for Uber to become a workers cooperative, “would be for cities to adopt regulatory codes that only permit ride-sharing by worker-owned firms. Uber would then seamlessly become a software provider.”

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Why Uber’s Business Model Might Come Undone After IPO

Other well-known investors include Benchmark, whose $30 million stake is set to make around $7.9 billion, and Menlo Ventures, whose $67 million …

Nothing new can come from a situation without suffering. If any new understanding about the nature of platform companies is to materialize in 2019, it will be because of the extreme over-valuation of Uber, on full display this week.

Uber’s valuation at IPO this Friday, based on its tentative offering price, will be $84 billion. The company is seeking to raise as much as $9 billion, and is expected to be the year’s biggest U.S. IPO. Only two other U.S. IPOs have ever been more valuable: Alibaba in 2014, at a value of $167 billion, and Facebook in 2012, at a value of $104 billion.

The biggest winners this time will include Jeff Bezos, whose $3 million personal investment in Uber, is likely to be worth $400 million. Other well-known investors include Benchmark, whose $30 million stake is set to make around $7.9 billion, and Menlo Ventures, whose $67 million investment is expected to become about $3 billion. But the question for the public is, should we join in? What can academic research tell us?

In explaining the dynamics of a “platform economy,” as opposed to those of a traditional economy, economists and business researchers routinely use the “network effect” as a way of describing the value of a platform. This value largely depends on the number of users on either side of the exchange. The more riders a ride-sharing platform has, for instance, the more attractive it becomes to drivers, leading even more people to use it. And once a platform reaches a certain size, the thinking goes, it becomes too dominant to unseat. In other words, a platform economy has no room for multiple players; the market equilibrium will forever move toward a monopoly. So Google dominates search engines, Facebook rules social networks, Twitter towers over microblogging, and Netflix, YouTube, and Spotify have cornered the movie-streaming, video-sharing, and music-streaming markets, respectively.

If we follow this logic, however, there should be either Uber or Lyft, but not both. And we’ve seen that coming with Uber’s moves in international markets. It sold its China operation to Didi Chuxing in 2016, not because of political pressure from Beijing, but because of fierce competition from local players. A year later, in 2017, Uber sold its operation in Russia to Yandex. This was followed by yet another exit in March 2018, when Uber bowed to Grab by selling off its Southeast Asian operation in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. It’s easier for Uber to achieve scale than to sustain it.

This explains, in part, why although Uber is operating in more than 700 cities around the world, 24 percent of the total bookings occur in just five of those—New York, Los Angeles, San Francisco, London, and Sao Paulo. Outside those core cities, Uber faces fierce local competition. Latecomers in these local markets emulate what Uber does and outdo it. Uber still had a monthly average of 91 million active users at the end of 2018, but growth had slowed from 51 percent a year earlier to 33.8 percent.

Investors often invest in money-losing businesses because they believe tech companies that begin with modest goals and creative business plans will soon follow the growth script of Amazon in realizing their own routes to infinity and beyond.

To knit together precisely that precious narrative for an IPO, CEO Khosrowshahi positioned Uber as the hub for disparate categories of transport. It included Uber Eats, a food-delivery service; Uber Freight, a trucking business; and Jump, a shared scooter and bike operation. Khosrowshahi equated Uber to Amazon. But Uber has never been about building infrastructure. Amazon built not only a website and an app, but warehouses, logistic networks and I.T. systems. Uber never did. It uses two cloud computing providers: AWS and Google Cloud. Uber didn’t even develop its own maps; it spent tens of million to use Google Maps. The paradox is this: Lots of businesses require heavy investment. Cellular phone operators and cable TV companies all have to spend billions to build their physical networks. But that investment is finite, whereas Uber is spending cash not on building physical assets, but on buying market share, pushing driver incentives and rider discounts, and advertisements. These are infinite expenditures, limited only by a company’s ability to raise money from venture capital firms and IPO. That’s how Amazon lost $2.8 billion over its first 17 quarters as a public company, while Uber lost over $4 billion in 2017 alone.

One bright spot that Uber seeks to highlight in its IPO filing is on “platform synergies,” where “each new product adds nodes to [its] network and strengthens these shared capabilities,” which in turn will “fuel multiple virtuous cycles of growth.” It claims that “Uber Eats is used by many of the same consumers who use our Ridesharing products, [and] is built on our existing technology stack.” And so in the future, Uber can “can more efficiently launch other products and offerings, such as dockless e-bikes and e-scooters, by leveraging our existing network of Drivers and consumers and regional on-the-ground operations teams.”

Such strong cycles of growth won’t be possible without an integrated data strategy. Any data scientists would agree that data sets become geometrically more valuable when you combine them. Combined data sets often reveal insights and business opportunities that could not have been imagined previously. When Google introduced Gmail, it built a data set that was largely able to duplicate a user’s identity. Combining the two data sets prompted a huge increase in value, as future AdWords ads would have more worth for the advertiser and, by extension, for Google. The same thing happened again with Google Maps, which enabled Google to tie identity and purchase intent to location. Each time Google introduces a new service, it finds new use cases for user data by combining data sets. This is also the allure of Uber; the company can recombine data stemming from its core business and then invade an adjacent business line for growth.

Still, this business logic could come undone. Last year, Europe introduced its General Data Protection Regulation (GDPR) in an effort to thwart consumers being treated as commodities. Consumers must give their consent before a company such as Uber can start to collect personal data, and the company must explain why data is collected and how it is used. The company is not allowed to use that data for different purposes later on. There has been talk, and even a legal action started in Germany, aimed at prohibiting Facebook from integrating Messenger, Instagram and WhatsApp as it seeks to combine user data from different sources. Another German initiative proposes that dominant platforms must share bulk, anonymized data with competitors, meaning all transport firms would have access to Uber’s information about traffic patterns.

Europe would obviously have limited influence on Uber’s global strategy. But Europe remains the most profitable market outside of the U.S., a market that no tech firm can completely ignore or defy. London is currently one of the top five cities that produces the most bookings for Uber, and the U.K. is the GDPR regardless of whether Brexit proceeds. Perhaps most problematic for Uber is that many countries around the world are emulating Europe’s position on data protection and consumer privacy. Thus, the investment thesis inspired by the platform economy of the past—winners take all; competition is for loserscannot hold. There might not be a tech bubble that bursts as badly as in the 90s, but the growth prospects of Uber and its competitors will diminish.

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New Opportunities In Global AIOps Platform Market With Economic Growth And Five Forces …

… VMware Inc, Micro Focus International plc, HCL Technologies Limited, AppDynamics LLC, BMC Software Inc, Moogsoft Inc., FixStream Network Inc.

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Small business owners can win up to $100000 courtesy of Nationwide and BlueVine

… institutional investors, including Lightspeed Venture Partners, Menlo Ventures, 83North, Citi Ventures, SVB Capital, Rakuten, Nationwide Insurance, …

Nationwide, BlueVine unveil ‘Pitch To Win’ Competition for Small Business Owners

COLUMBUS, Ohio and REDWOOD CITY, Calif., May 6, 2019 /PRNewswire/ — Small business owners: How would you take your company to new heights if you had an extra $100,000? Nationwide and BlueVine just unveiled a new small business contest that offers you the opportunity to compete for up to $100,000.

Blue VineBlue Vine

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Blue Vine

“Pitch to Win” is a national, small business competition that delivers big rewards. Nationwide, #1 in Customer Satisfaction with Small Commercial Insurance,* and small business lending companyBlueVine, are launching the competition as part of National Small Business Week to give small business owners the chance to compete for cash prizes by presenting a unique and compelling business proposal.

Small businesses of all types are encouraged to enter. Business owners can submit their proposals atwww.pitchtowinbig.com. The deadline to enter is June 30. Contest rules can also be found on the “Pitch To Win” site.

“The backbone of our national economy is built on the ingenuity and innovation of small business owners,” said Tony Fenton, vice president of underwriting, product & new product development at Nationwide. “Big ideas win in the marketplace, but capital is critical to success. We’re excited to see America’s best and brightest business owners pitch their ideas to win the capital to help bring their dreams to life.”

At the end of the entry period, Nationwide and BlueVine will narrow the list to the small businesses with the best pitches. The finalists will receive an all-expenses-paid trip to Nationwide’s headquarters in Columbus, Ohio, where they will present their proposal in person to an executive panel of judges. The finalists will also get to meet and consult with experienced business experts.

The winning proposal will receive $100,000 from Nationwide and BlueVine. The runner up will get $20,000, with third place receiving $10,000. The awards will be non-dilutive, meaning business owners will not be required to give any ownership of their company.

“A 2017 Federal Reserve bank reports that almost half of all U.S. businesses are looking for external capital to scale their company,” Fenton said. “The ‘Pitch To Win’ competition creates a unique and engaging opportunity for small business owners who face this reality every day.”

“BlueVine is excited to partner with Nationwide to give business owners an opportunity to supercharge their business growth. Growing a business takes hard work, dedication, and often a fair amount of funding, and we hope the contest can highlight that effort and bring business owners one step closer to their dreams,” said BlueVine CEO and Founder Eyal Lifshitz. “For us at BlueVine, the contest marks another important step toward a deeper and more meaningful partnership with Nationwide and our joint mission to help small businesses grow.”

Semifinalists will be announced in August on the Nationwide and BlueVine social media platforms. Winners will be announced in October after the “Pitch To Win” event.

Learn more atwww.pitchtowinbig.com.

About BlueVine

BlueVine provides small and medium-sized businesses with fast and simple access to online financing. BlueVine’s advanced online platform is intuitive and offers a fast and convenient solution for a business’ working capital needs. BlueVine offers a suite of products designed to meet the diverse financial needs of today’s business owners. With revolving Line of Credit, business owners can access flexible funds on demand; with Term Loan, business owners can get a lump sum amount to grow their business. With Invoice Factoring, business owners can unlock funds online, from their unpaid invoices. Based in Redwood City, California, BlueVine has provided small and medium-sized businesses with access to nearly $2 billion in financing and is backed by leading private and institutional investors, including Lightspeed Venture Partners, Menlo Ventures, 83North, Citi Ventures, SVB Capital, Rakuten, Nationwide Insurance, and M12 (Microsoft’s Venture Arm). All lines of credit and term loan products are issued by Celtic Bank, a Utah-chartered Industrial Bank, Member FDIC.

Certain financing may be made or arranged pursuant to California Financing Law-License No. 6054789. Applications are subject to credit approval. Rates and terms may vary based on your creditworthiness and are subject to change.

For more information, please visitwww.bluevine.com.

About Nationwide

Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.

Nationwide, Nationwide is on your side and the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. © 2019

*Nationwide received the highest score in the J.D. Power 2018 Small Commercial Insurance Study of customers’ satisfaction with their insurance provider. Visit jdpower.com/awards.

Nationwide contact:

Jarrett Dunbar

(614) 249-1591

Dunbaj1@nationwide.com

BlueVine contact:

Ali Mapplethorpe

(415) 675-1457

bluevine@highwirepr.com

(PRNewsfoto/Nationwide)(PRNewsfoto/Nationwide)

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(PRNewsfoto/Nationwide)
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Cision

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Gig economy workers deserve basic protections that come with employee status

Uber, Lyft and other app-based employers call drivers like Bayumi “independent contractors,” meaning, in theory, Bayumi is his own boss. But he has …
By Art Pulaski, Special to CALmatters

Like so many California families, Karim Bayumi of Anaheim, his wife and two young children are doing everything they can to scrape by.

Bayumi drives for a large rideshare company as his primary source of income. On March 11, Bayumi’s rate was cut from 80 cents a mile to 60 cents a mile, just barely above the government mileage reimbursement rate. No warning. No explanation. In an instant, a chunk of his income just disappeared.

Uber, Lyft and other app-based employers call drivers like Bayumi “independent contractors,” meaning, in theory, Bayumi is his own boss. But he has no ability to set his own rates, and the companies have the power to deactivate him at any time through no fault of his own.

The companies even mandate drivers take a certain number of rides per week if they want to earn the best possible rate, meaning his flexibility to work when he wants is extremely limited.

Bayumi works in what’s been called the gig economy. But like so many others, for him, this isn’t a gig. It’s his job. And he’s not even making minimum wage. He doesn’t have unemployment insurance. There’s no workers’ compensation if he’s injured. No overtime if he puts in extra-long days.

“We’re labeled independent contractors but they don’t treat us as independent,” Bayumi says.

The proliferation of corporations arbitrarily classifying workers as contractors to cut costs is part of a larger fissuring of the workplace that makes full-time stable employment increasingly hard to find.

Recognizing the disastrous nature of this trend to California workers and our economy, the California Supreme Court issued a landmark decision in the Dynamex Operations West case last year that set up a simple A-B-C test employers must use to determine if a worker is an employee or an independent contractor.

This isn’t a new idea. A similar test is used in several other states. The ruling simply states that to be called independent, a worker must be free from employer control, doing work outside the regular scope of the business, and independently established in that trade.

For example, if a graphic designer offers her services to a restaurant to design a menu, she meets the definition of independent. And there will always be a place in the economy for true independent contractors.

Unfortunately, workers in many fields, including construction, truck driving, health care and in the on-demand economy have been misclassified as contractors just so the companies employing them can shave costs by nixing basic worker protections.

These companies are also cheating California out of tax revenue to the tune of $7 billion a year, meaning that they aren’t paying their fair share for our schools, public safety, roads and bridges.

Despite the ruling, mega-corporations in the gig economy continue to flout the law. These companies have settled lawsuits and are being challenged in arbitration by drivers who have been misclassified. And while IPOs are bringing rideshare companies tens of billions of dollars in investment, the companies continue to mistreat drivers who are the backbone of their businesses.

In response to this growing problem, the California Labor Federation strongly supports Assembly Bill 5 by Democratic Assemblywoman Lorena Gonzalez of San Diego.

AB 5 would codify the Dynamex case into California law, and clarify to whom the law applies. This bill provides certainty to California businesses and workers. The measure has the potential to bring hundreds of thousands of workers currently cheated out of wages and basic protections into employee status.

The bill would also level the playing field for business owners who follow the law, eliminating the competitive disadvantage they currently face against employers who cheat.

AB 5 has broad support of worker advocates, community groups and responsible businesses. And for workers like Bayumi, its passage would be life-changing.

On May 8, Bayumi and thousands of other Uber and Lyft drivers are going on strike across the state to call for basic rights and protections like those afforded through AB 5.

“We’re going on strike because we’re angry and frustrated,” Bayumi said. “There have to be some standards in the rideshare industry. These companies do whatever they want. They don’t answer to anyone. We’re just trying to make a living.”


Art Pulaski is chief 0fficer of the California Labor Federation, [email protected] He wrote this commentary for CALmatters. For his previous CALmatters commentary, please click here.

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