The Lie That Makes Uber Possible Just Got Cut Down

A protest against Uber in London in 2016.
A protest against Uber in London in 2016.
Photo: Getty Images
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Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.

1st Gear: California Rules That Those “Subcontractors” Are Employees

Uber has survived on two main points over the past few years. 1) Endless investment wealth pouring in from Silicon Valley dupes and 2) Uber managing to get away with classifying all of the people who work for Uber as not employees, and thus not the responsibility of Uber when it comes to healthcare, a decent living wage, or any other form of decency.


The madness of Silicon Valley investing still continues, but California just dealt a huge blow to that second part of Uber’s business model, as the New York Times reports:

In a ruling with potentially sweeping consequences for the so-called gig economy, the California Supreme Court on Monday made it much more difficult for companies to classify workers as independent contractors rather than employees.

The decision could eventually require companies like Uber, many of which are based in California, to follow minimum-wage and overtime laws and to pay workers’ compensation and unemployment insurance and payroll taxes, potentially upending their business models.

Uber has been getting away with this kind of thing for way too long, and it’ll be nice to see the company get pushed to at least treat the people who work for it like human beings.

2nd Gear: Nikola Sues Tesla Over Truck Design

One company that does not have a vehicle on sale is suing another company for another vehicle also not on sale, because this how the world of automotive startups works.


The companies in question this time are Nikola (which wants to make hydrogen-powered semi trucks) and Tesla (which wants to make battery-electric semi trucks). Nikola claims that it patented the design for a truck that, hey, sure looks a lot like the one Tesla has been showing off, as Reuters reports:

U.S.-based Nikola claims it was issued six design patents by the U.S. Patent and Trademark Office between February and April 2018 for its wrap windshield, mid-entry door, fuselage, fender, side cladding and the overall design of the Nikola One.

“Nikola estimates its harm from Tesla’s infringement to be in excess of $2 billion,” the company said in the filing.

A Tesla spokesman rejected the claims.

“It’s patently obvious there is no merit to this lawsuit,” a Tesla spokesman said.


I don’t know, man. Trucks don’t look that different from each other? Either way, it’ll be fun to see what comes first: this case getting resolved, or either company putting a truck into production.

3rd Gear: Hard Times For BYD, Warren Buffett’s Favorite Car Company

As someone who loves driving cars, reading about cars, working on cars, looking at cars, I have a kind of distaste for anyone who sees cars and car companies only as investments and business opportunities. “Can’t they see the magic?” I scream. “Can’t they see that there’s more to this than an industrial product?”


So it’s an interesting story to me when investors are struggling with BYD, the Chinese carmaker that is very lightly trying to bring electric vehicles to the United States. I’ve seen a few here already, and I appreciate BYDs as interesting cars.

Meanwhile the rest of the world sees BYD for one thing: It’s Warren Buffett’s favorite car company, in which he is heavily invested. That side of things hasn’t been going great, with BYD’s stock getting downgraded this week and last week, losing another 2.1 percent just today, as Bloomberg reports:

The rout in BYD Co. shares is nearing $9 billion as investors desert what was the world’s top stock only months ago.


Investors and analysts alike are losing faith in BYD’s ability to thrive with fewer government subsidies and growing competition, with the company last week predicting first-half profit may tumble as much as 83 percent. It’s among the year’s worst performing Chinese companies in Hong Kong, and has given back almost all of the gains triggered by last year’s euphoria over China’s plan to get rid of fossil-fueled cars.


Maybe this will flush out all the people investing in the company for the stock value alone. Only real heads will remain.

4th Gear: Nobody Can Say How Blockchain Will Work For Cars, But They’re Looking Into It Anyway

Today in blockchain news, the automotive industry redoubled (??) its commitment (???) to blockchain (????), as Automotive News reports. The Mobility Open Blockchain Initiative just had a conference in Dubai (this story is already super legit) in which it claimed that General Motors, BMW, Renault, Bosch, ZF Friedrichshafen and IBM “would be” part of its organization. This would mean that they’d all be researching how blockchain will apply to cars, something that nobody involved with the process understands. Per AN:

There could be many practical uses for blockchain in the automotive industry, such as allowing consumers to pay for tolls and electric vehicle charging stations as well as creating public records that track vehicles and parts in the supply chain. The technology’s rise, however, in the shadowy world of cryptocurrency bitcoin, has left some companies hesitant to embrace it.

“It’s a big buzzword, but very few people understand it,” said Sachin Lulla, IBM’s automotive lead. “Which is why these consortiums play a big role; they bring the technology to life.”


Yeah, definitely. The partners in the partnership will ensure the success of the partnership, which we all understand and know to be good. Yep.

5th Gear: Mercedes Outsells BMW And Lexus In The U.S.

Who leads lux? Benz leads lux, at least in the U.S. so far this year, per Automotive News, which confusingly shortens “luxury” to “luxe,” which feels less luxurious than it could:

Mercedes’ U.S. sales inched 1 percent higher in April to 27,207, excluding the brand’s commercial van sales. U.S. sales at Mercedes for January through April dipped 0.4 percent to 105,681 from a year ago. BMW sales rose 3.8 percent in April to 23,482, while Lexus volume dipped 2.1 percent to 21,642.

Rounding out the luxury segment’s top five brands in April U.S. sales were Audi, with sales of 19,104, up 2.1 percent; and Acura, with deliveries of 11,888, down 16 percent.

Even with a dip in volume, Mercedes remains in first place among luxury brands year to date, followed by BMW (97,317) and Lexus (85,853).


If you’re wondering what Mercedes’ top seller was, it was the GLC crossover, though the C-class was at least close behind.

Reverse: So It Begins


Neutral: How Long Does Uber Have Left?

We wrote Uber Is Doomed back in the start of 2017, and somehow it has just been plugging away since then in a kind of downward spiral in a room with no floor. How much time to you give the company before its fairytale startup exemptions to how a company should work finally go away, and its chariot turns back into a pumpkin?

Raphael Orlove is features editor for Jalopnik.

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Jerk Dently

Uber - I understand the issues with the subcontractor thing, but I hope drivers realize the freedom they currently have will be curtailed. They will have to work minimum number of hours a week to qualify for benefits and Uber can limit the number of hours a week they allow them to work to 40 and under so they don’t have to pay them overtime.