Uber And Lyft Spent Millions To 'Delay The Inevitable'

Lyft in SF back in 2014.
Lyft in SF back in 2014.
Photo: Getty Images (Getty Images)
The Morning ShiftAll your daily car news in one convenient place. Isn't your time more important?

As the dust refuses to settle on the national election, we do have at least one clear result: California voted yes on Prop 22. That yes vote means that gig workers have lost in what has a typically confusing but extraordinarily expensive (the most expensive in history!) ballot measure. All that and more in The Morning Shift for November 4, 2020.

Advertisement

1st Gear: $206 Million Spent Where ‘No’ Vote Is Positive

Any Californian of voting age will be familiar with the basic tactic of Prop 22: getting the good outcome for gig workers meant voting “no” on your ballot.

Advertisement

What is new is how much app companies spent on the case, as our colleagues at Gizmodo note:

Thanks to the passage of Uber, Lyft, DoorDash, and Instacart’s ballot measure Prop 22, rideshare companies and delivery apps officially don’t have to classify an estimated 500,000 California workers as employees, or grant them the benefits and workplace protections to which they should be entitled. Together, through the historically well-funded $206 million Yes on Prop 22 campaign, the companies spent about as much money as Uber and Lyft should have paid the state of California in unemployment insurance over two years. Now they don’t have to for the foreseeable future.

This is an order of magnitude more than what the No campaign spent, as Vice reports:

On the other side of the issue was a grassroots campaign run by driver advocacy groups and organized labor, which spent just over $20 million.

“We’re disappointed in tonight’s outcome, especially because this campaign’s success is based on lies and fear-mongering. Companies shouldn’t be able to buy elections,” Gig Workers Rising, a California-based driver advocacy group said in a press release early Wednesday morning. “But we’re still dedicated to our cause and ready to continue our fight. Gig work is real work, and gigi workers deserve fair and transparent pay, along with proper labor protections.”

Advertisement

It’s Edward Ongweso Jr at Vice who points out in that article that Prop 22 is at best “delaying the inevitable” for an industry that is based on exploitation and staunchly unprofitable:

This is undoubtedly a victory for capital over labor, and one that will likely allow the unprofitable gig economy to continue limping along at the expense of workers. It does not, however, change the reality that the “gig” business model is doomed in the long-term.

[...]

California voting Yes on Prop 22—which includes fine print that any changes to it must be passed with a seven-eighths majority in the state’s legislature—is a huge setback for labor. It will trap hundreds of thousands of workers under a permanent misclassification scheme that rewards a racist business model that disproportionately hurts Black and brown workers. Despite all this, Proposition 22 is not the final say on this matter in the U.S. or internationally.

Advertisement

Vice goes on to point out that other states are prepping their own measures against app companies depriving gig workers of due wages and protections, foreign governments are starting to demand dodged taxes from app companies, and driver protests remain strong across the world.

These coming years will be a question of just how deep the pockets of app companies are, and if they can hold off the world, not just California.

Advertisement

2nd Gear: Car Sales Back Down In Europe

It was looking good for a minute there! But sales are going back down in Europe as shit gets real with Covid again. Bloomberg reports:

Car sales fell in Europe’s four largest auto markets last month, signaling demand has relapsed in the midst of another wave of the coronavirus cases hitting the region.

German new-car registrations dropped 3.6% in October from a year ago, the country’s Federal Motor Transport Authority said Wednesday. Sales plunged by more than a fifth in Spain, slumped 10% in France and slipped 0.2% in Italy, suggesting the industry will be unable to maintain the surprise growth seen in September.

Advertisement

I am expecting similar news for the US any day now.

3rd Gear: Even BMW Is Cautious And It’s On Track For Profit

Sales have been up for BMW, as have profits. That’s largely thanks to recovery and record sales in China. Even then, BMW is remarkably gloomy about the news, as Bloomberg also reports:

BMW confirmed its full-year profit forecast on the back of rising sales in China. Still, the German luxury carmaker cautioned that Covid-19 is worsening in Europe’s biggest markets, with fresh lockdowns threatening to crimp demand for its automobiles.

“The pandemic is now clearly regaining momentum,” BMW said Wednesday in a statement. If it worsens and drags down the global economy, “the risk exposure could be considerable, particularly on the demand side.”

Advertisement

4th Gear: Subaru Beats Mitsubishi

While the two AWD-oriented companies are no longer duking it out for the top step of World Rally Championship podiums, Subaru still managed to come out with a profit at the same time that Mitsubishi suffered losses, as Automotive News reports. First, Subaru, per AN:

Profits at Subaru Corp. surged 18-fold in the latest quarter as the automaker rebounded from a year-earlier period when earnings were hammered by huge warranty costs.

The stronger results came even as sales took a hit due to the COVID-19 pandemic, but Subaru showed signs of recovering from that slowdown as well.

Reflecting the improved environment, Subaru lifted its forecasts for profits, sales and revenue in the current fiscal year.

Advertisement

And Mistubishi, per Reuters:

Mitsubishi Motors Corp. on Wednesday reported a 29.3 billion yen ($279.1 million) operating loss in the quarter ended Sept. 30 compared with a 6.3 billion yen ($60 million) profit a year earlier as sales shrank amid the coronavirus pandemic.

The automaker is cutting its workforce and production capacity, and closing unprofitable dealerships in a bid to slash fixed costs by a fifth within two years.

“Our restructuring plan is progressing faster than we anticipated. We have cut costs faster than we initially planned,” Takao Kato, Mitsubishi Motors’ CEO, said in a telephone press briefing after the company released its results.

Advertisement

Obviously, what Mitsubishi must do is sell the Delica here and re-enter the WRC. It’s clear as day.

5th Gear: Germans Plan Dream Development In Greece

While Germany hunkers down under Coronavirus, some local residents are still planning trips to the country’s favorite vacation destination. For VW, this is under the guise of eco-conscious business, as Bloomberg reports:

Volkswagen Group will launch a pilot project for climate-neutral mobility on the Greek island of Astypalea, in the eastern Aegean sea, as part of the German automaker’s efforts to roll out electric vehicles and curb emissions.

Car- and ride-sharing offerings will help reduce traffic, and vehicles on the island will switch to electric powertrains that will recharge mostly with locally produced renewable energy, VW said Wednesday.

[...]

The automaker will replace about 1,500 combustion-engine vehicles with 1,000 electric models in Astypalea, including the new ID3 compact and ID4 crossover, as well as e-scooters from the group’s Spanish brand Seat and electric bikes. Police vehicles and cars for other local authorities also will be electrified.

Advertisement

Germany’s modern history with Greece and debt is a cruel one, but hey, at least Greece is going to get some scooters!

Reverse: We Tried, At Least, For A Minute There

Advertisement

Neutral: How Was The Prop 22 Campaign In Your Area?

If for some reason you are awake in California right now, let us know how the Yes On 22 campaign inundated your eyeballs. I’m curious what $206 million buys you in terms of marketing.

Raphael Orlove is features editor for Jalopnik.

Share This Story

Get our newsletter

DISCUSSION

Excuse me? Some of us who live in California can read the ballot propositions and decide on our own what’s good for our state. Gig apps shouldn’t be full time jobs. Gig is right there in the name. I’m done with this site and it’s BS condescending articles.