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The end of Uber and Lyft’s business models? Good.

[BUSINESS NEWS] Uber and Lyft must reclassify their drivers as employees, which could spell the end of the sharing economy as we know it. Here’s why that’s great news.

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Here’s a pitch you’ve probably heard before: “It’s like Uber but for…” Then fill in the blank with whatever concept you want.

There’s a new problem with that line, besides how meaningless it is. According to California’s courts, Uber’s model – and by extension, much of the gig economy – is built on a labor rights violation.

Superior Court Judge Ethan Schulman ruled that rideshare drivers could no longer be considered independent contractors, under California’s Assembly Bill 5.

The majority of rideshare drivers work full-time, but are not provided with benefits that would ordinarily be guaranteed to a full-time employee, like healthcare and worker’s compensation. AB5 was passed last year in order to hold gig companies, namely Lyft and Uber, responsible for providing those benefits to their workers. But when the law took effect earlier this year, the companies refused to comply with it.

Judge Schulman asserted in his ruling that for Uber to consider its tech workers to be employees, while relegating drivers to a contractor status, “flies in the face of economic reality and common sense.”

“Were this reasoning to be accepted, the rapidly expanding majority of industries that rely heavily on technology could with impunity deprive legions of workers of the basic protections afforded to employees by state labor and employment laws […] it bears emphasis that these harms are not mere abstractions; they represent real harms to real working people,” wrote Schulman. “To state the obvious, drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business.”

In a statement about the ruling, Lyft claimed that providing these benefits would really go against the interests of their drivers: “[They] do not want to be employees, full stop. We’ll immediately appeal this ruling and continue to fight for their independence.”

(Rather bold of them to speak for all of their drivers there, but I digress.)

Either way, the ridesharing model appears to be on its way out. Uber and Lyft have historically struggled to turn a profit, with UberEats actually generating more money for the company than their taxi service does. COVID-19 has not helped matters, either.

As Brian Merchant wrote for One Zero, ridesharing relied on “a constellation of fantasies” for its success.

When Uber and Lyft were launched, they promised to ease demand on crowded city streets by encouraging customers to carpool to their destination, thus reducing the number of individual cars on the street.

But as Merchant highlights, the reality of ridesharing is very different: Solo riders and full-time drivers are the norm, and the rideshare business has contributed to congestion and increases in carbon emissions in major cities. None of this has been good publicity for the industry, either.

Will either company survive this?

The final verdict on whether rideshare companies will be able to continue operating through independent contractors will be left to California voters on the 2020 ballot, in the form of Proposition 22.

Desmond Meagley is an award-winning writer, graphic artist and cultural commentator in D.C. A proud YR Media alumn, Desmond's writing and illustrations have been featured in the SF Chronicle, HuffPost, Teen Vogue, The Daily Cal, and NPR among others. In their spare time, Desmond enjoys vegetarian cooking and vigorous bike rides.

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Business News

Leadership versus management: What’s the difference?

(Business News) The two terms, leadership and management, are often used interchangeably, but there are substantial differences; let’s explore them.

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leadership Startups meeting led by Black woman.

Some people use the terms “leader” and “manager” interchangeably, and while there is nothing inherently wrong with this, there is still a debate regarding their similarities or differences.

Is it merely a matter of preference, or are there cut and dry differences that define each term?

Ronald E. Riggio, professor of leadership and organizational psychology at Claremont McKenna College, described what he felt to be the difference between the terms, noting the commonality in the distinction of “leadership” versus “management” was that leaders tend to engage in the “higher” functions of running an organization, while managers handle the more mundane tasks.

However, Riggio believes it is only a matter of semantics because successful and effective leaders and managers must do the same things. They must set the standard for followers and the organization, be willing to motivate and encourage, develop good working relationships with followers, be a positive role model, and motivate their team to achieve goals.

He states that there is a history explaining the difference between the two terms: business schools and “management” departments adopted the term “manager” because the prevailing view was that managers were in charge.

They were still seen as “professional workers with critical roles and responsibilities to help the organization succeed, but leadership was mostly not in the everyday vocabulary of management scholars.”

Leadership on the other hand, derived from organizational psychologists and sociologists who were interested in the various roles across all types of groups.

So, “leader” became the term to define someone who played a key role in “group decision making and setting direction and tone for the group. For psychologists, manager was a profession, not a key role in a group.”

When their research began to merge with business school settings, they brought the term “leadership” with them, but the terms continued to be used to mean different things.

The short answer, according to Riggio is no, not really; simply because leaders and managers need the same skills to be productive and respected.

This editorial was first published here in June of 2014.

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Does Raising Cane’s have the secret to combatting restaurant labor shortages?

(NEWS) Fried Chicken Franchise, Raising Cane’s, has turned to an unusual source of front-line employees during the labor shortage- Their executives!

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White paper sign with black text reading "Help Wanted."

I wouldn’t call myself a fried chicken aficionado or anything, but since chains are designed to blow up everywhere, I have experienced Raising Cane’s.

I’m pretty sure the Cane’s sauce is just barbecue mixed with ranch, but hey, when you’ve got a good idea, keep with it.

In the further pursuit of good ideas, the company has resorted to an intriguing method of boosting staff in a world where the lowest paid among us are still steadily dying of Covid, and/or choosing to peace out of jobs that they don’t find worth the infection risk.

Via Nation Restaurant News: “This is obviously a very tough time, so it was a joint idea of everybody volunteering together to go out there and be recruiters, fry cooks and cashiers —whatever it takes,” said AJ Kumaran, co-CEO and chief operating officer for the Baton Rouge, La.-based quick-service company, from a restaurant in Las Vegas, where he had deployed himself.”

The goal of this volunteer mission, which involves 250 of the 500 executives deployed working directly in service roles, is to bolster locations until 10,000 new hires can be made in both existing locations and locations planned to open.

It’s obvious that this is a bandaid move – execs exist for good reason, and in terms of sheer numbers (not to mention location and salary changes), this is hardly tenable long-term. But I can say this as someone who’s gone from retail to office, and back (and then forth…and then back again) several times – if this doesn’t keep everyone at the corporate level humble, and much more mindful of employees’ needs, nothing will.

The fast-food world is notorious for wonky schedules only going up a day before the week begins, broken promises on hours (both over and under), horrendous pay, and little to no defense of employee dignity in the face of customers with rank dispositions. With the wave of strikes (Nabisco, John Deere, IATSE) making the news, and lack of hazard pay/brutal physical attacks over mask mandates still very fresh in workers’ minds, smart companies are hipping themselves to the fact that “low level” employee acquisition and retention needs to be much more than the ‘work here or starve’ tactics that have served since the beginning of decades of wage stagnation. The best way for that fact to stay front-of-mind is to go out and live the truths behind it.

In Raising Cane’s case, the company also announced that they’re upping wages at all locations — to the tune of an actually not totally insulting $2 per hour, resulting in a starting wage of $15 and a managerial wage of $18.

Ideally, paying people more to cook, clean, and customer service all in one job will actually attract people back to fast food work. Seriously consider the fact that the people cleaning fast-food toilets are the same people making the food that goes into your mouth. The additional fact is that it’s better for everyone’s health when they’re paid enough to care about what they’re doing and stay healthy themselves.

Of course, one does also need to consider how much inflation has affected the price of goods and housing since the ‘fight for $15’ began almost a decade ago in 2012. Now, raising wages closer to the end point of multiple goods still might not be enough!

AJ Kumaran continued, “The chicken prices are through the roof. Logistics are very hard. Shipping is difficult. Simple things cups and paper napkins — everything is in shortage right now. Some are overseas suppliers and others domestic suppliers. Just in poultry alone, we have taken significant inflation.”

That’s global disruption for ya.

It remains to be seen whether this plucky move can save Raising Cane’s dark meat, but I’m very pro regardless. Send more top-earning employees into the trenches! No more executives with 0 knowledge of how the sausage sandwich gets made.

No more leading from behind.

Why not? What are ya? Chicken?

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Business News

Unify your remote team with these important conversations

(BUSINESS NEWS) More than a happy hour, consider having these poignant conversations to bring your remote team together like never before.

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Cultivating a team dynamic is difficult enough without everyone’s Zoom feed freezing halfway through “happy” hour. You may not be able to bond over margaritas these days, but there are a few conversations you can have to make your team feel more supported—and more comfortable with communicating.

According to Forbes, the first conversation to have pertains to individual productivity. Ask your employees, quite simply, what their productivity indicators are. Since you can’t rely on popping into the office to see who is working on a project and who is beating their Snake score, knowing how your employees quantify productivity is the next-best thing. This may lead to a conversation about what you want to see in return, which is always helpful for your employees to know.

Another thing to discuss with your employees regards communication. Determining which avenues of communication are appropriate, which ones should be reserved for emergencies, and which ones are completely off the table is key. For example, you might find that most employees are comfortable texting each other while you prefer Slack or email updates. Setting that boundary ahead of time and making it “office” policy will help prevent strain down the road.

Finally, checking in with your employees about their expectations is also important. If you can discuss the sticky issue of who deals with what, whose job responsibilities overlap, and what each person is predominantly responsible for, you’ll negate a lot of stress later. Knowing exactly which of your employees specialize in specific areas is good for you, and it’s good for the team as a whole.

With these 3 discussions out of the way, you can turn your focus to more nebulous concepts, the first of which pertains to hiring. Loop your employees in and ask them how they would hire new talent during this time; what aspects would they look for, and how would they discern between candidates without being able to meet in-person? It may seem like a trivial conversation, but having it will serve to unify further your team—so it’s worth your time.

The last crucial conversation, per Forbes, is simple: Ask your employees what they would prioritize if they became CEOs tomorrow. There’s a lot of latitude for goofy responses here, but you’ll hear some really valuable—and potentially gut-wrenching—feedback you wouldn’t usually receive. It never hurts to know what your staff prioritize as idealists.

Unifying your staff can be difficult, but if you start with these conversations, you’ll be well on your way to a strong team during these trying times.

This story was first published in November 2020.

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