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Uber shuts down in Austin; hits major speed bumps in New York and California

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  • HARI SREENIVASAN:

    Now we turn to Uber. The ride-sharing giant’s rise has spurred a number of fights across the country.

    The latest move, an agreement to create a drivers association representing about 35,000 drivers in New York City. That follows a recent settlement with drivers in California and Massachusetts, and a decision to suspend service in Austin, Texas.

    Mike Isaac covers this landscape for The New York Times, joins us now from San Francisco.

    How significant was this agreement that Uber made in New York?

  • MIKE ISAAC, The New York Times:

    So, it’s probably the largest to date that Uber has had in a sort of positive agreement with any sort of recognized labor unions.

    It’s the first time that Uber is actually recognizing a group of drivers. They’re not calling it a union because they lack some really fundamental issues that — issues and abilities that unions have, which includes the ability to collectively bargain with Uber on pay.

    But, as far as overall significance, it’s the first time Uber is actually willing on agree to talk to one of these groups.

  • HARI SREENIVASAN:

    So, is this a step to try to prevent unionization or to have to call drivers employees?

  • MIKE ISAAC:

    You know, it’s — Uber has never really had good lines of communication with any of the drivers that work for them.

    One of the biggest complaints has always been, you know, for drivers, that they can’t get in touch with Uber. If they have been deactivated driving for Uber, they don’t know why often. It’s sort of this first olive branch from the company saying, OK, we’re going to start listening to you and essentially give you a voice.

    Now, that also serves another purpose, to, you know, sort of give a quasi-union-style thing to drivers without actually making them employees, which would cost Uber, you know, hundreds of millions of dollars more in overhead.

    So, it’s kind of a — it’s serving more than one purpose at the same time.

  • HARI SREENIVASAN:

    OK.

    Now, what are the fights going on in the other parts of the country we mentioned? Right in your home area, in California, what was the settlement there about?

  • MIKE ISAAC:

    So, in California and in Massachusetts, there was a class-action lawsuit going on where a number of — tens of thousands of workers were essentially suing Uber to — for back wages, for overtime, for expenses, essentially things that you would receive if you were a full-time employee.

    Now, Uber, you know, continues to call their drivers their partner — driver partners and has no real incentive to employ these people. So, that had been going on for a while. But Uber finally settled with the class-action — or agreed to settle the class-action for up to $100 million and some of the concessions that you’re seeing in this new union — union-esque group formed in New York recently.

  • HARI SREENIVASAN:

    I say Uber all the time, but it’s almost a shorthand for Uber, Lyft, other ride-sharing companies. They just pulled out of Austin.

    It seems the strategy sometimes for these companies is to ask forgiveness, rather than permission. What happened in Austin, and why did they have to leave?

  • MIKE ISAAC:

    Well, Austin was an interesting battle for them.

    They essentially were going up against the slate legislature over background checks. And, basically, Uber has this process where they have an outside company performing these background checks for drivers. They’re usually turned around in a few days, and drivers can get on the platform and start driving really quickly.

    Now, the point of contention there was, taxi drivers and cab drivers generally have to go through a fingerprint-based background check, which many people believe is much more comprehensive than the type of background checks that Uber is — Uber and Lyft and other ride-sharing companies are requiring.

    So, Uber spent, I believe it was $9 million fighting that in the state legislature, saying, our background checks very safe. But a law passed that essentially sort of made their argument moot, so Uber decided to call their bluff and pull out and see if the drivers in Austin complained loud enough for them — for the state to cave.

  • HARI SREENIVASAN:

    All right, Mike Isaac of The New York Times joining us from San Francisco, thanks so much.

  • MIKE ISAAC:

    Thanks for having me.

Editor’s note: In the broadcast version of this segment, New York Times reporter Mike Isaac misstated the role of the Texas State Legislature. It is the Austin City Council that mandates fingerprint background checks for Uber drivers, not the state legislature.

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