California Judge Rules Against Uber, Lyft on Gig Worker Law

A California judge set aside a statewide proposition exempting drivers working for companies such as Uber, Lyft and DoorDash from the state’s “gig workers” law, which requires employers to provide all employees with benefits, including health care and vacations. 

Lyft driver masked
A California judge ruled against the new Prop 22 law approved by voters last fall.

The ruling, in a case filed earlier this year by the Service Employees International Union, is a setback for Uber and Lyft, which have built their business model around part-time drivers and spent millions on the campaign that led to the passage of Proposition 22 in last November’s election

Uber said it plans to appeal the judge’s decision and is confident it will ultimately prevail. However, judges in California have succeeded in killing off other proposals approved by voters in the past. For example, a judge overturned a ban on gay marriage approved the California voters. 

Ruling hurts bid in other states 

Dara Khosrowshahi at Elevate event

Uber’s chief, Dara Khosrowshahi, and other execs said the company’s would go bankrupt if they had to make drivers company employees.

The ruling also could slow Uber and Lyft’s efforts to have similar laws, allowing them freedom in determining how to compensate drivers, in other states. A law similar to California’s is now pending in Massachusetts.  

“A prohibition on legislation authorizing collective bargaining by app-based drivers does not promote the right to work as an independent contractor, nor does it protect work flexibility, nor does it provide minimum workplace safety and pay standards for those workers,” Alameda Superior Court Judge Frank Roesch wrote in his ruling. 

“It appears only to protect the economic interest of the network companies in having a divided, ununionized workforce, which is not a stated goal of the legislation.” 

The coalition representing Uber and other companies using gig labor said in a statement Friday that it planned to appeal. 

Lyft driver

Lyft teamed up with Uber, DoorDash another to fight for Proposition 22 in California.

“We will file an immediate appeal and are confident the Appellate Court will uphold Prop 22,” said Geoff Vetter, spokesperson for the Protect App-Based Drivers & Services Coalition, in a statement. “Importantly, this Superior Court ruling is not binding and will be immediately stayed upon our appeal. All of the provisions of Prop 22 will remain in effect until the appeal process is complete.” 

Unions hail ruling 

From the other side of the fight, Bob Schoonover, president of SEIU California State Council, said in a statement, “Today’s ruling by Judge Roesch striking down Proposition 22 couldn’t be clearer: The gig industry-funded ballot initiative was unconstitutional and is therefore unenforceable. Companies like Uber and Lyft spent $225 million in an effort to take away rights from workers in a way that violates California’s Constitution. 

“They tried to boost their profits by undermining democracy and the state constitution. For two years, drivers have been saying that democracy cannot be bought. And today’s decision shows they were right,” he added.

California’s courts have sided with the drivers in the rulings leading up to the passage of Prop 22 last fall by the state’s voters. The parties on both sides have been at odds since California passed a law known as Assembly Bill 5 in September 2019. In fact, the companies wanting to keep workers as contractors, thus ineligible for benefits, lost a court case less than two weeks before the current law was passed by voters.

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GM’s Troubles with Bolt EV Grow as it Recalls 73K More Vehicles

General Motors’ problems with the Chevrolet Bolt EV keep expanding, the company announcing late Friday it’s including an additional 73,000 vehicles in the recall. 

2019 Chevrolet Bolt EV
GM added another 73,000 Chevy Bolt EVs to the recall list with the older models.

The new models include the 2019 cars not included in the first action as well as all of the 2020-2022 EVs. A defect in the battery can cause the vehicles to catch fire. The company already recalled more than 69,000 2017-2019 models for the problem — at a cost of about $800 million to replace the batteries.

Now, the additional 70K-plus electric vehicles basically account for all of the Bolts produced. The company said add $1 billion to the earlier total, bringing the overall cost to fix the problem to just about $1.8 billion.

“In rare circumstances, the batteries supplied to GM for these vehicles may have two manufacturing defects — a torn anode tab and folded separator — present in the same battery cell, which increases the risk of fire,” the company said in a statement released Friday. 

“Out of an abundance of caution, GM will replace defective battery modules in Chevrolet Bolt EVs and EUVs with new modules, with an expected additional cost of approximately $1 billion.”

2022 Chevrolet Bolt EV

The 2022 Chevrolet Bolt is now part of the ongoing recall of the company’s electric vehicles.

Trying to resolve the problem

The company attempted to resolve the issue with the initial recall, believing a software tweak could settle it. However, two more vehicles caught fire — one after getting the update — forcing GM to issue a recall again to replace the batteries in the initial pool of affected vehicles.

As owners waited, it asked them to park their vehicles away from outside of their garages or other buildings after charging. It also recommended the vehicles not be charged past 90% capacity — all to no avail.

Apparently, after further investigation, the company discovered the issue affected newer models outside of the original pool of 2017-2019 model-year vehicles

GM confirmed to CNBC there has been one fire in the new population of recalled vehicles. Including the previous confirmed fires from in the first round of recalled vehicles, a total of 10 of the EVs have caught fire.

charred Chevy Bolt in garage

One of the two recent Bolt fires included a vehicle that completed the software update.

The company continues to ask affected Bolt EV owners to set their vehicles to a 90% state of charge limitation using Hilltop Reserve mode (for 2017-2018 model years) or Target Charge Level (for 2019 model year) mode.

Earlier plan fails to solve the problem

GM said earlier the high-voltage batteries being recalled were produced in South Korean battery manufacturer LG Chem’s facility in Ochang, South Korea. 

The company disclosed July 23, along with LG Chem, it identified the presence of two manufacturing defects in the same battery cell as the root cause of battery fires in certain Bolt EVs. GM described the defects as “rare” by GM. 

LG Energy Solutions, a wholly owned LG Chem battery subsidiary, said in a statement to Reuters it “will actively cooperate to ensure that the recall measures are carried out smoothly.” 

Last month, GM disclosed it was taking an $800 million charge to cover the cost of the recall of the battery electric vehicles.


SEC Investigating VW Due to the “Voltswagen” Stunt

Voltswagen

The “Voltswagen” April Fool’s Day prank has led to an investigation by the SEC.

What started out as a “humorous” advertising and marketing ploy could land German automaker Volkswagen in serious trouble with the federal government.

The Securities and Exchange Commission (SEC) is apparently looking into VW’s “Voltswagen” marketing stunt to determine if it hurt company stock prices and may have broken any U.S. securities laws, according to German news outlet Der Spiegel.

The incident in question dates back to March 29. As a sort of early April Fool’s Day prank (and marketing ploy), VW “accidentally” released a rough draft of a press release declaring the company was going to change its name to “Voltswagen” as part of a larger effort to promote its ever-growing line-up of electric vehicles (EVs).

This action was picked up by the worldwide automotive press and on March 30 VW issued an official press release to several news outlets, including the Associated Press, confirming the leaked statement from the day before.

This action resulted in VW’s stock price going up. At one point it was 12.5% above its price before the whole incident.

SEC looking at jump in stock price

VW of America President Scott Keogh took responsibility for the poorly received April Fools’ prank that wasn’t on April 1.

This is what caught the attention of the SEC, taking what many considered a fairly unfunny publicity ruse to a possible federal offense.

After the April Fool’s stunt failed in the eyes of the media and the public, VW issued a press statement saying the releases were actually part of a larger tradition in which companies often issue prank statements.

This one just meant to also focus the world’s attention on VW’s growing EV portfolio.

But public statements that affect stock prices usually don’t get an “April Fools” immunity. An SEC investigation could result in charges against the company.

Several news organizations, including The New York Times and Reuters, have asked for a comment from VW. So far, the company has declined to issue one.

Just one of many VW legal scandals

This is not the first time VW has gotten into trouble for the way it conducts its business.

Oh those wacky Germans!! As quickly as it got here, VW took it away: Voltswagen is the company that never was.

In October 2015, as Volkswagen struggled to deal with its diesel emissions scandal, new data raised questions about whether the automaker properly reported death and injury claims to U.S. regulators during the past decade.

A study by the financial advisory firm Stout Risius Ross Inc., found that Volkswagen of America reported nine times fewer deaths and injuries than the average of the 11 largest automakers operating in the U.S. market. Significantly, VW reported less than half as many incidents as either Fiat Chrysler or Honda, both of which have been fined for underreporting their own death and injury data.

Back in September 2015, the EPA accused the German maker of using a so-called “defeat devices,” software designed to fool government emissions tests, on a variety of luxury models from the Audi and Porsche brands. The feds charged VW took steps to cover up excess emissions on 482,000 vehicles sold in the U.S. during a 7-year period.

The end result was VW paying billions of dollars in fines to various governments around the world. The company also faced numerous consumer lawsuits that further cost the company money.


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} div#JkaXGWBzgI .mo-mailchimp-interest-container { padding:18px 0 6px 0; } div#JkaXGWBzgI .mo-mailchimp-choice-label { font-size:16px!important; }

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