Thursday, October 22, 2015

Open Letter to the Natural Resource Defense Council

Are you aware that the San Francisco branch of the Natural Resource Defense Council (NRDC) is backing a plan by the venture capitalized corporations Uber and Lyft to put thousands of their private vehicles on that citys streets without an environmental impact study, regulatory oversight or emission controls?

         The new services called, Uber Pool and Lyft Line, designate the same vehicle  (owned by a private individual) to pick up at multiple locations in the same area and take the passengers to different places where the vehicles drop them off.

Uber and Lyft market this strategy by claiming,
  • Shared ride platforms reduce the number of private vehicles on the road …” decreasing emissions of greenhouse gases and criteria pollutants, particularly in urban areas.
This is a textbook example of Orwellian doublethink. They may or may not be motivating private citizens to take their cars off the road but they are certainly putting huge clusters of their own privately owned vehicles on the streets to do the job.

But it sounds good, yes? In fact, it sounded so good to Amanda Eaken, Deputy Director of the NRDCs Urban Solutions Program, that she wrote in her comments to the California Public Utilities Commission that despite the fact that,
  • “… these services are novel <and> have not yet been the subject of independent research to verify their broader social and environmental impacts, <and> While important research questions remain to be answered, this is not the time to make changes that would prevent ridesplitting (her word for Uber Pool & Lyft Line) from further evolving, particularly in light of Californias ambitious climate goals.
         Would Ms. Eaken and the NRDC take the same attitude if Exxon said that it was evolving a new, environmentally friendly method of fracking? Would the NRDC wait to see what the effects would be before calling for an inquiry? I think not.

Thursday, October 1, 2015

Attorney Liss-Riordan Clarifies O'Conner vs Uber

Labor lawyer Shannon Liss-Riordan, who is suing Uber on behalf of Uber drivers that want to be classified as employees, cleared up some confusion regarding the suit during a recent phone interview.

Some clarification was necessary. The case is complicated.

Uber Arbitration Clause

Liss-Riordan filed the case in 2013. On June 2, 2014 Uber changed the driver contract to add an arbitration clause that the drivers had to sign if they were to work for the company. This created two different statuses for drivers:

  1. Drivers who drove from 2009 to June 2014 could be included as the part of the class in a class action suit.
  2. Drivers who started or drove for Uber on (or after) June 2, 2014 could not.
However, the later drivers can still become part of the action by signing up. Liss-Riordan said that Uber wanted to try each case individually so she's going to do her best to keep them busy. She said that she's already had hundreds of drivers call her who wanted to be part of the suit and anticipates that she can easily sign up 2,000.

If you have driven for Uber any time since June 2014 and want to be part of the law suit you can find information on how to sign up at

The Class Action Suit

A court date hasn't been set yet but this is the suit that will decide whether or not Uber drivers will classified as employees.

Uber had argued that there was no such thing as a typical Uber driver so that there was no such thing as a class of drivers. The Uber attorney especially wanted full and part time drivers to be treated differently.

However, U.S. District Court Judge Edward M. Chen "wasn't buying" the argument according Liss-Riordan. He ruled that there really wasn't any difference between full and part time drivers. If the drivers win the suit, they'll all be classified as employees.

Liss-Riordan is optimistic because she thinks that Judge Chen holds much the same view of the law that she does, and the California Labor Commission has already ruled that Uber drivers are employees.

While she expects Uber to delay the proceeding as long as possible, she thinks that she and the drivers will prevail in the end. 

Monday, September 28, 2015


Flywheel taxi filed a lawsuit in Federal Court last week against the California Public Utilities Commission (CPUC) for unfair business practices.

The main complaint is the "uneven manner" in which the CPUC is regulating "e-hail taxi companies (i.e. Uber, Lyft & Sidecar). "The CPUC," the complaint asserts, "in-behind-the-door negotiations allowed these services to obtain a state license that they have since used to circumvent all established municipal taxi rules"

"Flywheel Taxi’s suit seeks injunctive and declaratory relief against the CPUC for the CPUC’s assertion of jurisdiction over e-hail taxi companies, which has prevented municipal agencies from applying the same rules to e-hail taxi companies that are applied to traditional taxi companies, resulting in an unfair two-tier system of regulation that has created an unlevel playing field for on-demand transportation companies."

Hansu Kim (photo), President of Flywheel Taxi, said,

“Calling these new taxi services ‘ride-sharing’ is the height of irony. It’s a type of Orwellian doublespeak intended to make people feel good about them. I mean, who is against sharing? But there isn’t any sharing going on. These are venture capital backed commercial businesses trying to skirt regulatory requirements. This lawsuit is intended to make sure everyone gets to compete while playing by the same rules.”

In a telephone interview, Kim clarified this by saying, 

"Taxicabs are being treated unfairly in terms of rules that we have to follow compared to the e-hail taxi companies ... regulators either have to treat us equally under the law – where we all are regulated similarly – or, if they want to deregulate the industry, then they have to deregulate all of us." 

Flywheel is not suing for money but rather a change in laws.

"All we're asking for," Kim says, "is to be able to compete on an even playing field. ... If we have that I know we can succeed. ... I'm not afraid of technology or new services or competition – I'm all for it. This is about making sure that they have the same costs and provide the same insurance and standards of safety that we do. Even a company like ours that is incredibly innovative and progressive is not going to thrive in an environment where the competition is allowed to endanger the public with cut rate insurance, 3rd rate background checks, phantom vehicle maintenance and zero driver training."

Regulate all or regulate none," Kim concluded, "but don't regulate some."

For a list of regulatory differences between e-hail taxis and real taxicabs, and a copy of the suit – click below.

Sunday, August 16, 2015

Employee or dependent Contractor? The O'Conner vs Uber Hearing

The United States District Court of Northern California with Judge Edward M. Chen presiding  heard arguments Thursday, August 6, 2015, on O'Conner vs Uber.

There were two main issues involved: One – whether or not the plaintiffs were employees instead of independent contractors; Two – whether or not the plaintiffs represented Uber drivers as a class.

Although distinctions were drawn between the issues, they frequently overlapped, and both the attorneys and Judge Chen often addressed both questions simultaneously.

Uber was represented by attorney Theodore Boutrous who also represents Wall-Mart in a class action suit and is considered one to the top hired guns in the business.

The plaintiffs were represented by Harvard educated labor lawyer Shannon Liss-Riordan who specializes in defending the rights of low wage workers. Among her victories was a $14 million judgement against Starbucks for allowing supervisors to "share" worker's tips.

There is a great deal of case law concerning the differences between employees and independent contractors and both of the attorneys were well schooled in the subject. Most of their arguments were backed with quotes from legal precedents which sometimes made it difficult for laypersons like myself to follow.

However, the clarity with which the attorneys and Judge Chen expressed their ideas was a welcome change from the willful ignorance and partisanship that we've been witnessing at hearings of the California Public Utilities Commission (CPUC) and the State Legislature.

Judge Chen, in contrast, displayed no prejudices one way or the other, and had an expert's knowledge of the issues – as well he should since one of his own rulings was referenced by both attorneys as a precedent.

 The Dispute Includes the Following Arguments

One: Uber Drivers Want to be Independent Contractors.

Boutrous began with the kind of contrived, emotional argument that plays well at the CPUC. He he had a list of 400 Uber drivers who claimed that they wanted to be independent contractors, and chastised Liss–Riordan for not doing her job in responding to his list.

Liss-Riordan countered by saying that she had been contacted by 1,700 drivers who wanted to be part of the suit but she didn't think it was necessary to add them. She also said that 50 of the people on Boutrous' list had told her that they had misunderstood what the suit meant but they didn't want to take their names off the list for fear of reprisal.

In any case, Judge Chen wasn't impressed by Boutrous' ploy. The judge pointed out that the 400 people made up about two-tenths of one percent (1 in 400) of the 160,000 people who drive for Uber and added that "happy campers" often show up to defend companies in suits of this kind.

Boutrous then gave Chen of a dose Uber arrogance by criticizing the judge for "demeaning" the hard working 400 – never mind the other 159,600 not so happy campers that Boutrous wants to pretend don't exist.

Two: Whether or Not Uber Has the Power to Terminate Drivers Without Cause.

Boutrous argued that Uber had written 17 different versions of the contract since 2009 and the wording differed so much among the versions that no one contract could represent them all. Instead, he said that several individual trials would be necessary to determine the facts on a case by case basis.

Judge Chen said that he thought the differences between the contracts were really minor because Uber retained the power to terminate drivers at any time no matter what the specific wording of each contract actually was.

As a corollary, drivers could also quit Uber without consequence which would not be true in an independent contract between, say, a painter and the owner of a house. If either side would renege on such an agreement, the other party would usually be owed compensation.

Not mentioned (I believe) was the fact that there was no consequence to Uber for breaking the contract. The drivers couldn't collect unemployment, or sue if Uber failed to send them rides.

Three: Whether or Not Uber Controls Its Drivers in Other Ways.

Citing a precedent, Boutrous said that the right to terminate workers could not be the sole determining factor of whether or not a person was an independent contractor.

He then went on to say that Uber drivers are not scheduled, aren't told what to do or where to go, and can work whenever they want.

Liss-Riordan countered by saying that there were fourteen different points of control that determine whether a worker is an employee or not and that Uber exerted control in twelve of them including: using background checks for hiring, setting the percentage of payments that the drivers would receive, making the payments to drivers accounts, and using a 5 point rating system to fire drivers who didn't score high enough.

Judge Chen was also interested in the 5 point rating system. He had done research on it that showed that Uber's district managers determine the exact percentage that drivers need to maintain in order to keep their jobs. But, some version of the 5 point system is applied by the company throughout the country.

In San Francisco, for instance, drivers used to have to maintain a  4.7 rating but so many drivers had either been fired or quit that Uber recently lowered the standard to 4.4.

Also not mentioned was the fact that Uber will also fire drivers who do not take a high enough percentage of the rides sent to them.

Boutrous Scores.

Who Boutrous most reminds me of (with his hair-splitting and creation of pseudo issues) is Viola Davis in How To Get Away With Murder. Like Davis (a lawyer who apparently only defends murders), Boutrous has a culpable client (in this case a venture capitalized corporation guilty of using fake independent contractor status to control and exploit its workers far more than any employer could) so he needs to fabricate a defense. In order to do this, Boutrous uses the time honored technique of throwing stuff up against a wall to see what sticks.

What finally adhered was an argument that struck me as a little strange.

The Argument of the Thirty-Nine Business Owners

Boutrous said that 39 Uber drivers also ran their own businesses and added that they would quit if they were forced to become employees. As an example, Boutrous cited a man who was an Uber driver but also ran a limo business with twenty-six employees.

For some reason this impressed Judge Chen who said that these people clearly didn't fit the definition of employees.

I have to admit that I didn't follow his reasoning. What is the difference between the 39 Uber workers and people who are employed part time as: bookkeepers, bartenders, waiters, clerks, delivery people or telephone salespersons?

And, if these business owners want to quit so what? Using Judge Chen's arithmetic this equals two-100ths of one percent or (1 in 4,000) out of 160,000 Uber workers.

It's difficult, if not impossible, to see how this would damage Uber's profitability (which seems to be of paramount importance to all branches of government). And, since this a part time job for people who own businesses, it's also hard to understand how it would damage them very much – especially since they apparently can afford to quit if they don't like how they are classified?

Class Action vs Jury Trials.

One of the main issues was whether or not Judge Chen should rule on the whether not these trials should be a class action.

Boutrous badly wanted separate jury trials instead of having Chen make a ruling. The venture capitalized corporation's attorney said that a series of jury trials would help form a body of work  upon which a future precedent could be more firmly set.

Liss-Riordan, on the other hand, wanted Judge Chen himself to make a class action ruling before the individual trials took place. She said that under current circumstances (with the independent contract in force for Uber) drivers in favor of employee status would be afraid to testify.

Judge Chen said that he would make a ruling on the issues sometime in the future and in the meantime the attorneys should prepare themselves for the trials.


1. Boutrous gave a demonstration of why he really wants jury trials immediatley after the hearing when he trotted out a line of Uber drivers who, for the benefit of the press, all said they wanted to be independent contractors . The Uber Attorney clearly thinks that juries won't be as sharp as Judge Chen and thus won't realize how few drivers Boutrous' parade really represents.

Liss-Riordan might need to come with a parade of her own to fight this ploy, possibly from drivers who have already been fired by Uber

2. Uber's ability to control the narrative

A. Boutrous did succeed in turning the issue into a discussion of part time instead of full workers.

Supposedly (any figures from Uber have to be taken with a bucket of salt), 50% of Uber drivers work 10 hours or less and 50% work 30 hours or more. Nobody mentioned the thousands of drivers who have bought cars with Uber's usurious financing (23% interest last I heard) and are working 60 hours a week to make it worthwhile.

Whatever the exact figures it's clear that most of Uber's earning come from full time, not part time, drivers. It's simple arithmetic. Using Uber's own dubious figures: if half the drivers are full time and half are part time, three-fourths of Uber's money would come from the full time workers.

(50 drivers at 30 hours per week = 1500 hpw and 50 drivers at 10 hpw = 500; 1500+500 = 2000;1500 divided by 2000 = 75%)

B. The issue has thus been turned upside down. The real focus should be on the rights of full time workers who need to support themselves and raise families, not so much on people earning a little on the side.

3. There was a subtext to this hearing (as there was to hearings at the CPUC and the State Legislature) that the government and the courts (for some unstated reason) have a duty to, not only keep Uber in business, but to guarantee their profitability. This is kind of a libertarian/techie version of the old saying, "what's good for General Motors is good for the world."

Indeed, Uber has constantly argued that they would lose their ability to compete or (horror of horrors) innovate if they were forced to: fully insure their drivers and customers, fingerprint their driver applicants, pay outside mechanics to inspect their vehicles, train their drivers, etc – in short, all the things that legitimate transportation business do as a matter of course.

In this case,  Uber claims that correctly classifying their drivers as employees would  force Uber to pay unemployment taxes, workers compensation and so forth which would undermine their ability to compete.

Complete with whom?


And, how are they competing now?

In San Francisco, Uber is currently charging 40% less than taxis, except of course for "surge pricing"(i.e. price gouging) hours.

Uber's is able to "compete" in this manner because they aren't paying for fingerprinting or mechanically inspecting their vehicles or any of the other things mentioned above. They are also able to "compete" in this manner because of the money they save by falsely labelling their employees as independent contractors.

Uber has been asking the lawmakers, and now the courts, to weaken regulations, not so that Uber can "complete"  with the taxis, but so that they can continue to undercut, destroy and finally replace the taxicab industry.

Indeed, the destruction of the taxi business is precisely what Uber's 50 billion dollar evaluation is really based upon. With taxicabs out of the way Uber can charge anything it wants while paying its drivers way less than they are now.

The question for the courts, then, is whether or not they should continue to weaken regulations that protect public safety and help workers earn a living wage in order to boost the profits of Uber's venture capitalists?

Friday, August 14, 2015

SF Credit Union Continues to Make Taxi Medallion Loans

I've personally never met a group of people more prone to gossip than cab drivers. Furthermore, few of their rumors turn out to be true. So, when some taxi drivers at the California Public Utilities Commission (CPUC) hearing yesterday claimed that the San Francisco Federal Credit Union (SFFCU) was no longer loaning money to drivers to purchase medallions, I was doubtful.

Carl McMacmurdo, the President of the Medallion Holders Association, who was also at the CPUC meeting, shared my skepticism. We decided to walk a couple of blocks over to the credit union and talk about the subject to Senior Vice President & Chief Lending Officer Rebecca Lytle.

Miss Lytle was on vacation but her Executive Assistant of Lending, Hanh K Ha was gracious enough to speak with us.

She wishes to issue this statement.

San Francisco Federal Credit Union is making taxi medallion loans. Since the program started 5 years ago, we have never stopped taking applications or making loans to drivers who want to purchase a taxi medallion. “

Uber Continues Its Contempt for the Law and Lawmakers with UberPool & Xchange Leasing

Uber has announced two new programs that are actually already in effect (meaning they are going on now) despite that fact that they are both illegal: Uberpool and Xchange Leasing. Using leased cars for TNCs is currently illegal under the law and the Uberpool measure is in committee in Sacramento and has yet to be voted upon.

These were two major subjects about which cab drivers spoke at the CPUC hearings yesterday. The drivers would like  enforcement of the laws that are on the books.

These speeches were treated by the commissioners with the usual vacant stares.

It should be needless to mention that people riding in vehicles engaged in illegal activities would probably be uninsured in case of an accident but, such facts have never impressed a commissioner before, why would it do so now?

Oh – yes! Uber claims that this is a sample of their "providing transportation so inexpensive and reliable, people can actually sell their cars." 

Now, if they can get the 160,000 people currently driving for Uber (not to mention the new leased vehicles) off the streets Uber might really do something to improve the environment.

As it is, this is a classic case of Uber pissing on the back of the public and calling it rain.

Friday, July 3, 2015

Uber & Lyft's Attacks on Fingerprinted Background Checks: Part One

Uber made the SF Examiner last week for being against fingerprinted criminal background checks. As usual the venture capitalized corporation (VCC) is being given too much credit. Its VCC rival, Lyft, is also against fingerprinting – maybe even more so than Uber.

In any case, the arguments that Uber & Lyft made against fingerprinting before the California Public Utilities Commission (CPUC) hearings for regulating TNCs are almost identical.

I had intended to take part in the latest hearing but I wasn't able to do get my comments together in time. Instead I'll make my arguments here.

Since my favorite TNC attorney is Lyft's General Council Kristin Svercheck (Photo 2012 ), I'll mostly be using her reply comments from the CPUC proceeding (1) for my own comments.

Why Fingerprinting?

Fingerprinted background checks are considered to be the best practice by law enforcement agencies throughout the world including: the FBI, the NSA, the CIA, the US Department of Homeland Security and INTERPOL.

Why? From One Standard for All, “A fingerprint-based check is the only way to verify a person's identity and ensure that criminal records found (if any) are for the right person."

Why? From The History of Fingerprints"Fingerprints offer a reliable means of personal identification. That is the essential explanation for fingerprints having replaced other methods of establishing the identities of criminals reluctant to admit previous arrests."

Why? From an INTEERPOL forensic symposium,  "Since a person’s fingerprints are unique and do not change during the course of their life, they can be used to quickly and efficiently confirm or disprove a person’s identity ..."

The main exceptions to this are few rare diseases that affect only a few extended families word wide. The odds are over 3 million to one against a person having these diseases. 

The simple truth is that the best, quick way to know that a person is who they claim to be is fingerprinting.

Lyft's Arguments Against Fingerprinting

According to Councilor Svercheck

"Fingerprinting is not necessary to ensure public safety."

Just to clarify: What she is saying is that the technique that is considered the best way to identify people with criminal pasts – especially people convicted of sexual, violent or dangerous driving crimes –  by the FBI, INTERPOL et al is a waste of time.

If one is going to undermine or disprove a method that has been shown to be effective millions of times by the world's leading experts in identification, one would think that one would have to come up with very strong evidence. You know –  statistics, body count comparisons, etc. 

So what does Lyft give us?

"There is no evidence that ... current TNC background check requirements are not adequate and effective."

A double negative? This is the kind of argument used by attorneys on Law and Order when they are defending the Mafia.

Once again, it should be up to Svercheck to prove that TNC background checks are as effective a deterrent to crime as fingerprinting – not the other way around.

On the other hand, I never suspected the General Council of having sense of humor. I stand corrected for, when it comes to proving that Uber and Lyft's methods don't ensure public safety, the evidence is seemingly endless. It's hard even to know where to start?

Or, the City of Houston's investigation into Uber & Lyft's back ground checks by the FBI which found "several drivers with prior criminal histories including indecent exposure, DWI, prostitution, fraud, battery, assault, robbery and aggravated robbery?"

The investigation was started after an Uber driver who raped an intoxicated passenger was found to have spend 14 years in federal prison. "Houston said that the driver would never have passed its fingerprint-based background check conducted by the FBI."

Or, the Uber driver who exposed himself to a female passenger and was found to have numerous past crimes and traffic violations?

Unfortunately, I could go on and on.

Instead of fingerprinting, Lyft uses "privately administered background checks based on Social Security numbers."

Svercheck spends a lot of time explaining a complicated process but I don't feel the need to waste much ink listing her arguments. Instead,  here's a quick listing of the weakness of name and social security based checks from Mentor – a national mentoring partnership.
  • A person can provide a false name and social security number. Over 1% of the 45 million individuals in the FBI criminal database have used over 100 aliases and false Social Security numbers.
  • People can have two or more different last names if they have been married more than once. You can miss a criminal record if you only have one name.
  • Criminal databases can have mistakes in the spelling of person's name or other relevant information.
  • You can have "false positives" where a person appears to have a criminal record because of a crime committed by another individual.
Mentor goes on to say that "A fingerprint-based check is the only way to verify a person's identity..."

In addition, of course, we all know that that social security numbers are constantly being hacked and stolen in various ways. What I didn't know until today was that there are websites to help people create fake social security numbers and identities.

Finally, we have an Uber driver explaining how to get around background checks in ValleyWag,

“[Uber's] background check is done through a third party called Hirease. It consists of filling out your name, address, DL & SSN online. That's it. Every taxi company I worked for required drug screening and livescan fingerprinting at the local police department before being issued a taxi driver permit. … One person could fill out all the info and hand off the approved account to another person. You can't do that in the taxi world ….

I wonder if it would be possible for a person to file off his or her fingerprints and get job at Lyft? Judging by my own experience of applying to drive for Lyft I think so. One could wear gloves during the 3 minute personal interview. Si, no problema.

This is turning into a bigger project than I anticipated. Council Svercheck apparently thinks than an accumulation of bad arguments will somehow equal one good one. We shall see.

Next: Lyft Plays the Race Card 


June 8, 2015