Uber promises flying cars, Postmates closes its funding round, and Airbnb negotiates with New York City

XXXIII

Faintly ridiculous.

Another legal setback for Uber last week, this time out of Britain. The London Employment Tribunal, a British employment court, said Friday that two Uber drivers (one current, one former) were illegally denied holiday pay, a guaranteed minimum wage, and the right to take breaks. These two drivers, the court said, had been incorrectly classified by Uber as independent contractors when they were really “workers,” a third employment category in the UK that is somewhere between a contractor and a full employee. The court’s reasoning is here and the judge clearly unimpressed by Uber and its regional general manager Jo Bertram. For example:

Reflecting on the Respondents’ general case, and on the grimly loyal evidence of Ms Bertram in particular, we cannot help being reminded of Queen Gertrude’s most celebrated line: The lady doth protest too much, methinks.

And later:

The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous.

It also quotes Milton, and the English major in me kind of loves seeing a court deploy literature against a $68 billion startup.

The British union that brought the case is calling the ruling a “monumental victory” with implications for Europe’s broader gig economy. Uber is, of course, appealing, and trying to downplay it. Uber has likened the decision to one reached by an employment regulator in New York a few weeks earlier, which found two of its drivers eligible for unemployment payments. In both cases, Uber said, the rulings were narrow because they applied only to the named drivers and did not explicitly find them to be employees. Uber has reportedly mass-emailed its UK drivers to remind them that “there will be no change to your partnership with Uber in light of this decision, and we will continue to support the overwhelming majority of drivers who tell us that they use the Uber app to be their own boss and choose when and where to drive.”

Elsewhere: Juno founder Talmon Marco says Uber “is truly evil.”

Home-sharing. 

Credit where credit is due, Airbnb simply doesn’t give up. Less than two weeks have gone by since New York made it illegal to advertise your entire apartment for less than 30 days, a rule that could crush Airbnb’s home-sharing business in its biggest US market. In that time, the company has:

  • Sued New York City and the state attorney general

  • Held a ”sad” protest outside governor Andrew Cuomo’s Manhattan office

  • Pushed out an update to its terms of service warning that hosts “SHOULD UNDERSTAND HOW THE LAWS WORK IN THEIR RESPECTIVE CITY … CERTAIN TYPES OF SHORT-TERM RENTAL BOOKINGS MAY BE PROHIBITED ALTOGETHER.”

Airbnb and New York state are now reportedly in talks to resolve the lawsuit. A hearing scheduled for yesterday was adjourned, with the judge requesting an update by the end of the week. The Wall Street Journal says a potential settlement could insulate Airbnb from fines for short-term rental violations, though hosts might still be liable. That is a little confusing because the law as written only fines hosts for illegal rentals, but I guess you can’t blame Airbnb for wanting it spelled out. In the meantime, here is a very good piece from Dana Rubinstein at Politico on why Uber succeeded in New York where Airbnb failed. And from Sam Lessin at The Information: Where Airbnb May Be More Vulnerable Than Uber.

I dream of zero.

Congratulations to Postmates, which secured $141 million in a “super, super difficult” fundraising effort. The round was led by Founders Fund, Peter Thiel’s firm and an existing Postmates investor, which kindly “agreed to step up its support and add partner Brian Singerman to the board of directors.” Postmates sold its shares at the same price as its previous funding in June 2015, when it raised $80 million at a $500 million valuation, and with the additional cash says its valuation is now about $600 million. “Nobody ever promised me a billion-dollar valuation, so I feel good,” says CEO Bastian Lehmann, who must surely be relieved to have some fresh capital on hand. I would also love to know what else he stuffed into the deal to get it to close. Last month we reported that Postmates was struggling to raise money and had proposed “significant” deal sweeteners to entice investors. Postmates denied this to Bloomberg and, well, OK, I’ll believe that when I see the term sheets. Postmates now says its dream is “a world with zero delivery fees,” and while that perhaps doesn’t sound the most profitable, who am I to judge? In the land of aspirational unit economics, anything is possible.

Flying cars.

“Fast-Forwarding to a Future of On-Demand Urban Air Transportation” is the title of this white paper from Uber, and it’s interesting to think about who the intended audience might be. The summary is both very bold (“Just as skyscrapers allowed cities to use limited land more efficiently, urban air transportation will use three-dimensional airspace to alleviate transportation congestion on the ground”) and very dense (“Large efficiency improvements are possible because DEP enables fixed-wing VTOL aircraft that avoid the fundamental limitations of helicopter edgewise rotor flight”). VTOL stands for Vertical Take-off and Landing, which in turn describes a “small, electric aircraft that takes off and lands vertically.” Look, a picture!

Uber says these VTOLs will be on the market in five years, though some aviation experts are more skeptical. “Humungous stretch,” is the exact quote here. With this new form of transportation, Uber says, travelers will be liberated from the traffic jams that plague trains, buses, and cars, because VTOLs “can travel toward their destination independently of any specific path, making route-based congestion less prevalent.” Sounds excellent. I too look forward to a time when flying cars freed from fixed routes can amble through the skies, crashing indiscriminately into buildings, birds, planes, and each other.

Other stuff.

Surge pricing for food delivery is a bad idea. Airbnb diversity report. Uber self-driving Volvo SUVs spotted in Pittsburgh. Uber self-driving Ford Fusion crashes in Pittsburgh. Alphabet graduates self-driving cars. Self-Driving Car Startup Cancels First Product Because Dealing With Regulators and Lawyers “Isn’t Worth It.”Amazon settles with New York delivery contractors. Uber Found an Unlikely Friend in Organized Labor. The people versus Uber. Obamacare for the gig economy. Liquidity woes at Palantir. Discrimination on Uber. Take a tour of Uber’s New York office. Karlie Kloss’s $10 million AirbnbRoad map for Lyft. Rolfe Winkler interrogates Lyft. Jim Beam pays for Uber. Fasten takes on Uber. We Built a Fake Web Toaster and It Was Hacked in an Hour.