|Bid||41.19 x 1100|
|Ask||41.20 x 1000|
|Day's Range||40.12 - 41.23|
|52 Week Range||25.58 - 47.08|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Feb 05, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||48.42|
Uber is shutting down its customer support office in downtown Los Angeles, resulting in the layoffs of about 80 people. The closing of the office was first reported by the Los Angeles Times. Sources told the Times that the staffers were not given advance notice that their jobs would be shifted to a larger customer support office in Manila.
The tech-heavy Nasdaq composite and S&P; 500 hit record highs Wednesday on easing coronavirus fears. Tesla stock surged above 900.
Uber Technologies, Inc. (NYSE: UBER) today announced that Mandy Ginsberg, CEO of Match Group, has been appointed to the company’s Board of Directors.
(Bloomberg) -- SoftBank Group Corp. plans to borrow as much as 500 billion yen ($4.5 billion) by putting up shares of its Japanese telecom unit as collateral, raising capital for the investment giant’s operations.The money for the two-year loan, which will have a one-year extension option, will come from 16 financial institutions, SoftBank said in a statement on Wednesday. It pledged as much as 953 million shares of SoftBank Corp. and said the money will be used to fund operations.Activist investor Paul Singer this month revealed his firm had acquired a stake of as much as $3 billion in SoftBank and has advocated for a share buyback of as much as $20 billion, along with governance changes and more transparency about its investments. SoftBank founder Masayoshi Son called Singer’s Elliott Management Corp. an “important partner” and said he is in broad agreement with the investor about SoftBank buybacks and share value.SoftBank will need to raise cash to meet those demands. Son is adopting a more conciliatory stance just as he’s struggling with the $100 billion Vision Fund, which made him the biggest investor in technology. The fund lost money in the three months ended in December, one quarter after the meltdown at WeWork triggered a record loss for the Japanese company. Son is trying to raise capital for a second fund, but last week said he is no longer targeting $108 billion and SoftBank may finance the effort on its own.The past 12 months have been tumultuous for Son and SoftBank. A year ago, the company unveiled a record buyback, sparking a rally that pushed shares to the highest since its dot-com peak in 2000. Uber Technologies Inc.’s disappointing public debut and the implosion of WeWork wiped out the gains over the next few months. But SoftBank surged again this month after Singer disclosed his stake and Son won approval to sell his Sprint Corp. to T-Mobile US Inc.Read more: SoftBank’s Son Considers a ‘Bridge’ Fund Before Vision Fund 2SoftBank has 13.75 trillion yen of interest-bearing debt, with more than 2.6 trillion yen of bonds coming due in the next three years. The company also had 3.8 trillion yen of cash and equivalents as of the end of December.(Updates with details of fundraising from second paragraph. A previous version corrected the amount of shares put up as collateral)To contact the reporter on this story: Pavel Alpeyev in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin Chan, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The affected employees all worked in customer support and were paid on an hourly basis. "We have decided to close the downtown L.A. office and we will be moving the outreach and innovation work to our Manila [Center of Excellence], where we can continue to support the business as it grows," manager Ruffin Chevaleau informed them last Thursday, as reported by the L.A. Times. The L.A. Times received audio recordings of the meeting from an employee who chose to be anonymous due to the fear of losing a severance package from the ride-hailing company.
South Korea's ride-hailing service Tada, a smash hit since its launch just over a year ago, was cleared of transport law violations in court on Wednesday, a rare victory in a market that has been particularly unkind to ride-hailing companies. Since starting up in late 2018, Tada has won 1.7 million users as it capitalised on growing demand and the funding muscle of its Japanese backer SoftBank Group Corp . South Korea restricts ride-hailing to only licenced taxis and bans the use of private cars for the purpose.
The jobs from the office being closed will be shifted to a customer support office of Uber in Manila, the LA Times reported, citing sources and a recording of comments from an Uber manager. Earlier this month, Uber, which is backed by Japanese technology investment giant SoftBank Group Corp <9984.T>, moved forward by a year its target to achieve a measure of profitability to the fourth quarter of 2020, but added it still expects to lose a total of more than $1 billion this year.
SmileDirectClub, Inc. has been subject to unfair attacks from the powerful American Dental Association, short sellers, and even unscrupulous journalists, but the strong underlying business has attracted investors who see through the confusion. That’s according to IPO Edge Editor-in-Chief John Jannarone, who spoke to TD Ameritrade Tuesday. Jannarone, who recently published a detailed article on […]
It was a bumpy ride for Uber Technologies Inc (NYSE: UBER) and LYFT Inc (NASDAQ: LYFT) investors in 2019, but the ride-hailing stocks are off to a hot start in 2020. Uber reportedly conducted 15.1 million rides in New York City in December, up 0.5% from a year ago. For the entire fourth quarter, Uber generated 45.2 million New York trips, up 2.2%.
Food delivery companies DoorDash, Postmates and Uber Technologies Inc (NYSE: UBER) all held some form of merger discussion in 2019, according to The Wall Street Journal's sources. Postmates privately filed to become a public company in 2019, but delayed its IPO in October after looking at Uber's rough IPO debut and WeWork's failed public offering.
Lyft and Uber have similarities and differences that can impact your ride-sharing experience. Learn which service works better for you.
(Bloomberg) -- Last March, months before the meltdown at WeWork, Masayoshi Son worked through the prospects for another one of his favorite portfolio companies -- a startup from India called Oyo. In a spacious conference hall at his Tokyo headquarters, the Japanese billionaire huddled with lieutenants from the startup and his own SoftBank Group Corp. to brainstorm strategy. He figured Oyo had the potential to disrupt both the staid hotel business and short-term apartment rentals in Japan, according to people in the room.One bullet point scribbled on a floor-to-ceiling whiteboard, in particular, caught Son’s eye: a target of one million rooms within a year. In a burst of enthusiasm, he had everyone sign off on the goals right on the whiteboard, scrawling signatures under the words “BINDING” in all caps, according to a copy seen by Bloomberg News and the people present.Today, the Oyo unit handling apartments has about 7,500 rooms, less than 1% of the whiteboard target. Son’s aspirations turned out to be an example of dramatic overreach, part of a year in which the Japanese investor’s reputation was battered by troubles at WeWork and Uber Technologies Inc.The shortfall, which hasn’t been reported before, signals more trouble ahead for SoftBank and one of its most highly touted investments. Perhaps more concerning, the episode reveals a fundamental flaw in SoftBank’s investment strategy: Pumping billions into startups and pushing them toward outsized growth often undermines promising businesses. With its chaotic rush to expand in Japan, Oyo infuriated potential partners, alienated workers and jeopardized its reputation with local customers, according to interviews with more than two dozen of them. One incensed local customer went so far as to set up an Oyo Life Victims Association account on Twitter. Similar frustrations have been voiced by customers and hotels in India and other overseas markets.The troubles are so pronounced Son faced questions about Oyo during his earnings briefing in Tokyo last week. He conceded there have been “some conflicts with hotel owners,” but said that is normal in such businesses and overall the performance is good. “Oyo is a wonderful company,” he said.SoftBank declined to comment on the startup’s internal issues and practices beyond Son’s comments, but said it believes the company can have a sustainable expansion in Japan with good corporate governance.Oyo, founded by 26-year-old Ritesh Agarwal, has drawn particular attention in SoftBank’s portfolio of startups because of its similarities to WeWork. Both are trying to change traditional real estate businesses with technology. Both have charismatic young founders. Now, skeptics say Oyo could also fall short, further undermining Son’s grand ideas about technology investing.“Oyo is a WeWork in the making,” says Santosh Rao, head of research at New York-based Manhattan Venture Partners. “They need to slow down and pull back.”Oyo says patience is in order. In an interview, Agarwal argues his company is bringing new concepts to a business in need of fresh thinking, especially in markets like Japan. He acknowledges “teething issues” that are to be expected for a fast-growing, innovative startup and defended the use of ambitious goals.“Leaders at Oyo aspire for ambitious targets which act as directional north stars for building for scale,” he said. “From our shareholders perspective, they have said – you have a good business plan, you have continued operating as per your business plan, please keep delivering against that.”SoftBank is the largest outside shareholder at the company, whose backers also include Sequoia India and Airbnb Inc.The last thing Son needs now is another big mistake. He wants to raise capital for a successor to his $100 billion Vision Fund, but potential backers have been spooked by WeWork and Uber, as he conceded last week. At the same time, activist Paul Singer has taken a stake in SoftBank, advocating for changes to boost its share price including a buyback and more transparency.“Son needs to focus on rebuilding his reputation,” says Atul Goyal, senior analyst at Jefferies Group. “If Oyo blows up, that won’t be easy.”Agarwal got the idea for Oyo after roaming around India on a shoestring budget, witnessing first-hand the opportunity to bring order to the anarchic industry. At 19, he set up a reservation website and began working with small hoteliers on service, design and standardized accouterments like bedding and toiletries to draw more travelers. Oyo took 25% of sales.In India, the concept took off. The reassurance of basic quality fostered trust with customers and brought in extra revenue. Enamored of the idea and Agarwal, Son invested in 2015, two years after founding.But as SoftBank started the original $100 billion Vision Fund in 2017 and Son invested in the world’s biggest startups, he began to stoke Agarwal’s dreams with money and ambition, according to people directly involved. Son poured about $1.5 billion into the company and encouraged the young founder to try to become the world’s largest hotel operator by room count. That would mean surpassing Marriott International Inc., founded in 1927.The business model that worked so well in India wasn’t an obvious fit for markets like the U.S. and Europe, which already had well-established hotel chains and largely predictable quality. Yet Agarwal slogged ahead overseas, even buying a few properties outright, including the Hooters Casino Hotel in Las Vegas.Japan was supposed to be like a second home. Son is a local hero and SoftBank’s brand is ubiquitous: It operates one of the largest wireless carriers, runs the leading web portal and owns the Fukuoka SoftBank Hawks, which have won five of the last six baseball championships. SoftBank set up joint ventures through two subsidiaries to promote Oyo’s local business.That support fueled Oyo’s confidence as it entered Japan in early 2019. Agarwal decided to push into both its traditional hotels business and a newer operation called Oyo Life, which offers furnished apartments without the typical hassles of security deposits or guarantors. With Son’s enthusiastic backing at the March meeting, Agarwal and his team set the audacious goal of becoming the biggest operator in both businesses -- in one year.“Many entrepreneurs want to do a land grab, and it’s often the right thing to do, but you have to balance between your desire and ability to do it,” says Ben Narasin, venture partner at New Enterprise Associates Inc., which isn’t involved with Oyo.There were missteps at Oyo from the start. The Japan hotel team, led by a transplant from India named Prasun Choudhary, figured they could get to as many as 75,000 rooms in the first year, which would put them ahead of the Apa Hotels chain in the No. 1 spot. But they took as their starting point an inflated addressable market of 1.6 million rooms based on numbers from the local tourism authority: They included campgrounds, bed-and-breakfasts and pay-by-the-hour love hotels, which weren’t part of Oyo’s business plan, according to people involved at the time.Oyo Life, the apartment rentals business led by another Indian lieutenant called Kavikrut (who like many Indians goes by one name), set the goal of 1 million rooms in part because it was a stunning, round number that would exceed the capacity of the Japan market leader, the people said. That was the target that caught Son’s attention in March.To reach their goals, the two lieutenants began hiring furiously. Human resources staff conducted as many as 15 interviews a day, making offers to many the same day, people involved said. At job hunting events, prospects would get recruited on the spot, sometimes signing hand-written offer letters. Oyo Hotels surged to more than 580 people, while Oyo Life added 300, the company said.“Oyo believes that building a highly-motivated local team and strong management leadership is an important strategy for launching and succeeding in a new market,” Choudhary said in an interview. “This team is what has made it possible for us to partner with over 190 hotels.”But Oyo’s technology wasn’t ready. In the first three months after launch, the hotel operation double booked rooms because it had failed to integrate with local travel agencies, according to Oyo and former employees. Staff in India entered reservations made in Japanese manually, introducing errors. Some hotel owners found their rates reduced to just pennies by inscrutable algorithms. When they complained, the fix would take days because pricing was controlled in India, according to former employees.At the same time, Oyo Life workers struggled to keep track of keys they received from landlords because of software created in India. One tenant interviewed by Bloomberg spent the night in his car outside of his new apartment because he was given a wrong code for a lock box containing the keys. Even though it was during working hours, no one was manning the help lines at the company, he said. Two other customers interviewed by Bloomberg also had trouble getting into their apartments.“Oyo operated like they were driving a Ferrari, instead of a hatchback,” said Taito Ito, executive officer at Japan Accommodation and Lodging Foundation, a hotel industry group handling about a dozen complaints against the company from its members. “It’s difficult to see this business going anywhere in Japan.”There were some satisfied customers, including one Oyo Life user who raved about the convenience of getting an apartment via an app and raking in points by paying rent with a credit card.Despite the rocky start, Agarwal landed a starring role in July at SoftBank World, an annual event Son hosts in Tokyo. On stage in front of hundreds of the Japanese company’s suppliers and customers, Agarwal explained how Oyo is using data to beat the competition. Its algorithms can evaluate properties in under five days, compared with months for traditional hotels, he said. Artificial intelligence helps Oyo predict what kind of interior design can boost demand -- like pictures of Marilyn Monroe -- and adjust prices more than 43,000 times a minute.Beaming on stage, Son said it was only a matter of time before Oyo, the third-biggest hotel chain by room count, would surpass the established giants.“In three months, he will become the world’s biggest hotel king,” Son said at the time. “This would be a first in human history.”Unbeknownst to the crowd, Agarwal and Son were in talks about an unprecedented deal at the time. To increase his stake in Oyo, the young founder would borrow $2 billion to buy out some of his earlier investors. To reassure banks including Mizuho Financial Group Inc. to lend the money, Son personally guaranteed those loans, a highly unusual arrangement. The deal would double Oyo’s valuation to $10 billion.Just weeks later, in early August, it became clear Oyo’s hotel business in Japan was falling far short of its targets. Agarwal told Choudhary to start firing under-performing staff, according to a message reviewed by Bloomberg News. But top management didn’t realize at first that labor laws in Japan prohibit such layoffs, according to former HR staff.Oyo had begun hiring before it set up all its operations, so many employees joined under temporary contracts through an outside recruiter with a plan of making them full-time after six months. When that time came, Oyo tried to cut salaries for a number of them as much as 50%, according to former employees and copies of documents seen by Bloomberg News.Alarmed by worker complaints, SoftBank sent its own compliance staff into Oyo for a week-long internal audit, the people said. In the end, Agarwal’s management withdrew the low-ball offers and said the revisions were an administrative mistake. Oyo says it wasn’t downsizing and was only making a fair assessment of staff. Choudhary acknowledges that, at first, Oyo thought it could manage performance in Japan like it has in the rest of the world.Several former Oyo Life employees, who declined to be named because they signed confidentiality agreements, described a chaotic, disorganized work environment. The company poached executives from top-tier consulting and technology firms who excelled at inspirational talk, but had little understanding of real estate and even less patience for the industry’s slow-moving ways, the people said. One of them said the real estate industry just doesn’t run on startup time.The push for growth hurt Oyo’s relationship with suppliers too. In one instance, the company placed a 100 million yen ($910,000) furniture order with Japanese maker Takumi Otsuka, clinching the deal with a handshake. A month later, Oyo canceled even though the manufacturer had already set up a dedicated line and began production, according to staff from Oyo.Oyo denied the cancellation of any confirmed orders, but acknowledged there were lapses in communication in its early dealings with Takumi Otsuka. Oyo says the two companies now share a healthy business relationship and the furniture maker remains one of its valuable suppliers. Takumi Otsuka declined to comment.In October, with Oyo Hotels short of its original targets, the company mobilized support staff to do sales. It launched Project Yukichi, named after a famed educator whose face is on the 10,000 yen bill, with the goal of that many new rooms a month. The workers, already struggling to keep up with complaints from hotel owners, were told they are also responsible for producing 30 new sales leads a month, according to former employees and company presentations. The “OYOpreneurs,” as they were called, got a three-day training session from Bain & Co. to get them up to speed, the people said.With so much energy focused on sales, customer service suffered. One Oyo Life tenant told Bloomberg News he moved into his room to find bed sheets and covers, but no bed or mattress to put them on. After facing a prospect of sleeping on the floor for a week, he hauled over a futon from his parent’s house.Yutaro Kondo, a 25-year-old entrepreneur, paid 86,000 yen for a 21-square-meter studio about an hour by train from central Tokyo. While a premium to similar listings, the contract covered internet access, all utilities and the last month free of rent. But he didn’t have heat for weeks so he moved out in December. Shortly after, he got a bill for the month that was supposed to be free.“The simplicity they offered is attractive to a lot of young people,” Kondo said. “I feel pretty disappointed they didn’t deliver on that promise.”Hotel owners are unhappy too, especially with disputes over money. Oyo aimed to increase business for its partners by dropping rates at first and then increasing the price as occupancy went up. To help ease the pain, it guaranteed owners a minimum level of revenue provided they met certain criteria. Instead, a number of hotels found the payments fell short and the company unwilling to make up the difference.Oyo acknowledged such disputes and said that in some cases hotels failed to fulfill their contractual obligations. Still, it said it decided to pay in full to mend relations. One SoftBank executive said there were troubles between Oyo and about 40 hotels out of about 200, emphasizing many hotel owners are satisfied.“Employees are exhausted from dealing with Oyo,” said Shingo Ozaki, who manages Hamakan Hotel on the southwestern island of Kyushu, which is considering ending its relationship with the startup.Oyo said it is continuously working to improve software and it launched a call center that in the past month handled 1,700 tickets from partners and guests.Late last year, after the debacle at WeWork, Son overhauled his approach to startups. At a gathering of portfolio companies in California, he cautioned founders that they need to have a strategy for profitability and that growth couldn’t be the sole target. Agarwal was in attendance.But any changes may be too late for Oyo in Japan. In December, news leaked out that SoftBank’s Yahoo Japan sold its stake in Oyo Life, liquidating the partnership without any explanation. In Japan, the hotel room count has stalled at little over 5,000, with just over 300 new rooms added in December.Oyo disclosed this week that revenue increased more than four-fold to $951 million for the fiscal year ending in March 2019, while losses surged six-fold to $335 million.“Entrepreneurship is a game where you have to learn to crawl, then walk and only then to jog and run,” said Narasin of NEA. “Skipping steps can be dangerous.”At least some hotels are giving up, tired of the troubles they’ve had with Oyo. Shoji Sato, president of the company that runs an Oyo affiliate called Sawara Kita Hotel, said the company didn’t pay revenue guaranteed for January after reducing room prices to draw more customers. He said Oyo workers often ignore his inquiries or are slow to respond too. Oyo said there is no delay in payment because the January cycle closes in mid-February.“I believed in Oyo after the salesman showed me a brochure with details about SoftBank. SoftBank is led by Masayoshi Son, who is very famous and popular in Japan,” says Sato. “Now we want to end the relationship. I am angry, of course, of course.”(Updates with financial results in fourth from last paragraph)\--With assistance from Saritha Rai and Kurumi Mori.To contact the reporters on this story: Pavel Alpeyev in Tokyo at firstname.lastname@example.org;Takahiko Hyuga in Tokyo at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Peter ElstromFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Just some of the problems that can affect your earning ability are clumsiness, lack of motivation and forgetfulness. Have a schedule: Veteran drivers really need a schedule because they’ve done the job long enough to be a little weary of it.
The next generation of travel is here and now there's an exchange traded fund to help investors tap that theme following the debut of the ETFMG Travel Tech ETF (NYSE: AWAY ), which debuted on Thursday. ...
I last wrote about Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT) stock back in October. At the time, I urged Uber stock investors to consider a ridesharing pair trade by shorting Lyft stock. Since that time, Uber stock is up 28%, while Lyft stock is up 18%, netting a 10% gain for that trade while limiting downside risk.Source: Daniel Dror / Shutterstock.com At this point, I believe the pair trade has run its course. Uber and Lyft are both extremely high-risk speculative bets. Following the recent outperformance of Uber stock, I no longer see it as the safer play. The NumbersIn the fourth quarter, Uber reported a net loss of $1.1 billion, slightly better than the $1.2 billion loss it reported in the third quarter. Revenue growth was 37%, up from 30% a quarter ago.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the same quarter, Lyft reported a net loss of $356 million, significantly better than its $463 million net loss in the third quarter. Revenue growth was 52% compared to 63% in the previous quarter. * 7 Exciting Stocks to Buy for Aggressive Investors In a nutshell, Uber's revenue growth bounced back a bit in the quarter, while Lyft's continued to erode. However, Lyft is still outgrowing Uber by a significant margin, suggesting it is gaining market share. Both Uber and Lyft improved their loss situation in the most recent quarter. Lyft shaved off a higher percentage of its losses than Uber did, but Lyft is still losing more money per share.Outside of those numbers, the rest of the Uber and Lyft bull thesis is mostly just a story. The two companies are hemorrhaging cash, but investors believe that will change at some point in the future. It certainly didn't change in the fourth quarter.But the only reason why Uber stock is up and Lyft stock is down since earnings is because Uber management changed their story a bit, while Lyft did not. Lyft had previously told investors it will be profitable by the end of 2021. Uber had told investors the same thing until this month, when it changed its profitability target date to the end of 2020. What Has Changed?As soon as Uber stock and Lyft stock hit the public market last year at IPO prices of $45 and $72, respectively, I told investors to stay away. The two companies were plagued by slowing revenue growth and huge losses. Investors were simply putting their faith in a story management was telling them about how things will get better in the future.So what has changed from that situation in nearly a year? To me, the most significant changes are the stock prices. Uber is now trading at $41.25, down about 8.3%. Lyft is trading at $48.46, down 32.6%.The other thing that has changed, as I said before, is the story. Uber management's story is now that it will be profitable a year ahead of Lyft. Of course, this isn't "real" profitability. It's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) profitability. Warren Buffett's long-time right-hand man and Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) vice chairman Charlie Munger expressed his disdain for EBITDA in an interview this week."I don't like when investment bankers talk about EBITDA, which I call bulls-- earnings," Munger said. "Think of the basic intellectual dishonesty that comes when you start talking about adjusted EBITDA. You're almost announcing you're a flake."In other words, Uber said this week it will hit its bulls -- milestone before Lyft hits its bulls -- milestone. Who cares? How to Play Uber Stock and Lyft StockProfitability has become the new trend among growth stock investors because of the flood of unprofitable growth stocks to hit the market in recent years. Investors need to decide which they want-growth or profitsWhat do Uber and Lyft's arbitrary profitability targets really mean when the target is so far in the future and there are so many unknowns between now and then? Just this week, a judge denied Uber's attempt to block California's AB5 law that could slam Uber and Lyft with massive new costs. How will the driverless vehicle technology race unfold in the next two years? How will partnerships and outside investments impact these two companies?For now, all investors know for sure is growth rates. The rest is just a story. Lyft is growing at a 52% rate, while Uber is growing at a 37% rate. Lyft stock is trading at a significantly larger discount to its IPO price. If you're a high-risk trader that wants to dip a toe in, pick the story you like best. I no longer see Uber stock as the better alternative given the recent price action. But I still need to see more progress from both companies to recommend buying.Wayne Duggan has been a U.S. News & World Report Investing contributor since 2016 and is a staff writer at Benzinga, where he has written more than 7,000 articles. Mr. Duggan is the author of the book "Beating Wall Street With Common Sense," which focuses on investing psychology and practical strategies to outperform the stock market. As of this writing, Wayne Duggan does not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Exciting Stocks to Buy for Aggressive Investors * 20 Stocks to Buy From the Law of Accelerating Returns * 7 U.S. Stocks to Buy on Coronavirus Weakness The post How to Play Uber Stock and Lyft Stock Following Earnings appeared first on InvestorPlace.
(Bloomberg Opinion) -- The House of Representatives just passed an interesting bill dealing with organized labor. Known as the Protect the Right to Organize Act, the bill would ban states from enacting so-called right-to-work laws. It would make it illegal for employers to permanently replace striking workers, and it would impose a nationwide rule similar to California’s recent AB-5 legislation, reclassifying many independent contractors such as Uber drivers as regular employees. It also would impose various penalties on employers that violated labor laws or retaliated against unions. The bill is unlikely to pass a Republican-controlled Senate, but this could change after the next election.Unions have historically been a pillar of the middle class, and strengthening them could help reduce wage inequality, increase labor’s share of national income and provide many low-wage workers with much-needed stability. So the PRO Act is a welcome development. But its focus might be too narrow to make much difference.A ban on right-to-work laws has long been a goal of the labor movement. These somewhat misnamed laws don’t actually protect the right to work; instead, they prohibit unionized workplaces from requiring non-unionized workers to pay union dues, creating a free-rider problem. These laws now are on the books in 27 states, and they’ve proved difficult to expunge, even when Democrats are in power.Allowing unions to gather dues from workers who aren’t in the union would give them more financial resources, which could be spent on unionization drives. But this may not do much to halt the decline in union membership. After all, many states don’t have these laws, and private-sector unionization has still fallen precipitously:In states without right-to-work laws, unionization is about twice as high as in states with the laws -- but that’s still only about 14% of the workforce, including public-sector unions. And some of that difference may not be due to the laws, but because those states are simply more likely to tolerate unions in the first place. For example, New York has higher productivity than Tennessee, meaning that it might be more capable of supporting organized labor.So ending right-to-work laws would give unions a boost, but it would likely be a modest one. The ban on permanent replacement of striking workers might have more of an effect. It would reduce the risk to workers of going on strike, which would make unionization a more attractive prospect. Stricter penalties on companies that try to skirt labor laws would also help on the margin.But none of these changes would address the real problem with the U.S. labor system, which is the way unions are allowed to organize. Under the current system, established in the New Deal in the 1930s, each workplace votes on whether to form a union. That means that unionized workplaces, if they successfully bargain for higher wages and benefits, can place themselves at a competitive disadvantage relative to nonunion shops. Even employers who would be willing to share more of their profits with their workers will try hard to bust a union if they fear it would mean losing business to rivals. And unions are probably less willing to bargain in the first place if their employer’s higher wages wouldn’t be matched by competitors.The solution is to allow collective bargaining at the level of an entire industry -- a policy known as sectoral bargaining. For example, instead of each fast-food restaurant being forced to choose whether to be a union shop, all the fast-food restaurants in a given city would strike the same bargain at the same time. That would end the competitive disparity that now does so much to undermine unionization.Sectoral bargaining could be done several ways. One is to require all establishments in a given industry in a given area to be represented by one union. Either all workers would have to be in the union, or the union would be allowed to bargain on behalf of non-members -- a system that is used to great effect in countries such as France. An alternative is to give multiple labor organizations a seat at the table in each sector, allowing them to compete for representation by offering services to their members. A third option is to set wages in a sector with a government-appointed wage board instead of union-management negotiations.Sectoral bargaining would require a major rewrite of U.S. labor law. But as long as Congress is passing big labor legislation, it might as well be ambitious. Getting rid of right-to-work laws and making it easier to strike would be welcome changes, but only a partial corrective to unions’ long decline. We need to think even bigger.To contact the author of this story: Noah Smith at email@example.comTo contact the editor responsible for this story: James Greiff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Quarterly earnings season is a periodic glimpse into the financial strength of companies investors hope might join the S&P; 500 one day.
Both companies are under pressure to get profitable, but are facing employment law changes in California, New York and elsewhere that could have onerous consequences.
Bernard Coleman, Uber's first-ever head of diversity, has left the company, TechCrunch has learned. "Bernard's contributions over the years helped make Uber a more inclusive and diverse company and we wish him all the best," an Uber spokesperson told TechCrunch. Coleman's next stop is payroll startup Gusto, where he is leading the employee engagement team within the People Operations organization.