The Gig Economy Fights Back

Plus: The travel boom may not be sustainable, environmentally at least. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

July 7, 2023

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Morning Brief

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The gig economy continues its endless fight to remain a gig economy.

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Lobbyists see gas stoves as the dam holding back the electric flood.

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The UK’s airports must weigh effects on climate.

Gig Economy

Uber Eats, DoorDash, Grubhub Team Up to Sue New York City

New York City just got a special delivery: lawsuits courtesy of Uber Eats, DoorDash, and Grubhub.

On Thursday, the trio of gig economy mavens, plus upstart competitor Relay, sued the city over sweeping new rules that would require paying gig workers a guaranteed $17.96-an-hour minimum wage — a move, they say, that would upend the city’s entire gig economy ecosystem.

A Declaration of Independent Contractors

It’s a tale as old as, well… at least as old as Uber. Should drivers for delivery and ride-share apps be considered employees — and thus receive the benefits and guaranteed wages of a regular job? Or are they, as the companies have mostly defined them, independent contractors enjoying the ever-flexible fruits of gig work, like setting their own hours and accepting and rejecting tasks as they see fit? It’s a status quo the companies have long fought to protect. Most notably, in 2020, Uber, Lyft, Instacart, and Postmates poured a record $205 million into supporting a California state ballot measure known as Proposition 22 to keep drivers classified as independent contractors. The group won, and secured the victory in a California appellate-court case this past spring upholding the measure.

Now the industry faces a similar fight on the East Coast, with DoorDash and Grubhub filing a joint lawsuit in the Supreme Court of New York, while Uber Eats and Relay each filed separate suits. The law, set to go into effect on Wednesday, could “cause immediate and irreparable harm” to their businesses, Uber said in its complaint. Here’s how the math works out:

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The city’s new rule would require companies to either pay the roughly $18 per hour minimum, or 50 cents for every minute a driver spends on a single trip, with each rate excluding tips. That’s a healthy beat higher than the city’s overall $15-per-hour minimum wage.

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That would radically change the fluctuating per-gig rate system that delivery drivers now receive. The companies argue the new law could lead to contractors simultaneously logging on to various apps, essentially earning wages from multiple companies at once and leading to significantly higher consumer fees — possibly harming restaurants’ takeout business as well.

Add it to the List: The lawsuits are just the latest filed against the city. DoorDash, Uber Eats, and Grubhub are also suing over a 2021 law that caps the commission they can take from restaurant sales to just 23%. A similar law in San Francisco limits their cut to just 15%. The trio is also suing the city over another law that requires the apps to share basic customer data — such as names, addresses, and phone numbers — with the local restaurants taking orders, unless users decide to opt-out. Then again, what’s the point of living in the country’s densest city, with takeout options aplenty, if you’re going to wait an hour to overpay for app delivery?

– Brian Boyle

Energy

Utilities Lobby to Protect Gas Stoves, But It’s Not About Appliances

Steel yourselves for battle, culture warriors. Gas stove bans may be only the beginning and household gas may be next — or at least, that’s what lobbyists fear.

The Financial Times reported Thursday that US utility lobbyists have been working hard behind the scenes to head off any bills that might curtail the use of gas stoves.

Per the FT, the lobbying is less about stoves and more about drawing a line in the sand for lawmakers thinking about limiting household gas more broadly.

Gas Giants

Concerns that the US government might ban gas stoves over health concerns started to swirl in January when Consumer Product Safety Commissioner Richard Trumka said: “Products that can’t be made safe can be banned.” The following day the CPSC hastened to add it isn’t looking to ban gas stoves in the near future — but it had already become an intensely divisive issue. Republicans stood behind consumers’ right to choose their own, and in June the House of Representatives passed the “Save Our Gas Stoves Act.”

Per the FT, gas utilities lobbied that bill and others as a threat to their bottom lines. The thing is, gas stoves don’t actually make them that much money:

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“The actual financial hit for a complete nationwide ban on natural gas stoves is very small, and not really a huge issue,” Ryan Kelley, portfolio manager of the Hennessy Gas Utility Fund, told the FT. “I think the bigger issue is that the trend will lead to outright banning of anything in the home that uses natural gas,” he added.

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Residential gas usage accounted for around 15% of the US’ total natural gas consumption in 2022, according to the US Energy Information Commission, and 42% of the residential sector used gas for its energy needs. US natural gas consumption also hit a record high in 2022, but demand is forecast to fall next year, putting more time pressure on lobbyists to safeguard future revenue.

Gaseous States: While an overarching gas stove ban has yet to materialize, some states are taking a more piecemeal approach to making them less common. New York approved a ban on gas-powered appliances in May. Some cities and counties in California adopted similar rules on new construction a few years ago, but these were overturned by a federal appeals court. It’s all very on-again-off-again, kind of like an old gas stove.

– Isobel Asher Hamilton

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Aviation

Gatwick Airport Expansion Flies Over Climate Change Concerns

(Photo Credit: Neil Mewes/Unsplash)

No one tell Heathrow…

The UK is discovering a downside to the booming, post-pandemic demand for air travel. Expansion plans for UK airports, especially London Gatwick, are flying in the face of growing environmental concerns and net-zero initiatives.

Things are Heating Up

Gatwick — the UK’s second-largest airport — plans to expand to a degree that would put it ahead of London’s Heathrow. As part of a £2.2 billion project, Gatwick would activate its standby runway, essentially doubling passenger capacity to 75 million per year. Gatwick Chief Executive Stewart Wingate told the Financial Times that the plan follows government calls for airports other than Heathrow to expand with existing infrastructure.

Eight of the UK’s other largest airports, including Manchester, Stansted, and Luton, also plan to expand. The commercial airline industry has pledged to start using less polluting fuels, but scientists and green advocates don’t think the UK can meet its pledge to attain net-zero carbon emissions by 2050 if airports continue to expand:

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Last week, the UK’s Climate Change Committee said it had “markedly less” confidence than a year ago that the country can achieve its climate goals over the next few decades, suggesting airport expansion should pause until there are more emission controls in place.

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According to the European Council for an Energy Efficient Economy, airplanes emit roughly 100 times more carbon dioxide per hour than buses or trains. Globally, commercial aviation releases 1 billion tons of CO2 per year — more than most individual countries, and behind only Japan, Russia, India, the US, and China.

Even London Mayor Sadiq Khan, who once supported Gatwick’s expansion plans, has flipped. “The mayor fails to see how any airport expansion can be justified if it is incompatible with tackling the climate crisis and achieving our net zero targets,” a spokesperson told The Guardian.

Build it, They will come: Gatwick says expansion would create 3,000 jobs at the airport and put £1bn into the local economy every year. And a YouGov poll found that nearly 80% of people in the surrounding counties support Gatwick’s expansion. Just don’t be surprised when all your vacation destinations turn into tropical ones.

– Griffin Kelly

Extra Upside

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Munchies, man: The FTC says cannabis cookies Stoneos look too much like Oreos.

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Trouble when you walked in: Taylor Swift agreed to an FTX deal, after all.

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