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Human Capital: Court ruling could mean trouble for Uber and Lyft as gig workers may finally become employees

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Welcome back to Human Capital! As many of you know, Human Capital is a weekly newsletter where I break down the latest in labor, as well as diversity and inclusion in tech. It’s officially available as a newsletter, so if you want this content when it comes in hot Fridays at 1 p.m. PT, subscribe here

Since the election is coming up, this edition focuses heavily on California ballot measure Proposition 22. The TL;DR is that gig companies like Uber, Lyft and DoorDash really want to keep classifying their drivers and delivery folks as independent contractors, so they put millions of dollars into this ballot measure. This week, we saw Prop 22-related complaints and lawsuits filed, and an appeals court judge decide Uber and Lyft must reclassify their drivers. We also heard directly from gig workers on both sides about why they do or do not want to be independent contractors.

But we’ll also look at SoftBank’s first investment from its D&I fund, Pinterest’s addition of a new Black board member and more. Let’s jump in. 


Labor Struggles


Uber and Lyft must classify drivers as employees, court rules

But. And this is a big but. Uber and Lyft will likely appeal this decision and it’s also possible this decision won’t matter depending on how Prop 22 goes. We’re just a couple of weeks out from Election Day and this decision has a thirty day hold on it once the remittitur goes into effect. And that remittitur has not yet been issued.

Throughout the case, Uber and Lyft have argued that reclassifying their drivers as employees would cause irreparable harm to the companies. In the ruling today, the judge said neither company would suffer any “grave or irreparable harm by being prohibited from violating the law” and that their respective financial burdens “do not rise to the level of irreparable harm.”

Additionally, there is nothing in the preliminary injunction, according to the judge, that would prevent Uber and Lyft from offering flexibility and independence to their drivers. Lastly, the judge said Uber and Lyft have had plenty of time to transition their drivers from independent contractors to employees, given that the key case in passing AB 5, the gig worker bill that spurred this lawsuit, was decided in 2018.

Amazon workers protest for time off to vote

Ahead of Election Day, Amazon employees protested at the company’s headquarters in Seattle for paid time off to vote. In a statement to GeekWire, Amazon said employees that don’t have enough time off can request additional, excused time off. 

“The number of hours and pay provided to employees varies by state in line with local laws,” the spokesperson said.

According to GeekWire, Amazon notified managers that they should approve PTO requests for voting. 

Tech companies that are giving employees paid time off for Election Day include Salesforce, Apple (hourly employees get four hours), Facebook, Twitter, Uber and others. 

No on Prop 22 camp files complaint with USPS against Yes on 22

Opponents of California’s Proposition 22  filed a complaint this week with the United States Postal Service. The No on 22 campaign alleges the Yes side is not eligible for a nonprofit postal status and is asking USPS to revoke its permit.

It’s much cheaper to send campaign mailers as a nonprofit organization. For example, sending between 1 – 200,000 small mailers to every door normally costs $0.302 per piece. As a nonprofit, that costs $0.226 per piece, according to USPS. To be clear, the Yes on 22 campaign confirmed it was formed as a nonprofit organization under IRS section 501(c)(4), which pertains to social welfare organizations. But the No on 22 side says USPS erred in approving the Yes on 22 campaign.

In a statement to TC, Yes on 22 spokesperson Geoff Vetter said, “As a 501(c)(4) organization, Yes on 22 is eligible for the appropriate nonprofit postage rates with the USPS, which we applied for and were granted by the U.S. Postmaster.”

Uber faces class-action lawsuit over Prop 22

Uber is facing a class-action lawsuit over Proposition 22 that alleges the company is illegally coercing its drivers to support the ballot measure that seeks to keep workers classified as independent contractors. The suit was brought forth by two Uber drivers, Benjamin Valdez and Hector Castellanos, as well as two California nonprofit organizations, Worksafe and Chinese Progressive Association.

In the suit, the plaintiffs argue Uber has encouraged its drivers and delivery workers to support Prop 22 via the company’s driver-scheduling app.

“This is an absurd lawsuit, without merit, filed solely for press attention and without regard for the facts,” Uber spokesperson Matt Kallman said in a statement to TechCrunch. “It can’t distract from the truth: that the vast majority of drivers support Prop 22, and have for months, because they know it will improve their lives and protect the way they prefer to work.”

Shipt workers protest outside Target and Shipt headquarters

Shipt shoppers followed through with their protest plans this week when they staged actions at Target’s headquarters in Minneapolis and Shipt’s headquarters in Birmingham, Ala. 

Ahead of the protests, Shipt shopper and organizer with Gig Workers Collective told me his goal was to bring attention to the new pay structure Shipt began rolling out and how shoppers “are getting paid less for more effort.”

Gig workers speak for and against Prop 22

TC relaunched the Mixtape podcast and as part of that, Henry Pickavet and I chatted with Vanessa Bain, an Instacart shopper who opposes Prop 22 and Doug Mead, a gig worker who supports Prop 22. The whole episode is worth listening to, but here are some key nuggets from them. First up, Bain:

“If all it takes is putting the hiring process and the bossing into an app on your phone to rewrite labor laws, every company on the planet is going to be doing that. There’s so much more, unfortunately, at stake here than just Uber and Lyft and ride share and grocery delivery and how you’re going to get your DoorDash orders. Literally the future of labor is at stake.”

Next up, Mead:

“It’s really the government — their intent to remove a person’s control over how they want to be compensated. And that to me just makes no sense whatsoever,” Mead told us. “I should be in control of how I want to be compensated and by who.”

You can check out the full episode here


Stay Woke


SoftBank invests in Vitable Health as part of D&I fund

SoftBank’s $100 million Opportunity Fund, which it formed in June to invest in founders of color, made its first bet on Vitable Health. The company focuses on providing health insurance to underserved and low-income communities. 

SoftBank’s Opportunity Fund led the $1.6 million round, which included participation from Y Combinator, DNA Capital, Commerce Ventures, MSA Capital, Coughdrop Capital and a handful of angel investors. 

Pinterest brings on another Black board member 

Pinterest brought on its second Black female board member, Salaam Coleman Smith. Smith’s appointment comes a couple of months after Pinterest appointed its first Black board member, Andrea Wishom.

Smith is the former EVP of Programming and Strategy at Disney’s ABC Family and Freeform, as well as former president of Comcast NBCUniversal’s Style Media. 

Here’s an updated look at Black board member representation at major tech companies.

Netflix is launching a tech bootcamp for HBCU students 

Netflix announced a virtual HBCU Boot Camp for students from Norfolk State University, a historically black university in Virginia. Specifically, it’s open for current students and alumni from the classes of 2019 and 2020.

In partnership with online education platform 2U, the boot camp will teach 130 students Java engineering, UX/UI design and data science over the course of 16 weeks beginning in January. A bonus is that members of Netflix’s data science, engineering and design teams will serve as mentors to the students. 

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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iPhone zero-click Wi-Fi exploit is one of the most breathtaking hacks ever

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The screen on the iPhone 12 Pro Max

Enlarge / That’s a lot of screen. (credit: Samuel Axon)

Earlier this year, Apple patched one of the most breathtaking iPhone vulnerabilities ever: a memory corruption bug in the iOS kernel that gave attackers remote access to the entire device—over Wi-Fi, with no user interaction required at all. Oh, and exploits were wormable—meaning radio-proximity exploits could spread from one near-by device to another, once again, with no user interaction needed.

This Wi-Fi packet of death exploit was devised by Ian Beer, a researcher at Project Zero, Google’s vulnerability research arm. In a 30,000-word post published on Tuesday afternoon, Beer described the vulnerability and the proof-of-concept exploit he spent six months developing single handedly. Almost immediately, fellow security researchers took notice.

Beware of dodgy Wi-Fi packets

“This is a fantastic piece of work,” Chris Evans, a semi-retired security researcher and executive and the founder of Project Zero, said in an interview. “It really is pretty serious. The fact you don’t have to really interact with your phone for this to be set off on you is really quite scary. This attack is just you’re walking along, the phone is in your pocket, and over Wi-Fi someone just worms in with some dodgy Wi-Fi packets.”

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Cultured meat has been approved for consumers for the first time

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The first lab-grown, or cultured, meat product has been given the green light to be sold for human consumption. In the landmark approval, regulators in Singapore granted Just, a San Francisco–based startup, the right to sell cultured chicken—in the form of chicken nuggets—to the public. 

Just had been working with the regulators for the past two years and was formally granted approval on November 26. Singapore’s regulatory body assembled a panel of seven experts in food toxicology, bioinformatics, nutrition, epidemiology, public health policy, food science, and food technology to evaluate each stage of Just’s manufacturing process and make sure the chicken is safe to eat. “They didn’t just look at the final product; they looked at all the steps that led to that product,“ says Josh Tetrick, Just’s cofounder and CEO. “We were impressed with how thoughtful and rigorous they were.”  

An as-yet-unnamed restaurant in Singapore will soon be the first to have Just’s cultured chicken on the menu, but Tetrick says he plans to expand after that. “We’ll go from a single restaurant to five to 10 and then eventually into retail and then after that, outside Singapore,” he says. 

Most cultured meat is made in a similar way. Cells are taken from an animal, often via a biopsy or from an established animal cell line. These cells are then fed a nutrient broth and placed in a bioreactor, where they multiply until there are enough to harvest for use in meatballs or nuggets. A slew of startups have been founded using variations on this approach, in the belief that cultured meat will appeal to flexitarians—people who want to reduce the amount of meat they eat for ethical or environmental reasons, but don’t want to give it up entirely.

The budding industry has progressed a long way since a $330,000 burger was famously cooked on TV in 2013, driven by the idea that if it’s done right, meat could be produced with far lower greenhouse-gas emissions and zero animal suffering. But cost is still a hurdle: the high price of the growth factors required to develop the cells mean the price tags for pure cultured meat products are still measured in hundreds of dollars per pound, far too expensive to compete with regular meat. So Just’s first chicken products will be chicken “bites” that use cultured chicken cells mixed with plant protein—although Tetrick wouldn’t say in what proportion. “Chicken nuggets are already blended—this one wont be any different,” he says. The bites will be labeled as “cultured chicken” on the restaurant’s menu.

Singapore’s decision could kick-start the first wave of regulatory approvals around the world.

“We are hoping and expecting that the US, China, and the EU will pick up the gauntlet that Singapore just threw down,” says Bruce Friedrich, executive director of the Good Food Institute, a nonprofit that works in meat alternatives. “Nothing is more important for the climate than a shift away from industrial animal agriculture.”

While Just has beaten them to the punch, many big firms are already working with regulators to get their own products to market. This is not something to be rushed, Friedrich says: “It is critical for cultivated meat companies to be extra careful and to go beyond consumer expectation in ensuring consumer comfort with their products.”  

Memphis Meats, which counts Bill Gates, Richard Branson, and traditional meat manufacturer Tyson Foods among its many investors, has teamed up with a number of other firms, including Just and cultured-seafood makers BlueNalu and Finless Foods, to form a lobbying group that is working with US regulators to get their products approved.

The way that might actually happen was only hammered out relatively recently. In March 2019, it was announced that the FDA would regulate the early stages of the cultured-meat process, including cell banks and cell growth. The US Department of Agriculture’s Food Safety and Inspection Service will then take over at the cell harvesting stage and will inspect production facilities and approve labels used on cultured-meat products. In Europe, companies must apply for authorization and meet the European Union’s regulation on novel foods. The process is likely to take at least 18 months, and no cultured-meat company has yet applied.

Both Singapore and Israel have actively made themselves welcoming to startups in plant and cultured meat, Freidrich says. Governments should follow their lead and start treating this like initiatives in renewable energy and global health, he says.

“We need a space-race-type commitment toward making meat from plants or growing it from cells,” he says. “We need a Manhattan Project focused on remaking meat.”

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Longtime investor and operator Adam Nash says he just launched a new fintech startup

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Adam Nash, a Silicon Valley-born-and-bred operator and investor, is back at it again.

Today, on his personal blog, he announced that he has started a consumer fintech company that has already garnered initial funding from Ribbit Capital, along with other “friends and angels” who appear to have also pitched into the round, including Box CEO Aaron Levie, Mighty Networks founder Gina Bianchini, Superhuman founder Rahul Vohra, and Amy Chang, who sold her startup Accompany to Cisco in 2018.

Nash didn’t reveal many details in the post or later on Twitter, saying he’ll have more to say when the company is closer to launching. All we really know at this point is that he cofounded the company with Alejandro Crosa, an Argentinian software engineer who most recently spent five months at Slack but logged more than three years at both Twitter and LinkedIn before that.

Nash said on Twitter that the two met at LinkedIn, where Nash was himself VP of product management for four years beginning in 2007. It’s a good detail to know, considering that Nash has logged time at a wide variety of tech outfits over the years, making it hard to guess at whom he knows and from where.

A computer science graduate of Stanford, where he later nabbed a master’s degree, Nash began his career interning at NASA, HP, and Trilogy before landing his first big job as a software engineer at Apple in 1996 (when former PepsiCo exec, John Sculley, was briefly running the place).

After moving on to a bubble-era company that no longer exists, Nash tried his hand at VC for the first time, joining Atlas Venture as an associate. To get more operating experience, he then jumped to eBay, where he was a director; LinkedIn, where he met Crosa; then Greylock, where he spent just over a year as an entrepreneur-in-residence (EIR) before joining the wealth-management startup Wealthfront as its president and CEO, a job that the company’s original CEO and founder, Andy Rachleff, reclaimed in 2016.

Nash didn’t disappear from the scene. Instead, he rejoined Greylock as an EIR for another year before joining Dropbox shortly after it went public in 2018 as its VP of product and growth, leaving that post back in February to start his own thing, he said at the time.

That Nash would start a fintech company specifically isn’t surprising, considering his involvement with Wealthfront, as well as some of the personal investments he has made in recent years.

In 2018, for example, he wrote a check to LearnLux, a five-year-old, Boston-based educational startup that helps employees better understand their 401k, health savings accounts, and stock options. He is also an investor in Human Interest, a five-year-old, San Francisco-based startup that offers automated, paperless 401(k) plans.

Nash is also riding a very big wave.  According to Pitchbook, consumer fintech is on pace to attract a record amount of venture funding in 2020, at least in North America and Europe.

We’ll let you know more about what Nash is building as soon as he’s ready to share more. The little that Nash is saying publicly for now is that he and Crosa believe there is “still a lot more to do in consumer fintech, and that through software we can help bring purpose to the way people approach their financial lives.”

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