Uber, Doordash plunge after Labor Department proposes change to gig worker classification
Uber CEO Dara Khosrowshahi is interviewed on the trading floor at the New York Stock Exchange (NYSE) in New York, August 2, 2022.
Andrew Kelly | Reuters
The Biden Labor Department released a proposal Tuesday that could pave the way for regulators and courts to reclassify gig workers as employees rather than independent contractors.
The proposed rule, if adopted, could raise costs for companies like Lyft, Uber, Instacart and DoorDash that rely on contract workers to pick up shifts on their own schedules. Shares of Uber and Lyft fell more than 11% Tuesday morning, while DoorDash dropped about 9%.
The companies have argued that flexible schedules are attractive to workers, pointing to surveys showing the popularity of the model, and only possible under a contractor model. Some labor experts and activists have disagreed, however, saying the companies use the contractor model to reduce their own costs while denying workers important protections such as health care benefits, overtime pay, and the ability to organize into unions.
In 2020, a California law went into effect requiring many companies to reclassify contract workers as employees, but later that year, voters approved a proposition that exempted app-based ride-sharing and delivery companies from the law.
Last year, the Biden administration rescinded a rule created under Trump’s Labor Department that would have made it it easier for gig companies to classify workers as independent contractors instead of employees. But after a legal challenge, a court reinstated the Trump-era rule.
Biden’s Labor Department said in its notice on the Federal Register that it had considered waiting longer to see how the Trump-era rule played out. But it decided to move ahead with the proposed regulation instead because it believes keeping the earlier rule in place “would have a confusing and disruptive effect on workers and businesses alike due to its departure from case law describing and applying the multifactor economic reality test as a totality-of-the-circumstances test.”
The proposed rule would allow the determination of whether to classify a worker as a contractor or employee to rely on a more holistic assessment, including whether the work is an “integral” part of the employer’s business. The goal is to protect workers from being classified improperly while providing consistency for businesses that wish to employ independent contractors, the agency wrote.
The new proposed rule will still need to make its way through the formal regulatory process, including allowing time for the public to submit comments, before it is adopted.
In a blog post Tuesday, Lyft wrote that there “is no immediate or direct impact on the Lyft business at this time,” noting the 45 day public comment period. It added that the rule “Does not reclassify Lyft drivers as employees,” and also doesn’t force it to change its business model. Lyft said the rule simply reverts the standard to that used under the Obama administration, which previously applied to its company “and did not result in reclassification of drivers.”
WATCH: Uber says it’s cutting back on spending to become a free cash flow company
Two Amazon Prime Air MK30 drones collided with a crane on Oct. 2, 2025 in Tolleson, Arizona.
Courtesy: 12News
Amazon is facing federal probes after two of its Prime Air delivery drones collided with a crane in Arizona, prompting the company to temporarily pause drone service in the area.
The incident occurred on Wednesday around 1 p.m. EST in Tolleson, Arizona, a city west of Phoenix. Two MK30 drones crashed into the boom of a stationary construction crane that was in a commercial area just a few miles away from an Amazon warehouse.
One person was evaluated on the scene for possible smoke inhalation, said Sergeant Erik Mendez of the Tolleson Police Department.
“We’re aware of an incident involving two Prime Air drones in Tolleson, Arizona,” Amazon spokesperson Terrence Clark said in a statement. “We’re currently working with the relevant authorities to investigate.”
Both drones sustained “substantial” damage from the collision on Wednesday, which occurred when the aircraft were mid-route, according to preliminary FAA crash reports.
The Federal Aviation Administration and National Transportation Safety Board are investigating the incident. The NTSB didn’t immediately respond to a request for comment.
The drones were believed to be flying northeast back-to-back when they collided with the crane that was being used for roof work on a distribution facility, Tolleson police said in a release. The drones landed in the backyard of a nearby building, according to the release.
The probes come just a few months after Amazon, in January, paused drone deliveries in Tolleson and College Station, Texas, temporarily following two crashes at its Pendleton, Oregon, test site. Those crashes also prompted investigations by the FAA and NTSB. The company resumed deliveries in March after it said it had resolved issues with the drone’s software, CNBC previously reported.
Amazon says its delivery drones are equipped with a sense-and-avoid system that enables them to “detect and stay away from obstacles in the air and on the ground.” The system also allows the aircraft to operate without visual observers over greater distances, the company said.
For over a decade, Amazon has been working to bring to life founder Jeff Bezos’ vision of drones whizzing toothpaste, books and batteries to customers’ doorsteps in 30 minutes or less. But progress has been slow, as Prime Air has only been made available in a handful of U.S. cities.
Amazon has set a goal to deliver 500 million packages by drone per year by the end of the decade.
Aravind Srinivas, chief executive officer Perplexity AI, during a news conference at the SK Telecom Co. headquarters in Seoul, South Korea, on Wednesday, Sept.4, 2024.
SeongJoon Cho | Bloomberg | Getty Images
Perplexity AI on Thursday announced that its artificial-intelligence-powered web browser Comet is available worldwide, and will be free to users.
The Comet browser is designed to serve as a personal assistant that can search the web, organize tabs, draft emails, shop and more, according to Perplexity. The startup initially launched Comet in July to Perplexity Max subscribers for $200 a month, and the waitlist has ballooned to “millions” of people, the company said.
Tune in at 8:10 a.m. ET Friday as Perplexity co-founder and CEO Aravind Srinivas joins CNBC TV to discuss the release of its AI browser Comet to users for free. Watch in real time on CNBC+ or the CNBC Pro stream.
Perplexity’s decision to provide Comet for free could help it attract more users as it works to fend off rivals like Google, OpenAI and Anthropic that have their own AI browser offerings.
In September, Google rolled out Gemini in its Chrome browser, Anthropic announced a browser-based AI agent in August and OpenAI announced Operator, an agent that uses a browser to complete tasks, in January. Perplexity made an unsolicited $34.5 billion bid for Google’s Chrome browser in August.
Perplexity is best known for its AI-powered search engine that gives users simple answers to questions and links out to the original source material on the web. After the company was accused of plagiarizing content from media outlets, it launched a revenue-sharing model with publishers last year.
The company also introduced Comet Plus in August, which is a subscription that gives users access to content from “trusted publishers and journalists,” according to a blog post. Perplexity said Tuesday that CNN, Condé Nast, The Washington Post, Los Angeles Times, Fortune, Le Monde, and Le Figaro are its inaugural publishing partners.
Perplexity said additional features are also on the way. The company teased a mobile version of Comet and a feature called Background Assistant, which can work on multiple tasks simultaneously and asynchronously.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment12 months agoHere are the best electric bikes you can buy at every price level in October 2024