New California law says Uber drivers are employees, Uber says they’re contractors

A new law looks set to be passed in California that could set a much wider precedent regarding the employment status of participants in the gig economy.

One of the most disruptive trends brought about by the mobile internet is the gig economy, in which people are able to get casual, piecemeal work simply by registering through a mobile app with a company that matches people who need a service with people willing to supply it. In many ways it has revolutionised the labour market, but there is also considerable disquiet about the lack of employment rights afforded to these ad hoc workers.

A new law in California seems designed to address this disquiet. It’s called Assembly Bill 5, or AB5 for short, and it recently overcame its main legislative hurdle to becoming law. AB5 seeks to reclassify a lot of gig economy workers from contractors to employees. Contractors get hardly any employment rights, such as sick pay, while employees are legally entitled to a bunch of them.

As with most labour relations issues there are two sides to this, each with their own merits. On one hand it does seem unfair for gig economy workers, such as Uber drivers, to get no employment rights despite often working full-time at the job in question. On the other hand they are free to do other work at the same time, a key feature of contracting.

Lastly there’s the fact that the primary differentiator for gig economy services over legacy ones is price. It’s precisely because the internet company facilitating this labour exchange doesn’t have the overheads of a traditional company, which includes things like employee benefits, that the service is so much cheaper.

Even with these advantages Uber is losing a billion bucks a quarter, so it’s highly debatable whether or not it would even be a viable business if it was forced to reclassify its drivers as employees. As you would expect it has been lobbying extensively against this law and doesn’t intend to give up just because it’s on the verge of losing that specific fight.

In his recent update on the AB5 situation Uber Chief Legal Office Tony West, challenged the reclassification of Uber drivers, noting they’re free to work for competitors too and asserting that ‘drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces.’

This kind of law-making seems like an existential threat to the gig economy which, while arguably exploitative towards its employees (sorry, contractors), also offers flexible work to people who might not otherwise be able to earn at all and presents consumers with great value for money. If the precedent set by California spreads, the digital economy could be set for its biggest shake-up to date.

Cuba enters mobile internet age with 3G few can afford

Cuba’s telecom operator will offer 3G data service to prepaid users, but with high-tariffs one question remains; can any of the locals actually afford it?

The previously isolated communist state has undergone gradual reform since the more pragmatic Miguel Diaz-Canel took over at the helm, and one of the goals is to catch up the rest of the world on internet adoption and to develop an information society. As an important step towards this direction, Cuba’s the state-owned telecom operator ETECSA (Empresa de Telecomunicaciones de Cuba S.A.) announced (in Spanish) that the company will start offering 3G data services to its prepaid customers from 6 December, one year after it started offering internet connections to residential locations. Before that, most Cubans could only go online from internet cafes.

The monthly packages (in Spanish) start at 600 MB data which will cost 7CUC ($7), going up to 1 GB (10CUC), 2.5 GB (20CUC), and 4GB which will cost 30CUC. Another 300 MB will be granted for free on top of all packages for visiting local website (domain .cu). Otherwise, 1CUC can get 50 MB For email use only (on ETECSA’s email service Nauta). The service is on 900 MHz only, meaning handsets will have to be compatible to that specific frequency. Users applying to use the service can activate directly over-the-air with the operator.

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There is no recent data on Cuban income from sources like the World Bank. Earlier data showed the average monthly salary was about $27 to $32, though independent survey and research have indicated that many locals do make extra income through different channels. Even with the additional income, the data packages are way too high for most users. Research in other emerging markets has shown that the adoption of broadband will take off when the cost of the package reaches below 5% of monthly disposable income.

The operator could be pricing its packages to limit the number of users, as its networks are not capable of coping with high traffic volume yet. As the national monopoly, ETECSA has installed 1,078 2G base station, and 789 3G base stations, according to its published data. In its announcement the operator also warns users that in the first days of the service there may be down time, and asks consumers to inform the operator through official channels.

According to research by Ovum, mobile penetration in Cuba went just over 44% by the end of Q2 this year. The country’s internet population (“permanent internet accounts”) has reached 1.9 million.

Young people are obsessed with the mobile internet, who knew?

New global research by networking vendor CommScope reveals users aged 13-22 are umbilically dependent on their smartphones.

This age range is being referred to as Generation Z and CommScope spoke to 4,000 of them in eight major cities around the world. The top-line findings are that they check their phones constantly, share stuff feely online – none of which they expect to remain private – and their most popular career aspiration is to be a famous YouTuber.

“Tech intimates, that check their devices every three minutes on average, are set to shape how we live, work and play in the future,” said Fiona Nolan, SVP of Global Marketing at CommScope. “Their attitudes and usage of technology will have a big impact on society, paving the way for significant social, political and technological changes.

In the space of a generation content consumption habits have moved almost entirely from broadcast to on-demand. Today’s teenagers find the thought of consuming a piece of video content when it’s broadcast, rather than whenever they want it, to be as anachronistic as sending a telegram.

The telecoms relevance of all this is already well known: on-demand usage requires data networks. And while anyone who has kids is unlikely to find the findings of this survey remotely surprising, it’s still interesting to see what Generation Z is up to. Here are some more data points from the survey.

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Elsewhere YouGov has surveyed the next generational pigeon-hole – the Millenial – and it turns out their favourite brand is Netflix. A quick inference you could draw from this is the video viewing transition has gone from broadcast to on-demand to user-generated in the space of a generation.