Uber gets a regulatory reprieve over drivers’ employment status + China’s response to ChatGPT falls flat
Uber battles with drivers over their employment status: Ridersharing and app-based companies can now treat their drivers as independent contractors rather than employees, reports Reuters, after a California court ruled overturned a 2021 lower court ruling, calling it “unconstitutional.” The decision removes some of the regulatory risk for app-based companies like Uber, DoorDash, and Lyft. Markets responded positively to the news yesterday, with Uber shares ending yesterday’s trading session up 7%, while Lyft and DoorDash each closed up 6%. Challenges to the ruling are expected — but don’t count on them coming any time soon. Analysts said that it could take months for a case to be accepted and over a year to issue a ruling.
Could this ruling change things outside of California, too? In 2021, Uber caved to labor activists in the UK and agreed to give its drivers full employment status that entitles them to minimum wage, vacation pay, and pensions. While the California ruling only sets the rules for the state, it could pave the way for other states to follow — even more appealing, given that the ruling helped Uber avoid a hit of USD 20 mn to their 2024 core earnings, while DoorDash avoided a USD 170 mn hit.
China botches its attempt at an AI bot to challenge ChatGPT’s supremacy: In a rush to meet market demand, China’s leading search engine Baidu scrambled to launch its answer to OpenAI’s ChatGPT, Reuters reports. CEO Robin Lee’s demonstration of Ernie Bot — a rough acronym for “Enhanced Representation through Knowledge Integration” — was met with disappointment as they screened only pre-recorded videos of the bot’s task fulfillments, prompting company shares to fall as much as 10% before making a slight recovery.
Is that… all of it? During his 45-minute presentation, Lee stated that Baidu hopes to someday integrate Ernie Bot to browsers, smart cars, and cloud services. But after four years of development (and USD bns spent on research and development), it is still only available to a small group of users by invite, generating a collective groan from the online presentation’s 2 mn viewers. The introduction of Ernie Bot comes one day after OpenAI’s launch of GPT-4, an upgrade that allows the Microsoft-backed chatbot to generate content based on image prompts as well as text.