Oct 18, 2019
The Federal Government is considering introducing excise duties on carbonated drinks, according to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
 
Ahmed gave the indication in an interview with newsmen on Thursday on the sidelines of the ongoing World Bank/IMF Annual Meetings in Washington DC, United States.
 
She said the idea was one of the other areas, besides the proposed increase in VAT, that the government was looking at to broaden its revenue base.
 
The minister explained that the government was working hard to ensure efficiency in existing revenue streams while searching for new ones.
 
She said the government would consult with all stakeholders on the proposal in line with standard policy formulation process.
 
“Any tax that you are introducing will involve a lot of consultations and also amendments of some laws or introduction of new regulations,” she said.
 
Carbonated drinks include soft drink brands such as Coca Cola, Sprite and Fanta, while excise duty is a tax levied on locally produced goods.
 
Ahmed said her ministry was working with all the agencies to ensure that collaboration was strengthened in revenue generation.
 
“The government is trying to ensure that the work of the agencies are complementing each other as opposed to the past where everybody is working in silos.
 
“Efforts are ongoing to improve the monitoring performance of the revenue-generating agencies, especially government-owned enterprises.
 
“We have now in place a rigorous monthly reconciliation of revenues and that is ensuring that the leakages are minimised.
 
“There is several cost-cutting measures in the SRGI and a number of cost-cutting measures initiatives such as innovation and automation as well as capacity building of our people,” she said.
 
The minister reiterated the government’s resolve to sanction revenue generating agencies that fail to meet their targets.
 
“Mr President has said that targets will be set for ministers as well as heads of agencies and that when targets are met there will be recommendations and when there are not met there will be consequences.
 
“So, what was missing in the past was that there were no consequences, so if an agency underperformed there is no consequences for doing so.
 
“But now there will be consequences and we will be pushing to make sure that we provide all the support that the agencies will require to enable them perform,” she said.
Oct 18, 2019
The Nigerian Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday said there are debts owed by states and government enterprises that have not been captured in the N25.7 trillion recently declared as total national debt.
 
Ahmed made this known during a panel discussion on Debt Transparency at the ongoing World Bank/IMF Annual Meetings in Washington, United States.
 
This revelation is coming two days after the Debt Management Office (DMO) published a summary of the nation’s debt as at June 30.
 
The minister disclosed plans by the government to produce a more comprehensive debt database with emphasis on providing detailed breakdown of projects related to borrowings.
 
“Going forward, we want to scan the environment and have a good database of all the debts that government owes, whether at the sovereign or subnational level.
 
“Also, we are trying to capture debts of the state-owned enterprises, and debts we owe local creditors.
 
“We want to be able to show more clearly debts that are related to specific projects like debts that we owe to countries like China.
 
“Right now, they are reported as part of the public debt but there is no detailed drill down to show the projects tied to them,” she said.
 
Ahmed said the move was partly in response to increasing demand from the civil society and the Nigerian public for more transparency in the system.
 
She, however, enumerated measures currently in place to ensure transparency in government’s borrowing and debt management.
 
The minister explained that all government borrowings were subject to legislative approval conducted in a transparent manner.
 
“Nigeria also publishes quarterly data (sovereign and sub-national) as well as the composition of external and domestic debt.
 
“In addition, it publishes its Debt Management Strategy, Debt Sustainability Analysis and National Debt Management Framework, and all these are available at the DMO website,” she said.
 
She highlighted the benefits of transparency in the system to include helping local and foreign investors, and multilateral and bilateral creditors with their investment and lending decisions.
 
The Federal Government, according to the minister, is also undertaking a major programme to assist states with grants and technical assistance to strengthen their fiscal transparency, accountability and sustainability.
 
She said the government was embarking on the programme with the support of a 750-million-dollar World Bank financing using the bank’s Programme-for-Results instrument.
 
According to her, the initiative will also help benefitting states in debt reporting, domestic expenditure arrears management, and debt sustainability analyses.
 
She, however, noted that the support would be given based on the performance of beneficiaries in fiscal transparency and debt management practices
 
Oct 18, 2019
President Trump will host next year’s Group of 7 meetings next June at Trump Doral, his luxury resort near Miami, the president’s acting chief of staff told reporters on Thursday.
 
This is a move benefitting the Trump Organisation that will alarm ethics watchdogs.
 
“It’s almost like they built this facility to host this type of event,” Mick Mulvaney, acting White House chief of staff told reporters, quoting what he said an unnamed official told him during a press briefing before quickly saying that the issue was not a conflict of interest.
 
“The president has made it clear since he’s been here that he hasn’t profited since he’s been here,” he added dismissing questions over the propriety of the president’s picking his hotel.
 
Mr. Mulvaney explained that the president had considered the possibility of the “political sort of criticism” in picking the resort. But he said Trump chose it anyway because administration officials had considered hotels throughout the country, and concluded that the Trump National Doral was “by far and away, far and away, the best physical facility for this meeting.”
 
Oct 18, 2019

United Bank for Africa (UBA) Liberia on Wednesday, October 16, 2019, launched its Chat Banking Product dubbed LEO.

The online banking product which can be accessed on Facebook Messenger and WhatsApp will allow customers to make use of their social media accounts, to open account, transfer money from one account to another, get account statement, buy airtime, get customer service assistance, load their UBA Pre-paid Card and whole lot more.

UBA’s Leo platform is a highly advanced development for a financial institution in Africa, particularly in Liberia, which aims to simplify the way customers transact. The bank says it is something that has become necessary in today’s fast-paced world with demands for quick-time transactions and responses.

UBA Liberia Managing Director and Chief Executive Officer, Olalekan Balogun, who introduced the online banking platform said, the aim of the product is to create an easy convenient and easy kind of banking in the 21st century thereby, making banking easier for those who do not have the time to stand in the banking hall and always on the go.

Balogun expressed thanks and appreciation to the students and the rest of the audience who turned out for the launch of the product on the campus of the African Methodist Episcopal University. He further encouraged them to be a part of the digital age in banking that is being introduced by UBA.

Earlier, Melody Mezay Ketter, Head of Marketing and Corporate Communications at UBA Liberia, spoke on the importance of banking, informing the students of the many digital products UBA offers.

Mrs. Ketter said LEO is one of the many banking products being introduced by UBA, to encourage financial inclusion as part of the Central Bank of Liberia’s vision.

David Ojo, UBA Head of Digital Banking Sales, who made a step by step description about how to access the product, further give some statistics which according to him, birth the idea of the digital product.

He said, there are 2.2 million active users monthly on social media; Facebook, while 300,000 bots (an autonomous program on a network, especially the Internet, that can interact with computer systems or users) on Face Book.

He furthered that Facebook has 200 million subscribers in Africa, noting that 25,000 active Facebook subscribers are currently in Liberia.

“The idea of the Digital Product which started in 2017, is finally being introduced in Liberia” Ojo said, concluding his presentation.

To access the Artificial Intelligence LEO, existing and new customers should type UBA Chat Banking on Facebook Messenger, or send a WhatsApp Chat to +231777684919 and begin chatting.

The Central Bank of Liberia Assistant Director for IT and Cyber Security Regulation and Supervision Diakae Al Lewis, Sr., lauded UBA Liberia team for its innovative posture of bringing modern banking Liberia.

Oct 18, 2019

A corporate narrative on the Nigerian government’s decision to shut down its borders with illustrations on how this affects every spoon of rice residents in Nigeria eat, and details of its linear implications on neighbouring economies like Ghana, Benin, Togo among others.

Barely 8 days to the August 2019 Tokyo International Conference on African Development (TICAD), a revered African administrator seemed grossly irritated by various alleged illegal activities perpetrated along its country’s borders.

In response to this national buff, the administrator (remembering his military background) furiously ordered for the immediate closure of the borders, and administered (along its routes) heavy military surveillance troop to keep watch until further notice.

The administrator said it was a temporal development –that orders would be relaxed once measures are put in place to contain the situation. Off, in furry, he flew out to Pacifico Yokohama, the hosting Yokohama city in Japan to grace the conference where he would be meeting fellow administrators serving in his capacities in other countries.

On his way, he thought about a convincing explanation for his standing order –how to present it diplomatically without sounding harsh and hostile. Because the conference wasn’t staged purposely for this cause, he knew it won’t be a major deliberation, so, he made few jottings of his thoughts and moved on to rehearse other would-be key highlights of the 3-day meeting.

He was right. As soon as the conference commenced, he was quizzed on his decision. This time, a sensitive poser that (ordinarily) was sufficient to topple him met him readily confident. Without hesitation, he answered as collected as possible, noting that the borders have been a disaster through the years and long due for an urgent attention.

According to his sentiment, his administration would not blind his eyes to acknowledge that the porous borders have become an albatross to rapid economic viability. That, for as long as a solution to cub the menace would be developed; he was not going back on his orders –and that, if any time later, not just yet.

Throwback

Nigeria, being a major market determiner in Africa courtesy of its bursting population of about 200 million, had made tens of thousands of people multi-millionaires via their engagement in various trans-border trades and deals.

Not limited to the green-white-green nationalities, citizens of neighbouring countries had also been benefitting from this large market potential of the country. The Republic of Benin, for instance, had enjoyed from this perk given its relative position as it shares borders at various points with Africa’s richest oil country.

This relationship made Benin, a country with less than 15 million population a top importer of rice. And, economists began to wonder if there were ghost rice consumers in Benin.

Investigations later revealed that most of the rice imported to Benin from Thailand and India were only warehoused for storage and then allegedly pushed illegally across the borders into the waiting Nigerian marketing where over 150 million citizens are hungry.

As far away as Ghana is from Nigeria with Benin dividing the two West African countries, goods from Ghana also travelled through the route to connect with the “ever accommodative” Nigerian market.

While some (Nigerians and foreigners) were profiting from this venture, making millions on daily basis; Nigeria, as a country on the other hand, was increasingly denied of gains that ought to be accrued from tariffs on goods when imported legally.

August 2019

President Muhammadu Buhari, the framed administrator in the story, had learnt that the recession had forced locals back into farming. The result, according to his team of researchers and consultants, was that rice production was gaining figures and can now sustain local demands.

In their advice, it was no longer economical “wasting” scarce foreign reserves on the importation of goods available or produce-able within the country. To make matter worse, the officer in charge of the sea port lamented of losses on account of indiscriminate smuggling across the borders.

He explained that goods that should have been imported through the port where import duties would have been duly charged were increasingly being smuggled in through the porous borders, technically cutting down on the nation’s non-oil revenue.

The pronouncement  

So, during the TICAD function in August, the administrator was armed with enough information and anger.

“Now that our people in the rural areas are going back to their farms, and the country has saved huge sums of money which would otherwise have been expended on importing rice using our scarce foreign reserves, we cannot allow smuggling of the product at such alarming proportions to continue,” he blared.

What followed

Complaints from Nigerians

Shrinking foreign economies

Increased revenue through the port

Increased patronage of Made-in-Nigeria rice

Emergence of Made-in-Nigeria foreign rice

Revenue loss by some local manufacturers


Complaints from Nigerians

Aside the return of many to the farm, Nigerians in the first few weeks of the closure began to express displeasure as prices of goods (rice in particular rose). Foreign rice became scarce. Local rice, which no one patronized before, began to gain prominence as an alternative in the market.

Before long, seemingly short-charged importers began grunting but no one cared. Invariably, the administrator’s August order had just blocked an access to millions of naira for these businessmen.

Shrinking foreign economies

While the administrator and his policy team argued that the development will boost local production as over-dependant on importation will only further weaken the economy, countries like Benin and Ghana (in less than 60 days) were already feeling the bite on the lips of their economies.

Along the borders on the side of Benin, loads of tomatoes and other perishable goods were soon observed to be rotting. It was quite unfortunate because before the border closure this wouldn’t have happened. These goods would have, instead, been smuggled into the country without hitch.

Thing became so difficult that the experience of the economic down turn led Ghana to cry out to the mercy of the administrator. Reports revealed that Ghana, through its Foreign Minister and Regional Integration, Shirley Ayorkor Botchwey (on Tuesday, 15th of October), had voiced out, pleading that the ban be lifted so that “Ghana’s exports can enter” the Nigerian “market.”

Increased revenue through the port

Contrary to the general assumption, business did not stop as the sea ports and airports were not locked. In fact, business leaders and traders who could not stop their activities have moved on to access the Nigerian market through its ports. This, according to the administrator, was fine.

Following the trend of his administration, every discerning mind had already noticed he has only been particular on raising funds from different channels. Perhaps, what also led to the proposed increment in VAT from 5% to 7.5%.

So, with emerging reports from his officer in charge of the ports (Col Hameed Ali) disclosing that his agency currently generates over N5bn daily, the administrator seems more than excited. And, nothing (appeared) would be convincing for him to relax his verdict yet.

Increased patronage of Made-in-Nigeria rice

In the end, local farmers were one of the beneficiaries of the policy. The influx of Made-in-Nigeria rice became overwhelming. Analyzing the situation, the upward scale resulted on account of the scarce foreign rice in the market and its relative high cost (about N26, 000) where available.

This was how the local rice (as of October, 2019) continued to sell fast despite costing N17, 000 a bag. It was expected, however, as Nigerians with their cost-centric psychology would only have patronized the local option while trying to save cost. While this was going on, increased patronage was (in turn) boosting the income of local farmers.

Emergence of Made-in-Nigeria foreign rice

Unfortunately, however, greed soon found its way into hungry local businessmen as Made-in-Nigeria foreign rice began to emerge. Rice sellers, by the second week of October, were found stocking local rice in foreign bags to sell to unrepentant foreign rice consumers. This way, they started making about N10, 000 more from their local rice sales.

Although, measures (as at the 18th day of October) from the administrator were yet to be put in place to curb the corrupt practices –perhaps, a new rice reform policy would be signed so that those guilty would be sanctioned.

Revenue loss by some local manufacturers

Apart from the sacrifices of having to switch to local rice which is still struggling to taste as soft and as tasty as the foreign rice, some Nigerian manufacturing companies also suffered revenue drop in the process.

Fruit juice producing company, So Fresh, for instance, could no longer import some of its ingredients that were unavailable in Nigeria. Their likes have, since the border closure directives, been witnessing decline in its revenue.

While the administrator and team found a temporal victory in their efforts to stop smuggling that is equally helping them gain more revenue through due port uses, some local businesses paid heavily and painfully to see it come through.

Oct 17, 2019

The EU and Britain are close to working out an elusive Brexit deal late Wednesday, just in time to be submitted to a key European summit.

If a text emerges forming the basis of a legal treaty, Britain could be headed for a managed withdrawal from the European bloc it has been part of for nearly half a century.

Otherwise, the Brexit crisis that has sapped UK politics for the past three years could worsen, and British Prime Minister Boris Johnson could make good on a vow to take his country out of the EU without a deal in two weeks’ time.

“I’d like to believe a deal is being finalised,” French President Emmanuel Macron said alongside German Chancellor Angela Merkel in southern France as negotiators in Brussels worked frantically.

European sources warned it was not a done deal, with one stressing “talks continue” and another declaring: “There is still no white smoke.”

“We’re almost there,” the second one said, adding: “Everything is resolved except the application of VAT in Northern Ireland.”

There was pessimism a breakthrough would happen Wednesday night, with attention focused on a possible announcement early Thursday — immediately before the start of the EU summit.

Macron, Merkel and other European leaders at that gathering in Brussels aim to decide whether to give the go-ahead to officials to draw up a final withdrawal treaty with Britain.

“The basic foundations of an agreement are ready and in theory tomorrow (Thursday) we could accept this deal with Great Britain and avoid the chaos and the misfortune linked to an uncontrolled, chaotic exit,” Donald Tusk, president of the European Council, said on Poland’s TVN24 news.

Oct 17, 2019

Bearish sentiments on the Nigerian Stock Exchange (NSE) further depleted the market capitalisation to N12.89 trillion in Wednesday’s trading sessions. The NSE All Share Index closed at 26,472.20, shedding 0.16%. Year to date the make is down 15.78%.

Top 5 gainers

Law Union and Rock Insurance led the top 5 gainers with a 9.09% gain to close at N0.48. Livestock Feeds followed with a 6.38% gain to close at N0.50.

Cornerstone Insurance gained 5% to close at N0.37. The stock has maintained gains since the first trading day of the week.

Dangote Flour Mills (one of the stocks on our watchlist) gained 3.34% to close at N23.20. Africa Prudential rounds up the top 5 gainers with a 2.56% gain to close at N4.

Top 5 losers

On the losing side, Wapic Insurance was hit with the biggest loss of 8.57% to close at N0.32. Chams followed with 8.57%, closing at N0.22. Sterling Bank had a 7.69% loss to close at N1.80.

Lafarge Africa closed at N15.35, losing 4.06%. Ecobank rounds up the top 5 decliners with a 2.78% loss to close at N7.

Top 5 trades

Wednesday’s trading session recorded 138.5 million shares valued at N3.6 billion traded in 2,487. Access Bank topped the top 5 trades by volume with 20.7 million shares valued at N153.4 million traded in 151 deals. Global Spectrum Energy Services Plc still traded large today with 20 million shares valued at N94 million traded in 4 deals.

Zenith Bank traded 14.9 million shares valued at N266.4 million in 304 deals. 14.4 million Transcorp shares valued at N14.6 million were traded in 37 deals. FBN Holdings rounds up the top 5 trades by volume with 10.9 million shares valued at N58.3 million traded in 112 deals.

Oct 17, 2019

According to the Q3 2019 financial statement released by Guaranty Trust Bank (GTBank) for the period ended September 30, 2019, the bank posted a revenue of N224.2 billion, 5.6% less than N237.5 billion recorded in the same period of 2018.

The bank, however, recorded and increased profit before tax (PBT) of N170.7 billion as against N164.1 billion in 2018. This represent a 3.9% increase in PBT.

The bank also made a profit after tax (PAT) of N146.99 billion as against N142.2 billion, representing a 3.4% increase.

GTBank made N48.4 billion from fees and commissions, compared to N40.3 billion in 2018. This suggests that fee and commission income increased by 19.9%.

The bank incurred N27.3 billion paying salaries and other allowances. This is 2.9% less than the amount spent in 2018.

GTBank gained 1.31%, closing at N27 from trading session on the floor of the Nigerian Stock Exchange (NSE).

Oct 17, 2019

What we eat is changing on a global scale. Changes in the types of food that are available and affordable, where we buy food and how we prepare it carry significant consequences for nutrition and health.

Until the 20th century, the key nutritional issue was that people could not afford sufficient food or the necessary nutrients. But nowadays, the single most important issue is the co-existence of undernutrition – lack of access to sufficient quantities of food – and overnutrition – excessive consumption of food.

Across the world, calorie intake is on the rise and so is consumption of vegetable oils, meats and ultra-processed foods. Overall, imbalanced diets and multiple, at times opposite, nutritional problems are at the core of today’s public health challenges. Middle-income countries like Ghana embody this ambivalence. They show the highest increased consumption of unhealthy foods, but also improvements in consumption of healthy foods.

The shifts in diet and lifestyle are undeniable. But a key question remains unanswered: how does the globalisation of food systems affect different groups? Given the multiple burdens of malnutrition, it is important to understand who is more likely to suffer from undernutrition or from obesity.

To address this question, we did research that combined a detailed investigation of diets with the analysis of food systems. The aim of our study of food consumption among school children in Accra was to understand diets and contextualise them in social and economic living conditions within the urban food landscapes.

We explored food consumption among school children from different socio-economic backgrounds in Accra. We carried out a student survey in five junior high schools in the Accra Metropolitan Area. We did qualitative interviews with schoolchildren, representatives of the food industry and public officials.

Our findings reveal that inequality and dietary change frame today’s urban food question in Accra. Socio-economic status is a critical dimension of diets, with poorer children more vulnerable to food insecurity and fewer food choices.

But the consumption of packaged and processed foods, often sugar-rich and nutrient-poor, cuts across wealth groups.

Ensuring that urban populations have access to affordable food, a long-standing goal of agricultural and food policy, is essential but no longer sufficient. Quality matters too. Understanding how unhealthy diets take root requires exploring the role of the food industry in making cheap, enticing and unhealthy food options available to urban residents.

The background

Urban diets are changing, as agricultural and food systems have become globalised and created new forms of food production, distribution, and trade. The nutritional implications for the Global South are seen in rising obesity and non-communicable diseases alongside persisting food insecurity and old-fashioned food policies.

Understanding how patterns of globalisation affect the welfare of populations is a key development question. But we don’t know very much about the way that the globalisation of food and agriculture systems affects different individuals or groups.

Research suggests that dietary change will be experienced differently by rich and poor, and by urban and rural populations.

In Ghana, national statistics suggest that there is a story of dietary change with remarkable reduction, but not elimination, of hunger and under-nutrition. Alongside this there’s rising overweight and obesity, particularly in urban areas, among wealthier people and women.

Ghana is self-sufficient in the production of maize, cassava and yam but is reliant on imports of rice, wheat and meat. Diets are becoming less reliant on cereals and imports of dairy products, poultry and sugar have been on an upward trend since the mid-1990s.

This may indicate that diets are becoming more diverse. But estimates of imports don’t allow us to rule out concerns about the deterioration of diets. Ghana is one of the fastest-growing markets for packaged foods and snacks, in particular. Crucially, we need to consider these changes in food production and trade in the context of rising inequality in the country.

What we found

Official statistics tend to portray socio-economic and nutrition inequality as reflecting urban-rural divides. But our study sheds light on the significance of food inequality within an urban area.

Through the daily lives of schoolchildren, we found that that children have access to different types of food depending on where they live and which school they go to.

Some schools have a canteen and others do not; children whose schools don’t have a canteen rely on food street vendors to meet their food needs during the day.

As expected, our results show that children from poorer socio-economic backgrounds are more vulnerable to food insecurity, lower dietary diversity and poor food consumption. Food insecurity, far from being a rural problem, concerns the urban poor too. Low or irregular access to money, most likely linked to low and fluctuating household incomes, poses a major obstacle to the ability of children to buy the food they need during the school day.

A group of children in the sample have their first meal at the first or second break at school. These are children from poorer backgrounds, a finding that suggests that low or irregular incomes determine the number of meals children can have.

Though it is clear that urban food inequality is driven by wealth, the dynamics are complex. Take the consumption of packaged and processed foods. These foods don’t only feature in the diets of the wealthier groups but cut across wealth groups and peak for those in the middle. They are desirable, accessible and relatively affordable.

The food industry makes effective use of informal distribution channels, making packaged foods widely available in the markets, on the streets and, particularly, in the proximity of schools.

What needs to be done

Informal distribution is an important aspect of the urban food landscape. Knowing which foods are healthy or unhealthy does not stop children from consuming foods that are enticing and affordable.

It’s therefore essential to consider the food industry’s role when it comes to food environments that offer unhealthy, cheap and enticing options.The Conversation

 

Sara Stevano, Research Associate, International Political Economy, King's College London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Oct 16, 2019

Uber contract drivers helped bring in more than three-quarters of the company’s revenue in this year’s first six months. But as Uber would have it, the drivers aren’t essential.

Uber raised eyebrows last month when its chief lawyer asserted that “drivers’ work is outside the usual course of Uber’s business” in a call laying out the company’s resistance to a California bill that would alter the employment status of many “gig” workers. It is a legal strategy the Silicon Valley company has been honing for years that helps it avoid responsibility for the actions of its drivers.

Documents and a 2017 deposition related to an Atlanta civil suit, Jessicka Harris v. Uber, viewed by The Washington Post offer a rare glimpse at Uber’s strategies for using drivers’ status as independent contractors as a legal shield. Asked in a document to “admit or deny that Uber is in the business of providing transportation,” the ride-hailing company’s attorneys are steadfast: “denied.”

Over the course of a nearly three-hour deposition in the Harris case, Uber executive Nicholas Valentino, then an operations manager for Atlanta, repeatedly corrected the plaintiff’s attorney when he referred to the contractors as “drivers.”

“They are not Uber drivers,” Valentino said. “They’re independent, third-party transportation providers.” He repeated the claim no fewer than 16 times, to the attorney’s apparent consternation.

“If you are going to keep saying they are not drivers, we are just going to be fussing about that all afternoon,” said the attorney, Michael Todd Wheeles.

“That’s okay,” Valentino said.

Uber faces many lawsuits, over issues ranging from fender benders to wage disputes to more-serious incidents. Harris sued Uber and driver Robert Ferguson, alleging that she nearly lost her leg after being struck by Ferguson, who she claimed veered off the road.

At stake for Uber in its many court battles is the potential for millions in new liabilities if its contract drivers are reclassified as employees, and the company is found to bear greater responsibility for their actions.

Many companies rely on contractors and gig workers. But what sets Uber and other ride-hailing companies apart is that its customers spend much more time with the drivers, en route to their destination, compared with, say, food-delivery or dog-walking services. The ratio of contractors to direct employees is high: While Uber has roughly 4 million drivers, the company has 27,000 employees.

In public statements, Uber takes pains to show its collaborative relationship with drivers. Chief executive Dara Khosrowshahi refers to them as “driver partners,” noting in an interview last October that “if you’re going to call your drivers partners, then treat them like partners.” Uber declared 2017 “the year of the driver” before it was embroiled in a series of corporate scandals. The company offered some drivers the chance to buy stock when it went public in May, and it hosts regular forums where drivers can give feedback to executives.

“Drivers are independent contractors,” Uber spokesman Noah Edwardsen said in a statement. “But that has never stopped us from making significant investments in safety. Safety will always be a long-term commitment for Uber and we will continue working to raise the bar to help protect everyone who uses our platform.”

Gig workers earn money by performing tasks such as delivering groceries, ferrying passengers or fetching prepared food — tasks generally arranged by customers through mobile apps. Because they are not full-time employees, they can log in to the app whenever they wish to work, but they also have to pay for things such as fuel and health insurance themselves.

A measure in Uber’s home state that could require it to reclassify drivers as employees, with benefits such as paid sick leave, could also open the company up to new liabilities, according to critics. Uber has pushed back against the measure — set to take effect in January — citing what it says may be the impact to drivers’ flexible work schedule.

“Liability is one of the big unspoken-about issues here,” said Lorena Gonzalez (D), a California state assemblywoman who crafted the bill, known as AB5, that would make many gig workers employees. “We want to ensure there’s responsibility at the end of the day and that they are not just passing that along to someone else."

Edwardsen said that “liability for safety incidents has simply never been part of [Uber’s] arguments or strategy around AB5” and that “suggesting otherwise is wrong.”

Uber declined to comment on the Harris case, which it settled out of court, or any other litigation. Attorneys for Harris also declined to comment, as did the driver’s attorneys. Valentino, the Uber executive who was deposed in the case, declined through an Uber spokesman to be interviewed. Harris and Ferguson did not respond to requests for comment.

Uber drivers’ employment status has been challenged in multiple lawsuits, but Uber has avoided having to broadly recognize its gig workers as employees. Uber tends to favor settling individual cases out of court rather than letting them go to trial, say attorneys who have brought suits against the company.

In materials related to the Harris case, sealed after the matter was privately settled, Uber attorneys and executives contend that the company is nothing more than a marketplace that happens to be used for arranging transportation. And its chief legal officer, Tony West, said last month that Uber’s business is “serving as a technology platform for several different types of digital marketplaces.”

But the company is more involved than many online marketplaces, such as e-commerce sites, including providing driving directions to drivers, setting fare rates and mandating punctuality and car type, among other criteria.

The distinction in the Harris case — and many others like it — is crucial for Uber. The company argues that because they are contractors, drivers and their behavior ultimately are not its responsibility.

It has made similar arguments in other lawsuits. In a case in San Francisco alleging an Uber driver made sexual comments to a 16-year-old passenger, settled in December, Uber’s attorneys said that “the partner driver was an independent contractor responsible for his own means and methods” and that Uber is “a technology company, not a transportation company."

In a case underway in Walton County, Fla., where a driver purportedly drove a passenger to his home and raped her, Uber asserts that the driver “was at all times … an independent, third-party transportation provider” and that Uber “does not and did not employ” the driver and “never had an agency, employment, partnership, joint venture or joint enterprise relationship with him.”

Courts have generally sided with Uber and other companies reliant on gig workers that have made similar arguments.

The Post reported last month that Uber’s Special Investigations Unit, which it turns to when trips go awry, is designed primarily to shelter the company from legal responsibility and quietly resolve serious allegations to avoid press or regulatory scrutiny. Uber has contested that, saying the unit’s role is to “provide specialized customer support to riders and drivers dealing with very serious real-life situations.”

Online marketplaces such as Uber and Lyft, e-commerce companies, food delivery companies and lodging providers have successfully argued that as middlemen they should not be held responsible for the goods and services they help arrange. And courts have generally sided with them, citing Section 230 of the Communications Decency Act, which shields sites from legal liability for user content by treating them as distributors rather than publishers.

Gonzalez, in an interview, said she is also considering a handful of new bills for the next legislative session that would address various aspects of the gig economy, including insurance considerations.

Seattle University law professor Charlotte Garden, who has studied gig-economy labor, said the California measure could be copied in other states, increasing potential costs to Uber. She said that may require Uber to find new ways to describe its business.

“It’s part of Uber’s playbook to use colorful language to obscure the true nature of their business,” Garden said.

In the Harris case, Uber’s Valentino was asked whether he knew how many drivers Uber had in the state of Georgia. “Zero would be how many Uber drivers, because that’s not what they are,” he said. “But, if you are asking about independent third-party transportation providers — not trying to be difficult — I would say, no, I don’t know the answer.”

“Isn’t it true that Uber drivers like Mr. Ferguson are commanded to transport the Uber customer directly to their specified destination?” asked Wheeles, the attorney, with the firm Morris Haynes in Birmingham, Ala.

“He is not an Uber driver,” Valentino said. “Independent third-party transportation provider.”

 

Source: The Washington Post

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