After drivers revolt, Lyft apologizes and extends $1000 promo

After incurring the wrath of its driver community, Lyft has changed how it’s handling the promised $1,000 bonuses to new drivers. Since the company failed to process some applications in time, it’s extending the paperwork processing deadline until March 13th so people aren’t shut out from their reward.

In case you missed the controversy, here’s what happened. In Lyft’s ongoing war with Uber over driver supply, it offered people a big check if they signed up to drive and did one ride by March 5th. As you’d expect, the company was overwhelmed with applicants. It told drivers that even if they had applied by the deadline, they wouldn’t receive their bonuses if their background checks weren’t processed in time to give a ride.

That wasn’t in drivers’ control, and people rose up in anger. They felt swindled by Lyft, as though the company had hoodwinked them into applying without ever intending to grant all the bonuses. 376 drivers signed a petition asking Lyft to reverse the decision. A reddit thread claims that a law firm is considering representing a class action suit against Lyft regarding the matter. I’ve reached out to the firm to fact check and will update this if I hear back.

Frankly, I was surprised when Lyft drivers told me about the promo bait-and-switch. Lyft has always been the driver-friendly entity of the two ridesharing behemoths, and people who choose Lyft over Uber say it’s because they’ve had better interactions with the company. This conflict threatened to hurt that brand.

Lyft heard the criticism loud and clear, and co-founder John Zimmer issued a public apology when he extended the promotion deadline. “Lyft learned a lesson this week, and we’re sorry for the frustration it caused the community,” Zimmer said. “Thanks to those who gave us productive feedback on how to improve, and for holding us to a higher standard.”

Uber enters the media game with a magazine for its drivers

Uber will be publishing a quarterly magazine for its drivers in six of its markets — New York City, Ohio, Boston, Oklahoma, Chicago and San Francisco. You can see the digital version here.

According to Business Insider which reported the news first, the print version of the magazine will have articles on best driving practices and tips, like where to use the restroom when you’re on driving duty and how to work out in the car. It will also have its share of pro-Uber propaganda, like fluffy interviews with drivers who love Uber. The magazine will provide Uber a direct line to its drivers, perhaps one they’re more likely to pay attention to than the emails sent from the company.

After this story published, Uber confirmed the news and told me this issue took the company five months to put together. A range of people were consulted for it like drivers, managers of various markets, and those at Uber’s SF home base.

The magazine will be named Momentum, after Uber’s driver rewards program which launched last November to tackle a range of issues. It helps its drivers, which are independent contractors, find personal health insurance, for one thing. It also offers nationwide discounts with wireless carriers and at mechanics’ shops like AutoZone and JiffyLube.

Could a magazine for riders come next? It’s not hard to imagine a world where you clamber into the backseat of the car and entertain yourself on the ride with the magazine in the seat back pocket. But beige, dishwater-y airline publication SkyMall recently declared bankruptcy, suggesting that transportation magazines are a tough business in an era of mobile connectivity.

Uber just cut prices in 48 markets

This hasn’t happened in awhile. Uber just slashed its cost in 48 of its U.S. markets. The last time it started giving such big discounts was half a year ago, at the start of summer.

The discounts will apply to the newer cities that didn’t seen the boon of the first round of cuts (sorry, San Francisco – you’re already a beneficiary). Miami, Tucson, Baltimore, Dallas and many other places are the new recipients. The percentage of the price cut varies depending on market.

This time, Uber is so confident that the cuts will result in more rides taken, and therefore more money for drivers, that it’s guaranteeing driver earnings.

Here’s how: It analyzed company data to determine average driver earnings in each city during slow, normal and busy times of the day (pre–price cuts). That number varies across the country, as you might imagine. If a driver makes its app available, accepts at least one trip, and has an acceptance rate of 90 percent while its app is on, then Uber says it will automatically give the driver the average hourly rate in wages if they don’t automatically earn it.

It’s telling its drivers in each market what that fare is, so the drivers themselves can track whether Uber is carrying through on its promise.

The reason Uber feels comfortable taking that financial risk is because it has the data from its more mature markets to support its theory. It cut prices in other cities over summer and never had to return them to pre-cut levels, because the number of rides people took increased. “This is really a move to replicate the success we’ve seen in other markets,” Andrew Macdonald, Uber’s regional manager for central parts of the U.S. and Canada, told me.

He explained that although cities may have cultural and transportation infrastructure differences, Uber still believes it can make more money and drive usage by lowering fares in all types of locations, from more rural to urban. “What you see as a city develops is that as Uber expands its presence and the system becomes more efficient, people rely on the system more,” Macdonald said. “People start to ditch their cars. That’s a common thread you see across markets.”

In its blog post announcing the changes, Uber pointed to Chicago as one such example. Drivers’ average hourly wages increased from $19.10 an hour to $21.34 an hour from December 2013 to December 2014, despite the fact that the company rolled out permanent price cuts for passengers during that time.

According to Uber, price cuts in Chicago led to increased driver earnings per hour

According to Uber, price cuts in Chicago led to increased driver earnings per hour.

Here’s the problem with the way Uber vets drivers

After Uber was sued by San Francisco and Los Angeles Tuesday, there was a fair amount of confusion over the nature of background checks, one of the key factors the district attorneys cited in filing the suit. The questions immediately flooded my Twitter feed, such as: What’s the problem? How do Uber’s checks differ from taxi companies? Why do the DAs care?

A year ago, I learned more than I ever wanted to about background checks, following a big investigation into Uber’s practices. So I drafted a primer to get you up to speed on one of the key issues in the dispute between Uber and local governments.

Why are San Francisco and Los Angeles unhappy with Uber’s background checks?

They’re not unhappy with Uber’s background checks themselves — they’re upset at the way Uber markets them to customers. Uber has said it has the “safest rides on the road” and charges a $1 Safe Rides fee to fund its checks. But in actuality, Uber’s background checks, conducted through a company called Hirease, are arguably not as thorough as the one taxis do in California.

Wait — what? Aren’t all background checks the same?

Background checks come in all shapes and sizes. You can pay a private investigator more than $1,000 to dig into every aspect of a person’s life. You could drop $15 on a dirt-cheap consumer agency that gathers their records from the internet. Or you could spend $60-$90 on Live Scans, which go through official Department of Justice and FBI databases.

This Live Scan thing sounds good. What’s that?

It’s the only way to comb official federal, state, and county records. Live Scans use candidates’ fingerprints and update after the fact, so if someone commits a crime in the months or years after they’ve been hired, their employer will be notified. Live Scans are the standard for teachers, medics, and other professionals who work with vulnerable populations.

In California’s major metropolitan cities, taxi companies are legally required to Live Scan all drivers. Transportation is regulated by different entities depending on the state, so taxis in other places have different background check standards. In some places, Uber does a more thorough background check than taxis, but not in California.

I’m confused. If taxi companies legally have to do Live Scans in California, why doesn’t Uber?

When ridesharing was legalized in California, it was put under the jurisdiction of the California Public Utilities Commission (CPUC), which regulates certain transportation options like limousine services and trains. In California different entities — the municipal transportation authorities, like the SFMTA — regulate taxis. The CPUC decided that ridesharing companies would be held to less strict standards for background checks than taxi companies.

What does Uber use instead?

Uber uses a private background check company called Hirease. Without fingerprints, Hirease runs drivers’ social security numbers through the type of records databases held by credit agencies. There are some big limitations to this. Sometimes they’re outdated or incomplete, since they aren’t accessing official government databases. The records can come from dubious sources, like Internet crawls. Such credit checks can legally only go back seven years in a person’s history (whereas Live Scans don’t have a time limit). And if a driver commits a crime after Hirease runs its initial background check, Uber won’t know.

Uber told me it does occasionally re-run its driver background checks to deal with this issue. Uber is on track to complete more than 2 million background checks in 2014, so that’s no small feat.

If Live Scans are best in class, why doesn’t Uber use them?

Uber argues, and rightly so, that the DOJ and FBI databases are flawed. Counties don’t always regularly report their records to the state, so information gets outdated. Hirease sends runners in person to pull court records of each Uber applicant in the counties they’ve lived in. That might be a better system, although it has some obvious weaknesses (what if someone commits a crime in a county they weren’t a resident of?).

Still, Live Scans are the industry standard for employees in sensitive job roles, and if Uber wants to be “industry leading,” it should be doing them. If it ran Live Scans in addition to working with Hirease, it really would be best in class.

Are there other reasons Uber doesn’t do Live Scans?

I have a few theories:

  1. Price — Live Scans are more expensive than run-of-the-mill checks. This is the most unlikely answer given Uber’s war chest of venture capital, but it’s possible the company has future expenditure concerns in mind.
  2. Growth — Live Scans would slow down Uber’s scaling process, because every potential driver would have to get fingerprinted in person.
  3. Driver pool — Uber doesn’t want to run the risk of shrinking its potential driver pool by doing a more thorough background check.
  4. Legality — It’s possible Uber isn’t allowed to do Live Scans. Because such official searches access privileged criminal information, companies must apply to Live Scan their employees. If Uber has applied and been rejected, however, they haven’t told me.

Is there anything that makes Uber “safer than a taxi?”

Yes. Uber has stricter standards for its drivers than some taxi companies. For example, in San Francisco taxi drivers with a DUI on their records are still allowed to work, whereas Uber doesn’t accept anyone with a DUI.

Secondly, since Uber tracks its passenger and driver interactions, it has a history that can be useful in prosecuting assaults or other issues. Since taxis don’t have that digital footprint, if your driver attacks you, you won’t necessarily have the information to track them down.

The Uber driver in India who allegedly raped a passenger had a record. How does Uber do background checks abroad?

It varies from country to country. Every place has different laws for background check procedures and different ways of storing records. Live Scans only apply to the US Department of Justice and FBI systems. In the case of India, as some have pointed out, clean records are easy to forge. That makes doing comprehensive background checks challenging for any company, not just Uber.

What background checks do Lyft and Sidecar do?

Uber’s competitors also don’t do Live Scans. They work with different private agencies  similar to Hirease. But the DAs didn’t have a problem with Lyft because Lyft said it would change the description of its background checks. The DAs are still in legal negotiations with Sidecar over the issue.

Will Uber have to change its background checks now that it’s being sued?

Nope. The DAs are respecting the CPUC’s authority over this issue. But the DAs want Uber to stop marketing its driver vetting processes as the holy grail.

Perhaps down the line Uber will use some of its recently raised $1 billion war chest to make sure its background checks really are the best around.

Lyft distances itself from the fist bump

In an email sent to customers this morning, the ridesharing company addressed two of Lyft’s most infamous quirks: The fist bump and front-seat ride.

Magic Mouse Drivers for Windows Magically Appear

Apple (s aapl) unveiled its Mighty Mouse replacement, the Magic Mouse, last month alongside new versions of the iMac, Mac mini and entry-level Macbook. The mouse was well-received, perhaps due in part to the disappointment most felt about its predecessor. Better tracking and touch gestures combined to deliver a much better experience overall.

But only for Mac users, since unlike the Mighty Mouse before it, the Magic Mouse didn’t ship with any Windows support, so brand traitors were simply out of luck. Now, a Windows driver for the Magic Mouse has surfaced, so the PC faithful can see what all the buzz is about. Read More about Magic Mouse Drivers for Windows Magically Appear

MSi Wind Gets More OS X-Friendly, Calls Apple Out

We know that you don’t want to release a netbook, Mr. Jobs, and we respect your stance that you don’t want to sacrifice quality and besmirch the Apple name with a sub-standard product. That said, it’s beginning to look like other companies may not be content to sit by and wait while you come up with an ingenious way of revolutionizing cheapo laptop construction, making it affordable and of high enough quality to bear the Apple logo. One such company is Realtek, who’ve recently released OS X drivers for their Wi-Fi network cards, which reside not, where you might guess, in Apple laptops, but in the MSi Wind.
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