Airbnb ups its debt by $1BN amid the coronavirus travel crunch

Airbnb has secured commitments of $1 billion for a syndicated term loan from institutional investors, it said.

The emergency cash injection comes as the coronavirus travel freeze continues to hammer vacation rentals, with holidaymakers locked down at home and global travel banned or heavily discouraged for public health reasons.

Neither the names of the parties to the Airbnb loan nor the terms have been disclosed but Reuters — citing several sources with knowledge of the matter — is reporting that private equity firms Silver Lake, Apollo Global Management, Sixth Street Partners, Oaktree Capital Management and Owl Rock are parties, with Silver Lake reportedly “one of the biggest players”. Though all the firms declined to comment.

Per Reuters’ sources, the loan is for five years — with an interest rate of 750 basis points over the Libor benchmark. The news agency was also told it was sold at a slight discount to the loan’s par value which would see investors earn a rate of around 12%. While the terms of the deal are first lien debt, meaning the listed creditors would be paid first if Airbnb were to default, per Reuters’ sources.

We’ve reached out to Airbnb for comment.

Earlier this month the vacation rentals giant announced an additional $1BN raise in debt and equity from two of the aforementioned private equity firms, Silver Lake and Sixth Street Partners. Though at the time it said the funds would support its ongoing work to invest over the long term — couching the raise as strategic, rather than a bailout in troubled times.

The $1BN term loan looks more clearly targeted at dealing with immediate negative impacts caused by COVID-19. Although, once again, Airbnb’s statement seeks to paint an upbeat picture of travel in a post-pandemic future, without the company being able to specify exactly when such a time might arrive.

“I deeply appreciate the confidence and trust that so many have shown in our company even as every sector in travel is going through the storm of the pandemic. We know travel will return and rather than merely hunkering down, the support we have received will allow Airbnb to continue moving forward as we invest in our community,” said Airbnb co-founder and CEO, Brian Chesky, in a statement. “All of the actions we have taken over the last several weeks assure that Airbnb will emerge from the storm of the pandemic even stronger, regardless of how long the storm lasts.”

The cash injection will “ensure Airbnb can continue to invest in its company and community of hosts and guests in over 220 countries and regions around the world”, the company added.

In recent weeks Airbnb has faced anger from hosts faced with a wave of coronavirus cancelations and refunds, after it made a policy change last month to allow guests to be refunded in full for bookings over the coronavirus period. It later earmarked $250M to help hosts impacted by COVID-19 cancellations.

Some countries have also banned holiday rentals entirely during the pandemic — including the UK which recently clamped down after hosts had been found advertising ‘isolation retreats’.

There have also been reports of an increase in long term rental properties in some markets, such as London, as professional landlords operating on platforms like Airbnb look for an alternative revenue stream for empty vacation rentals that are now costing them money.

Should such switching take hold in markets where residential tenancy contracts can stretch for five or more years it could put a lasting lock-up on a chunk of properties which vacation rental platforms have been repurposing as moneyspinners up til now.

One thing is clear: The global travel crunch has put a major dent in Airbnb’s IPO hopes. Last September, the company told investors, employees, and the world it would begin to trade publicly in 2020. A couple of months late the coronavirus struck and Airbnb has seen its valuation crash vs a $35BN peak, back in 2019.

Per Reuters, last week’s $1BN bond deal included warrants for the two firms that can be exercised at an $18BN valuation — well below even the $26BN Airbnb cited as an internal valuation in early March.

In the wake of COVID-19, UK puts up £20M in grants to develop resilience tech for critical industries

Most of the world — despite the canaries in the coal mine — was unprepared to cope with the coronavirus outbreak that’s now besieging us. Now, work is starting to get underway both to help manage what is going on now and better prepare us in the future. In the latest development, the UK government today announced that it will issue £20 million ($24.5 million) in grants of up to £50,000 each to startups and other businesses that are developing tools to improve resilience for critical industries — in other words, those that need to keep moving when something cataclysmic like a pandemic hits.

You can start your application here. Unlike a lot of other government efforts, this one is aimed at a quick start: you need to be ready to kick of your project using the grant no later than June 2020, but earlier is okay, too.

Awarded through Innovate UK, which part of UK Research and Innovation (itself a division of the Department of Business, Energy and Industrial Strategy), the grants will be available to businesses of any size as long as they are UK-registered, and aim to cover a wide swathe of industries that form the core fabric of how society and the economy can continue to operate.

“The Covid-19 situation is not just a health emergency, but also one that effects the economy and society. With that in mind, Innovate UK has launched this rapid response competition today seeking smart ideas from innovators,” said Dr Ian Campbell Executive Chair, Innovate UK, in a statement. “These could be proposals to help the distribution of goods, educate children remotely, keep families digitally connected and even new ideas to stream music and entertainment. The UK needs a great national effort and Innovate UK is helping by unleashing the power of innovation for people and businesses in need.”

These include not just what are typically considered “critical” industries like healthcare and food production and distribution, but also those that are less tangible but equally important in keeping society running smoothly, like entertainment and wellbeing services:

  • community support services
  • couriers and delivery (rural and/or city based)
  • education and culture
  • entertainment (live entertainment, music, etc.)
  • financial services
  • food manufacture and processing
  • healthcare
  • hospitality
  • personal protection equipment
  • remote working
  • retail
  • social care
  • sport and recreation
  • transport
  • wellbeing

The idea is to introduce new technologies and processes that will support existing businesses and organizations, not use the funding to build new startups from scratch. Those getting the funding could already be businesses in these categories, or building tools to help companies that fall under these themes.

The grants were announced at a time where we are seeing a huge surge of companies step up to the challenge of helping communities and countries cope with COVID-19. That’s included not only those that already made medical supplies increase production, but a number of other businesses step in and try to help where they can, or recalibrate what they normally do to make their factories or other assets more useful. (For example, in the UK, Rolls Royce, Airbus and the Formula 1 team are all working on ventilators and other hospital equipment, a model of industry retooling that has been seen in many other countries, too.)

That trend is what helped to inspire this newest wave of non-equity grants.

“The response of researchers and businesses to the coronavirus outbreak have been remarkable,” said Science Minister Amanda Solloway in a statement. “This new investment will support the development of technologies that can help industries, communities and individuals adapt to new ways of working when situations like this, and other incidents, arise.”

The remit here is intentionally open-ended but will likely be shaped by some of the shortcomings and cracks that have been appearing in recent weeks while systems get severely stress-tested.

So, unsurprisingly, the sample innovations that UK Innovate cites appear to directly relate to that. They include things like technology to help respond to spikes in online consumer demand — every grocery service in the online and physical world has been overwhelmed by customer traffic, leading to sites crashing, people leaving stores disappointed at what they cannot find, and general panic. Or services for families to connect with and remotely monitor vulnerable relatives: while Zoom and the rest have seen huge surges in traffic, there are still too many people on the other side of the digital divide who cannot access or use these. And better education tools: again, there are thousands of edtech companies in the world, but in the UK at least, I wouldn’t say that the educational authorities had done even a small degree of disaster planning, leaving individual schools to scramble and figure out ways to keep teaching remotely that works for everyone (again not always easy with digital divides, safeguarding and other issues).

None of this can cure coronavirus or stop another pandemic from happening — there are plenty of others that are working very squarely on that now, too — but these are equally critical to get right to make sure that a health disaster doesn’t extend into a more permanent economic or societal one.

More information and applications are here.

Uber Eats beefs up its grocery delivery offer as COVID-19 lockdowns continue

Uber Eats has beefed up grocery delivery options in three markets hard hit by the coronavirus.

Uber’s food delivery division said today it’s inked a partnership with supermarket giant Carrefour in France to provide Parisians with 30 minute home delivery on a range of grocery products, including everyday foods, toiletries and cleaning products.

The service is starting with 15 stores in the city, with Uber Eats saying it plans to scale it out rapidly nationwide “in the coming weeks”.

In Spain it’s partnered with the Galp service station brand to offer a grocery delivery service that consists of basic foods, over the counter medicines, beverages and cleaning products in 15 cities across the following 8 provinces: Badajoz, Barcelona, Cádiz, Córdoba, Madrid, Málaga, Palma de Mallorca and Valencia.

Uber Eats said there will be an initial 25 Galp convenience stores participating. The service will not only be offered via the Uber Eats app but also by phone for those without access to a smartphone or Internet.

The third market it’s inked deals in is Brazil, where Uber said it’s partnering with a range of pharmacies, convenience stores and pet shops in Sao Paulo to offer home delivery on basic supplies.

“Over the counter medicines will be available from the Pague Menos chain of pharmacies, grocery products from Shell Select convenience stores and pet supplies from Cobasi — one of the largest pet shop chains in the country,” it said. “The new services will be available on the Uber Eats app, with plans to launch in other Brazil states and cities in the coming weeks.”

The grocery tie-ups are not Uber Eats’ first such deals. The company had already inked partnerships with a supermarket in Australia (Coles) and the Costcutter brand in the UK, where around 600 independent convenience stores are offered via its app.

Uber Eats also lets independent convenience stores in countries around the world self listed on its app. However the latest tie-ups put more branded meat on the bone of its grocery offer in Europe and LatAm — with the Carrefour tie-up in France marking its first partnership with a major supermarket in Europe.

It’s worth noting Spain’s food delivery rival, Glovo, has an existing grocery-delivery partnership with the French supermarket giant in markets including its home country — which likely explains why Uber Eats has opted for a different partner in Spain.

Asked whether it’s looking to further expand grocery deliveries in other markets hit by the public health emergency Uber Eats told us it’s exploring opportunities to partner with more supermarkets, convenience stores and other retailers around the world.

As part of its response to the threat posed by the COVID-19 pandemic, the company has switched all deliveries to contactless by default — with orders left at the door or as instructed by a user.

It also told us it’s providing drivers and delivery people with access to hand sanitiser, gloves and disinfectant wipes, as soon as they become available. And said it’s dispensing guidance to users of its apps on hygiene best practice and limiting the spread of the virus.

Uber Eats has previously said it will provide 14 days of financial support for drivers and delivery people who get diagnosed with COVID-19 or are personally placed in quarantine by a public health authority due to their risk of spreading the virus, with the amount based on their average earnings over the last six months or less.

The policy is due for review on April 6.

Uber co-founder Garrett Camp steps back from board director role

Uber co-founder Garrett Camp is relinquishing his role as a board director and switching to board observer — where he says he’ll focus on product strategy for the ride hailing giant.

Camp made the announcement in a short Medium post in which he writes of his decade at Uber: “I’ve learned a lot, and realized that I’m most helpful when focused on product strategy & design, and this is where I’d like to focus going forward.”

“I will continue to work with Dara [Khosrowshahi, Uber CEO] and the product and technology leadership teams to brainstorm new ideas, iterate on plans and designs, and continue to innovate at scale,” he adds. “We have a strong and diverse team in place, and I’m confident everyone will navigate well during these turbulent times.”

The Canadian billionaire entrepreneur signs off by saying he’s looking forward to helping Uber “brainstorm the next big idea”.

Camp hasn’t been short of ideas over his career in tech. He’s the co-founder of the web 2.0 recommendation engine, StumbleUpon. He’s also founded a startup studio and incubator, Expa Studios and Expa Labs — which has spawned startups like Haus, which is pushing an alternative model for home ownership. More recently he’s been been building Eco: A crypto currency with an energy efficiency twist.

Uber’s other co-founder, Travis Kalanick, left the company board entirely at the end of last year — having been forced out of the CEO role in 2017 following a shareholder revolt by prominent investors at the height of controversy around Uber’s toxic workplace culture.

At the time, Camp said the culture controversy at Uber had left him “upset and deeply reflective“. And he backed replacing Kalanick as CEO — helping to bring in Khosrowshahi, who remains at Uber’s helm.

Ryan Graves — Uber’s first employee and first CEO — also left the board last year, shortly after the IPO.

We’ve reached out to Uber for comment on the latest board change.

Uber Eats UK waives fees during the coronavirus crisis

Uber Eats is waiving delivery and activations fees in the UK to support restaurants hit by decreasing demand during the coronavirus crisis.

The measure will apply until March 31 when it says it will review it.

On Monday the on-demand food delivery giant announced a similar waiver of delivery fees in the US.

The announcement by Uber Eats UK comes shortly after Just Eat UK said it would reduce its commission and waive some fees for 30 days — as part of an emergency support package for partner restaurants struggling to cope with disruption to their businesses.

“The high street is being hit hard by Coronavirus but the sector can play a critical role in helping the thousands of people who rely on it — for work and as an essential service — during this difficult time,” said Eats UK general manager, Toussaint Wattinne, in a statement.

“We are putting in place a range of initiatives to continue to support restaurant partners, particularly small business owners, as they keep their kitchens firing to feed people across the country.”

Another support measure it’s offering is a new opt-in program for all restaurants on its platform to get daily payments, rather than the standard weekly payment — to help with cash flow.

Today the UK government finally ordered bars and restaurants to close — having previously only advised citizens to stay away from social spaces to help reduce the spread of COVID-19.

Confirmed cases in the country have been increasing steady in recent weeks, approaching 4,000 at the time of writing, with 177 deaths recorded in total so far.

The closure order applies to bars and restaurants nationwide from tonight (Saturday morning) — cementing the economic shock the coronavirus is dealing to the sector.

However food delivery remains an option on the table: Earlier this week the government said it would relax planning regulations to allow pubs and restaurants to offer takeout services straightaway, without needing to apply for permission.

Uber Eats looks to be hoping to capitalize on the contingency provision by onboarding restaurants that haven’t previously offered takeout. It said today it’s adding a fast-tracked onboarding process for new restaurants to help them get online on its platform as soon as possible.

It’s also expanding the number of convenience stores available via the app — and waiving delivery fees for them too.

Keeping the nation fed through the crisis is another pressing operational headache for the UK government as worried shoppers have stripped supermarket shelves — putting strain on ‘just in time’ supply chains. Again, Uber looks to be hoping to help plug any gaps by expanding the surface area for food and grocery orders.

Also today it said it will be introducing a new contactless delivery product feature as a measure that’s intended to shrink the health risks for couriers making deliveries.

The public health crisis has shone a critical spotlight on the lack of protections for platform workers who aren’t covered by employment rights like sick pay — meaning they can either self isolate or earn money.

Several other European on-demand delivery apps have already added similar contactless provisions.

Deliveroo riders can’t access coronavirus hardship fund, warns union

UK on-demand food delivery startup Deliveroo has been accused of setting up an inaccessible hardship fund for couriers in the midst of the coronavirus crisis that leaves gig economy workers on its platform unable to access claimed financial support if they become ill or are self isolating.

Gig economy delivery workers are one of the groups who face increased exposure to the coronavirus on account of the work bringing them into contact with many people, even as demand for meal delivery is likely to increase with people being encouraged or required to stay at home.

At the same time gig workers don’t have standard benefits and protections afforded to people who are legally classed as workers — such as sick pay. So, as we reported earlier this week, the coronavirus crisis has shone a lurid spotlight on ‘sharing economy’ business models that offer little or no safety net for platform workers who fall ill or otherwise cannot work.

Some of these companies have responded by announcing support measures for the core workers they define as independent contractors — people who are now on the front line, delivering food to others who may not be able to leave their house and/or may be infected with the highly contagious virus.

In the majority of cases this sums to switching on a contactless delivery option in a bid to reduce human contact between couriers and customers. Although so far it tends to rely on the paying customer being proactive about locating and activating the feature.

A few — including Deliveroo, Glovo and Uber — have also offered some financial support to plug lost earnings for gig workers who can’t work because they’re infected with COVID-19 or have been placed in quarantine.

UK-based Deliveroo was fast out of the gate with an announcement of a “multi-million” pound hardship fund it said it would use to support gig workers who fell ill or needed to go into quarantine — claiming it would pay impacted riders in excess of the equivalent statutory sick pay for 14-days. (Meanwhile UK government support for gig workers needing to self-isolate during the coronavirus crisis has been limited to telling them to claim an unemployment benefit that can take weeks to come through and offers a very low level of earnings compensation; the government has so far rejected calls to extend sick pay to gig workers.)

When we asked about this last week Deliveroo stipulated the fund will only pay impacted riders who are diagnosed with coronavirus or told to isolate themselves by a medical authority.

It’s those conditions that a UK union is objecting to. Today the IWGB, a union that represents gig workers, accused Deliveroo of operating an unworkable fund — saying riders have told it they’re unable to access the claimed support because it requires a doctor’s note. (Including in cases where Deliveroo has deactivated a rider’s account because it suspects they have contracted COVID-19.) 

With many GPs surgeries in the UK switching to telephone-only triage as they scramble to cope with the coronavirus crisis, telling people who are sick with flu-like symptoms not to come to the surgery and instead self isolate to avoid the risk of spreading potential contagion — it’s unclear how couriers would be able to obtain the required documentation to access any financial help from the gig economy giant.

Access to coronavirus testing in the UK is also severely limited at this point of high demand.  

The union also points out that Deliveroo has provided no information on how much the hardship fund will pay out — even in cases where a rider has been able to procure a doctor’s note.

It’s called for Deliveroo to implement full sick pay without preconditions, as well as for a guaranteed floor in earnings for riders (of the living wage plus costs) to protect them through any periods of low demand during the public health crisis, as well as safety equipment (such as hand sanitizer and face masks); regular testing for COVID-19; and enhanced pay for those who do put themselves at risk by continuing to work.

Commenting in a statement, IWGB couriers and logistics branch chair Alex Marshall said: “Once we pull the curtains on Deliveroo’s announcement on assistance for workers that are sick or self-isolating, it is obvious that behind the PR spin it is more of the same old deceitful tactics. Deliveroo and other so-called gig economy employers have to stop blocking their workers’ access to these funds and immediately introduce full contractual sick pay, without pre-conditions. Increasingly, these workers are being expected to play a huge role in feeding people during this time of crisis, so it is time for their employers and the government to give them the basic rights we expect in any decent and just society.”

We reached out to Deliveroo for a response to the criticism of its requirement that riders produce a doctor’s note to access he hardship fund. We also asked whether it has paid anything out so far — and if so how much it’s paying individual riders. At the time of writing the company had not responded to our questions.

Last May the company closed a $575M Series G, with ecommerce giant Amazon leading a funding injection that brought its total investment raised to in excess of $1.5BN.

YC-backed Cleanly merges with NextCleaners to vertically integrate

Cleanly, the YC-backed company that looked to bring tech to the laundry industry, has today announced a merger with NextCleaners. The New York-based companies signed an all-stock deal after more than a year of negotiations, with Cleanly founder and CEO Tom Harari serving as Chairman of the Board and Next CEO Kam Saifi will stay in the Chief Executive role at the new company.

The new company will be called By Next. The terms of the deal were not disclosed.

Cleanly launched out of YC in 2015 with a plan to use data around delivery to optimize laundry pick-up and drop-off in a complicated market like New York. Using hyper specific local data, like if a building has a buzzer or a doorman, or if there’s parking on a certain street, Cleanly aimed to be able to deliver or pick-up laundry at almost anytime, on any day. That speed, and the user convenience it would provide, would allow for Cleanly to partner with third-party laundry services while capturing market share with users.

Over the next two years, the startup would deal with several challenges. The first was that the on-demand space cooled down considerably, with VCs focused on profitability. Indeed, the on-demand laundry space in the New York area has been hammered, with Washio closing down and FlyCleaners suffering through several obstacles over the past year, including shutting down its LIC plant and laying off more than 100 employees.

The second, more specific challenge, was that in the midst of that focus on economics, Cleanly realized it needed to boost gross margins, and that the best way to execute on that was to become vertically integrated. In essence, the company needed to stop using third-party laundry services and bring the actual laundry in house.

NextCleaners, focused primarily on dry cleaning with a small home cleaning business on the side, has been growing its footprint in the New York area with more than 15 retail stores. The company had also made an impression as one of the few eco-friendly dry cleaners in the market.

With the launch of the newly merged company, By Next, users will have options to book wash and fold, dry cleaning or home cleaning services with options for delivery or pick-up and drop-off in store.

AddVenture led Cleanly’s Series A and also participated in the merger through an investment in the new company. Other existing Cleanly investors include Initialized Capital, AltaIR, Millhouse Capital, Y Combinator, Ludlow Ventures, Haystack Ventures, and a bunch of angel investors including Paul Buchheit.

Airbnb and three other p2p rental platforms agree to share limited pan-EU data

The European Commission announced yesterday it’s reached a data-sharing agreement with vacation rental platforms Airbnb, Booking.com, Expedia Group and Tripadvisor — trumpeting the arrangement as a “landmark agreement” which will allow the EU’s statistical office to publish data on short-stay accommodations offered via these platforms across the bloc.

It said it wants to encourage “balanced” development of peer-to-peer rentals, noting concerns have been raised across the EU that such platforms are putting unsustainable pressure on local communities.

It expects Eurostat will be able to publish the first statistics in the second half of this year.

“Tourism is a key economic activity in Europe. Short-term accommodation rentals offer convenient solutions for tourists and new sources of revenue for people. At the same time, there are concerns about impact on local communities,” said Thierry Breton, the EU commissioner responsible for the internal market, in a statement.

“For the first time we are gaining reliable data that will inform our ongoing discussions with cities across Europe on how to address this new reality in a balanced manner. The Commission will continue to support the great opportunities of the collaborative economy, while helping local communities address the challenges posed by these rapid changes.”

Per the Commission’s press release, data that will be shared with Eurostat on an ongoing basis includes number of nights booked and number of guests, which will be aggregated at the level of “municipalities”.

“The data provided by the platforms will undergo statistical validation and be aggregated by Eurostat,” the Commission writes. “Eurostat will publish data for all Member States as well as many individual regions and cities by combining the information obtained from the platforms.”

We asked the Commission if any other data would be shared by the platforms — including aggregated information on the number of properties rented; and whether rentals are whole properties or rooms in a lived in property — but a Commission spokeswoman could not confirm any other data would be provided under the current arrangement.

She also told us that municipalities can be defined differently across the EU — so it may not always be the case that city-level data will be available to be published by Eurostat.

In recent years multiple cities in the EU — including Amsterdam, Barcelona, Berlin and Paris — have sought to put restrictions on Airbnb and similar platforms in order to limit their impact on residents and local communities, arguing short term rentals remove housing stock and drive up rental prices, hollowing out local communities, as well as creating other sorts of anti-social disruptions.

However a ruling in December by Europe’s top court — related to a legal challenge filed against Airbnb by a French tourism association — offered the opposite of relief for such cities, with judges finding Airbnb to be an online intermediation service, rather than an estate agent.

Under current EU law on Internet business, the CJEU ruling makes it harder for cities to apply tighter restrictions as such services remain regulated under existing ecommerce rules. Although the Commission has said it will introduce a Digital Services Act this year that’s slated to upgrade liability rules for platforms (and at least could rework aspects of the ecommerce directive to allow for tighter controls).

Last year, ahead of the CJEU’s ruling, ten EU cities penned an open letter warning that “a carte blanche for holiday rental platforms is not the solution” — calling for the Commission to introduce “strong legal obligations for platforms to cooperate with us in registration-schemes and in supplying rental-data per house that is advertised on their platforms”.

So it’s notable the Commission’s initial data-sharing arrangement with the four platforms does not include any information about the number or properties being rented, nor the proportion which are whole property rentals vs rooms in a lived in property.

Both of which would be highly relevant metrics for cities concerned about short term rental platforms’ impact on local housing stock and rents.

Asked about this the Commission spokeswoman told us it had to “ensure a fair balance between the transparency that will help the cities to develop their policies better and then to protect personal data — because this is about private houses”.

“The decision was taken on this basis to strike a fair balance between the different interests at stake,” she added.

When we pointed out that it would be possible to receive property data in aggregate, in a way that does not disclose any personal data, the spokeswoman had no immediate response. (We’ll update this report if we receive any additional comment from the Commission on our questions).

Without pushing for more granular data from platforms the Commission initiative looks like it will achieve only a relatively superficial level of transparency — and one which might best suit platforms’ interests by spotlighting attention on tourist dollars generated in particular regions rather than offering data to allow for cities to drill down into flip-side impacts on local housing and rent affordability.

Gemma Galdon, director of a Barcelona-based research consultancy, called Eticas, which focuses on the ethics of applying cutting edge technologies, agreed the Commission move falls short — though she welcomed the move towards increasing transparency as “a good step”.

“This is indeed disappointing. Cities like Barcelona, NYC, Portland or Amsterdam have agreements with airbnb to access data (even personal and contact data for hosts!),” she told us.

“Mentioning privacy as a reason not to provide more data shows a serious lack of understanding of data protection regulation in Europe. Aggregate data is not personal data. And still, personal data can be shared as long as there is a legal basis or consent,” she added.

“So while this is a good step, it is unclear why it falls so short as the reason provided (privacy) is clearly not relevant in this case.”

Uber driver reclassified as employee in France

France’s Court of Cassation, a court of last resort, has ruled that a former Uber driver should have been considered an employee instead of a self-employed partner. As the Court of Cassation is the supreme court of appeal in that case, Uber can no longer appeal the decision.

Back in June 2017, an Uber driver filed a lawsuit against Uber because their account had been deactivated. A labor court first refused to look at the case, saying that the court couldn’t rule on that case as it didn’t involve an employee and an employer.

Another court in Paris then took care of the case and ruled that there was an employment relationship between that Uber driver and Uber itself. According to the court, there was a relationship of subordination between the company and the driver — in other words, the driver was following orders from Uber.

In particular, the Paris court said that the driver couldn’t build their own customer base and couldn’t set prices. The driver also argued that Uber was overseeing their work, as they would receive a message that said “Are you still there?” after declining three rides.

The case ended up with the Court of Cassation. “When the driver goes online on Uber’s digital platform, there’s a relationship of subordination between the driver and the company. Based on that, the driver isn’t providing a service as a self-employed worker but as an employee,” the court wrote.

The court says that self-employed persons should be able to do three things — manage their clients themselves, set prices and choose how to execute a task. Uber failed to comply with those three criteria.

The driver can’t decide to accept or decline a ride based on the destination as Uber only reveals the destination of the ride after accepting a ride. If the driver declines too many rides or gets bad ratings, the driver can lose access to their account.

“The driver participates in a managed transportation service and Uber unilaterally defines the operating terms,” the court wrote. Even if the driver can stop using Uber for days without any consequence, the court says that this feature is irrelevant in that particular case.

An Uber spokesperson sent the following statement:

This decision relates to the case of one specific driver, who hasn’t used the Uber app since 2017. The ruling does not reflect the reasons why drivers choose to use Uber: the independence and freedom to work if, when and where they want. Over the last two years we’ve made many changes to give drivers even more control over how they use Uber, alongside stronger social protections. We’ll keep listening to drivers and introduce further improvements.

We’re now going back to square one. A labor court is now in charge of the case. It will decide whether the former driver should receive financial compensation based on today’s new ruling.

Other drivers could leverage the ruling from the top court for their specific cases. Despite what Uber says, this could set a precedent for Uber and many other companies operating marketplaces with self-employed partners in France.

France slaps Google with $166M antitrust fine for opaque and inconsistent ad rules

France’s competition watchdog has slapped Google with a €150 million (~$166M) fine after finding the tech giant abused its dominant position in the online search advertising market.

In a decision announced today — following a lengthy investigation into the online ad sector — the competition authority sanctions Google for adopting what it describes as “opaque and difficult to understand” operating rules for its ad platform, Google Ads, and for applying them in “an unfair and random manner”.

The watchdog has ordered Google to clarify how it draws up rules for the operation of Google Ads and its procedures for suspending accounts. The tech giant will also have to put in place measures to prevent, detect and deal with violations of Google Ads rules.

A Google spokesman told TechCrunch the company will appeal the decision.

The decision — which comes hard on the heels of a market study report by the UK’s competition watchdog asking for views on whether Google should be broken up — relates to search ads which appear when a user of Google’s search engine searches for something and ads are served alongside organic search results.

More specifically it relates to the rules Google applies to its Ads platform which set conditions under which advertisers can broadcast ads — rules the watchdog found to be confusing and inconsistently applied.

It also found Google had changed its position on the interpretation of the rules over time, which it said generated instability for some advertisers who were kept in a situation of legal and economic insecurity.

In France, Google holds a dominant position in the online search market, with its search engine responsible for more than 90% of searches carried out and holds more than 80% of the online ad market linked to searches, per the watchdog which notes that that dominance puts requirements on it to define operating rules of its ad platform in an objective, transparent and non-discriminatory manner.

However it found Google’s wording of ad rules failed to live up to that standard — saying it is “not based on any precise and stable definition, which gives Google full latitude to interpret them according to situations”.

Explaining its decision in a press release the Autorité de la Concurrence writes [translated by Google Translate]:

[T]he French Competition Authority considers that the Google Ads operating rules imposed by Google on advertisers are established and applied under non-objective, non-transparent and discriminatory conditions. The opacity and lack of objectivity of these rules make it very difficult for advertisers to apply them, while Google has all the discretion to modify its interpretation of the rules in a way that is difficult to predict, and decide accordingly whether the sites comply with them or not. This allows Google to apply them in a discriminatory or inconsistent manner. This leads to damage both for advertisers and for search engine users.

The watchdog’s multi-year investigation of the online ad sector was instigated after a complaint by a company called Gibmedia — which raised an objection more than four years ago after Google closed its Google Ads account without notice.

At the time, Gibmedia requested provisional measures be taken. The watchdog rejected that request in a 2015 decision but elected to continue investigating “the merits of the case”. Today’s decision marks the culmination of the investigation.

In a response statement on the decision, a Google spokesperson said: “People expect to be protected from exploitative and abusive ads and this is what our advertising policies are for.”

Its statement also claims Gibmedia was “running ads for websites that deceived people into paying for services on unclear billing terms”. “We do not want these kinds of ads on our systems, so we suspended Gibmedia and gave up advertising revenue to protect consumers from harm,” the Google spokesperson added.

However the watchdog’s press release anticipates and unpicks this argument — pointing out that while having an objective of consumer protection is “perfectly legitimate” it does not justify Google treating advertisers in “a differentiated and random manner in comparable situations”.

“Google cannot suspend the account of an advertiser on the grounds that it would offer services that it considers contrary to the interests of the consumer, while agreeing to reference and accompany on its advertising platform sites that sell similar services,” it writes. 

While the watchdog does not state that it found evidence Google used ambiguous and inconsistently applied ad rules in a deliberate attempt to block competitors, it asserts the behavior displays “at best negligence, at worst opportunism”.

It also suggests that another element of Google ad rules could lead sites to favor a content policy aligned with its own ad-funded services — thereby pushing online publishers to adopt an economic model that feeds and benefits its own. 

During Google’s implementation of the now sanctioned practices the watchdog points out that the company has received regular warnings around EU competition rules — noting the string of European Commission antitrust decisions against Google products in recent years. (Most recently, in March, Google was fined ~$1.7BN for antitrust violations related to its search ad brokering business, AdSense.)

While, since 2010, it says it has issued a number of decisions related to the drafting and application of rules on the ad market which Google could also have taken note of.

In addition to being fined, being required to clarify its procedures and to set up a system of alerts to help advertisers avoid account suspensions, the decision requires Google to organize mandatory annual training for Google Ads support staff.

It must also submit an annual report to the watchdog specifying the number of complaints filed against it by French Internet users; the number of sites and accounts suspended; the nature of the Rules violated and the terms of the suspension.

Within two months of today’s decision Google must also present the watchdog with a report detailing the measures and procedures it will take to take to comply with the orders. A further report is due within six months detailing all the measures and procedures Google has actually put in place.

At the start of this year Google was also fined $57M by France’s data protection watchdog for violations of Europe’s General Data Protection Regulation.