Uber said last night that it has settled a pair of closely-watched class action lawsuits that turned on whether the ride-hailing company had misclassified its drivers as contractors.
The deal will cost Uber up to $100 million in compensation and require changes in how it deals with its drivers. But significantly, it maintains the drivers’ status as independent contractors. “Drivers value their independence,” CEO Travis Kalanick said in a blog post, “the freedom to push a button rather than to punch a clock.”
If the settlement is approved, the resolution could lift a major legal cloud over the future of Uber and other on-demand services, and accelerate growth in the so-called “gig economy.”
Also today, Fortune is publishing Cliff Leaf’s story from the May magazine that takes a deeper look at Napster-founder Sean Parker’s recently announced plan to spend $250 million to hack cancer. This isn’t just another billionaire’s random act of philanthropy. Parker has managed to get six of the top cancer immunology centers in the world to coordinate their efforts through his institute, sharing data and centrally managing their IP, in hopes of accelerating a cure. It’s a fascinating new undertaking at the intersection of medicine and technology, which is a very busy intersection these days and one that Fortune is devoting more attention to. You can read the full story here.
More news below. Enjoy the weekend.
• The Black Cloud Spreads
Daimler, the maker of Mercedes-Benz and Smart cars, is conducting an internal review of its emissions testing processes at the request of from the Department of Justice. Speculation that the DoJ would catch up with Daimler has swirled around VW’s upmarket rival for months, after widespread reports suggesting that all carmakers had been gaming the testing system. There is no suggestion of wrongdoing by the company, which has dismissed as worthless the handful of class actions lawsuits launched against it in the U.S. so far, but its shares have fallen 5% this morning in Frankfurt. In related news, France’s Peugeot (which doesn’t market its diesels in the U.S., said it too had been raided by French law enforcement.
• Alphabet’s Tepid 1Q Soup
Google’s parent company Alphabet missed its first-quarter earnings target by a fraction yesterday, and an underwhelming conference call that followed the news sent the company’s shares down 5%. CFO Ruth Porat, who joined from Morgan Stanley, may have become the victim of her own success, in casting more light on how much of the cash from its ever-reliable media business is being consumed by ‘moonshot’ investments in other areas such as connected homes and cars. On the plus side, CEO Sundar Pichai said the company’s ready to take on Amazon Web Services and Microsoft’s Azure in the Cloud services business, now that its data centers and Artificial Intelligence are up to the job.
• China Shuts Down Two Apple Services
The first casualty of China’s new rules for foreign media is an unexpected one: Apple. News surfaced today that its iBooks Store and iTunes Movies services were suspended in the country at the request of government regulators last week, according to the New York Times. The services opened in the country just six months ago, with the blessing of the authorities. Apple is special in China in many ways. It is an American tech company which has largely avoided the regulatory harassment and faltering sales of rivals Microsoft, Cisco and IBM since the 2013 Edward Snowden revelations of tech companies’ involvement in U.S. espionage.
• Regulators Take Aim at Wall Street Pay
Thousands of bankers on Wall Street are facing tighter rules on how they are paid, as U.S. regulators look to curb ‘excessive’ risk-taking at the country’s biggest financial firms, The Wall Street Journal reports. The proposed new rules would force firms to defer payment of at least half of executives’ bonuses for four years, a year longer than current industry practice. They also include plans to allow banks to “claw back” bonuses if it turns out an executive’s actions hurt the institution.
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Around the Water Cooler
• Nothing Compared to Him
The Grim Reaper is putting together a heckuva band this year. We said goodbye yesterday to Prince, the standout performer of the 1980s, whose music was the soundtrack to the adolescence and young adulthood of many a C-Suite denizen. The cause of death is not yet public and will be established by an autopsy later today. Prince was the complete showman and a musician’s musician who mastered dozens of instruments in expressing a creative streak a mile wide. He was also the biggest star ever to come out of Minnesota (pace Dylan fans). He joins David Bowie, The Eagles’ Glenn Frey, rapper Phife Dawg, Beatles producer George Martin and, not least, singer Denise Matthews, with whom he collaborated, on this year’s roll of honor.
•Valeant Wants Perrigo’s Papa as CEO
Valeant is seeking to appoint Joseph Papa, the boss of pharma rival OTC drug maker Perrigo, as its new chief executive, according to various media reports. The Canadian company, whose CEO Michael Pearson stepped down under pressure from the scandal over its business practices, wants to make the announcement as soon as next week, assuming a non-compete clause in his contract can be voided. Papa has overseen impressive growth at Perrigo in a decade in charge there, although the froth has come off its share price in recent months as the Obama administration’s new regulations ate into the attractiveness of its tax domicile in Ireland to potential buyers.
• Suicide Rate Hits 30-Year High
Suicide in the United States has surged to the highest levels in nearly 30 years, according to new federal data analysis, with increases in every age group except older adults. The rise was particularly steep for women, and for middle-aged Americans. The sociologists will be poring over the findings for some time, especially as regards the relative tendencies among distinct population groups, and as regards the link to changing economic circumstances. But what is clear is that the overall number of suicides has been rising steadily since 2006, by an average of 2% a year. That is a bleak development that demands both an explanation and action.
• Wozniak: Apple Should Pay More Tax
Apple co-founder Steve Wozniak thinks the company (and other companies too) should be paying a 50% tax rate.“I do a lot of work, I do a lot of travel and I pay over 50% of everything I make in taxes, and I believe that’s part of life and you should do it,” Wozniak told the BBC. Asked if Apple should be paying such a rate, he replied: “Every company in the world should.” Compare and contrast with Tim Cook’s recent refusal to repatriate the cash mountain it has accumulated overseas “because it would “cost me 40% to bring it home.” Cook also claimed Apple is already the biggest corporate tax payer in the U.S.. Apple shareholders will be glad that Wozniak is long gone from the company. Taxpayers maybe not so much.