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Uber, Lyft spend big in California to oppose even costlier gig-worker law By Reuters

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© Reuters. A sign marks a rendezvous location for Lyft and Uber users at San Diego State University in San Diego

By Tina Bellon

(Reuters) – Uber Technologies Inc (N:) and Lyft Inc (O:) together are spending nearly $100 million on a November California ballot initiative to overturn a state law that would compel them to classify drivers as employees.

That sum looks less huge, however, than the potential costs of complying with the existing law, according to a Reuters analysis.

The two ride-hailing companies would each face more than $392 million in annual payroll taxes and workers’ compensation costs even if they drastically cut the number of drivers on their platforms, a Reuters calculation showed.

(Graphic on potential price hikes – https://fingfx.thomsonreuters.com/gfx/mkt/yxmvjbwamvr/rLQlH-uber-s-california-price-hikes-if-drivers-are-employees.png)

Using a recently published Cornell University driver pay study in Seattle as a basis, Reuters calculated that each full-time driver would cost the company, on average, an additional $7,700. That includes roughly $4,560 in annual employer-based California and federal payroll taxes and some $3,140 in annual workers’ compensation insurance, which is mandated in California.

The companies say they would need to significantly hike prices to offset at least some of those additional costs, which in turn would likely cause a decrease in consumer demand, but cushion the blow of the added costs to the bottom line.

Uber and Lyft have also said they could abandon the California market – an economy that would rank fifth in the world if the state were a sovereign nation. Other U.S. states have said they plan to follow California’s lead and pass similar laws.

A “yes” vote on California’s Proposition 22 gives Uber and Lyft what they seek, which is to overturn the state’s gig-worker law, known as AB5, which took effect in January. Uber and Lyft have insisted the law does not apply to them, sparking a legal battle.

The tussle over classification of workers highlights the political and business risks facing Uber, Lyft, DoorDash and other companies that have built businesses on workers who are not classified as employees eligible for health coverage, unemployment insurance or other benefits.

Under the company-sponsored ballot measure, so-called gig workers would receive some benefits, including minimum pay, healthcare subsidies and accident insurance, but remain independent contractors not entitled to more substantial employee benefits.

POLITICAL FIGHT

The question of whether gig workers should be treated as employees has become a national issue in U.S. politics.

U.S. Democratic presidential candidate Joe Biden and his running mate, Senator Kamala Harris, have both voiced their strong support for California’s labor law and directly called on voters to reject the companies’ ballot proposal that would weaken it.

The campaign of U.S. President Donald Trump has not directly weighed in on the ballot measure, but the administration’s Labor Department in September published proposed rules that would standardize legal definitions across the country and provide more room for companies to maintain independent contractors. U.S. Labor Secretary Eugene Scalia criticized AB5 in an opinion piece published on Sept. 22.

California represents 9% – or roughly $1.63 billion in all of 2019 – of Uber’s global rides and food delivery gross bookings. However, California generates a negligible amount of adjusted earnings before interest, taxes, depreciation and amortization, Uber said in November 2019.

Lyft, which operates only in the United States and Canada and does not have a food delivery business, in August said California makes up some 16% of the company’s total rides. Lyft does not break out ride-hailing revenue, but California contributed $576 million as a share of total 2019 revenue.

FEWER DRIVERS

California sued Uber and Lyft in May for not complying with AB5. The ride-hailing companies said their workers are properly classified as independent contractors, because they can set their own schedules.

The companies say the majority of their drivers do not want to be employees, and work fewer than 25 hours a week. Many drivers use the service to supplement income from other jobs.

While no legal requirements would prevent the companies from classifying part-time drivers as employees, Uber said administrative fixed costs per employee would make it more expensive to allow part-time employment. Uber said it would therefore be forced to reduce its California driver base by 76% to 51,000 full-time driver employees.

Uber also said it could reduce cash wages to offset higher benefit costs, thereby lowering the potential tax burden.

Lyft executives in court filings have said the company would have to “substantially reduce” its California driver base to a smaller number of driver employees, but has not provided a figure. The company did not respond to detailed requests for comment.





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European stocks fall as healthcare, construction sectors drag By Reuters

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© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

By Sruthi Shankar

(Reuters) – European shares fell for a third straight session on Wednesday, as losses in healthcare and construction stocks countered a lift from encouraging earnings from consumer giant Nestle and telecoms equipment maker Ericsson (BS:).

The pan-European STOXX 600 () fell 1.0%, in sharp contrast to Asian markets and Wall Street futures that steadied on hopes of a fresh U.S. stimulus package.

Most European sectors slipped, with healthcare stocks () proving the biggest drag, while banking stocks () were supported by rising U.S. and European government bond yields.

Nestle (S:) lifted its 2020 sales forecast following a quarterly beat, but shares inched lower after early gains.

Sweden’s Ericsson (ST:) jumped 5.5% as higher margins and China’s 5G rollout helped the company beat quarterly core earnings estimates.

“Earnings have been generally well above expectations, and guidance has been a positive surprise,” said Patrick Moonen, principal strategist in the multi-asset team at NN (NASDAQ:) Investment Partners.

“But there are other elements that are currently at play and may have a bigger impact on the market performance than earnings.”

Moonen pointed to many European countries reimposing mobility restrictions following a surge in COVID-19 cases that could weigh on fourth-quarter economic activity.

The STOXX 600 has struggled to break out of a trading range since June, when it recouped a large part of the early pandemic-driven losses. The benchmark is still about 16% below its all-time high.

London markets underperformed, with the exporter-heavy FTSE 100 () hit by a surge in pound after bullish Brexit comments. ()

Vivendi (PA:) rose 2.9% after the French media group reported a bigger-than-expected quarterly sales and unveiled plans to list its most-prized asset, Universal Music Group, in 2022.

Third-quarter profits for companies on the STOXX 600 are expected to drop 34.8%, according to Refinitiv data, a slight improvement from the 36.7% predicted at the start of the earnings season.

Of the 29 companies that reported so far, 75.9% have topped earnings expectations.

Gold miner Centamin Plc (L:) slumped 20.7% to the bottom of STOXX 600 after cutting its 2020 production forecast.

Construction companies also took a knocking, with Assa Abloy (ST:), the world’s biggest lockmaker, falling 3.9% after it reported a drop in quarterly sales.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Japan stocks higher at close of trade; Nikkei 225 up 0.31% By Investing.com

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© Reuters. Japan stocks higher at close of trade; Nikkei 225 up 0.31%

Investing.com – Japan stocks were higher after the close on Wednesday, as gains in the , and sectors led shares higher.

At the close in Tokyo, the added 0.31%.

The best performers of the session on the were Takara Holdings Inc. (T:), which rose 7.67% or 83.0 points to trade at 1165.0 at the close. Meanwhile, The Japan Steel Works, Ltd. (T:) added 7.40% or 157.0 points to end at 2280.0 and Pacific Metals Co., Ltd. (T:) was up 5.92% or 95.0 points to 1701.0 in late trade.

The worst performers of the session were NEC Corp. (T:), which fell 2.25% or 130.0 points to trade at 5640.0 at the close. Yahoo Japan Corp. (T:) declined 1.82% or 14.0 points to end at 756.0 and Olympus Corp. (T:) was down 1.79% or 37.0 points to 2027.0.

Rising stocks outnumbered declining ones on the Tokyo Stock Exchange by 2348 to 1140 and 212 ended unchanged.

The , which measures the implied volatility of Nikkei 225 options, was unchanged 0% to 20.83.

Crude oil for December delivery was down 1.08% or 0.45 to $41.25 a barrel. Elsewhere in commodities trading, Brent oil for delivery in December fell 1.14% or 0.49 to hit $42.67 a barrel, while the December Gold Futures contract rose 0.35% or 6.75 to trade at $1922.15 a troy ounce.

USD/JPY was down 0.35% to 105.12, while EUR/JPY fell 0.09% to 124.58.

The US Dollar Index Futures was down 0.26% at 92.812.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Iberdrola’s Avangrid to buy U.S. firm PNM Resources for $4.3 billion By Reuters

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2/2
© Reuters. The logo of Spanish utility company Iberdrola is seen outside its headquarters in Madrid

2/2

By Isla Binnie

MADRID (Reuters) – Spanish renewable energy firm Iberdrola (MC:) announced plans to expand in the United States on Wednesday with a deal to buy utility PNM Resources (N:) through its U.S. unit Avangrid (N:) worth $8.3 billion including debt.

Absorbing PNM into Avangrid will create the third-largest renewable energy operator in the United States, with business spanning 24 states, Iberdrola said in a statement.

On Tuesday Reuters reported that the deal was being discussed.

PNM’s board unanimously approved the $4.3 billion offer to its shareholders of $50.3 per share, the filing said. Iberdrola expects the deal to close in 2021 and start boosting financial results from the first year.

Green energy targets and increasing investor interest in protecting the environment have buoyed Iberdrola and other renewables-focused utilities.

The pandemic has also seen U.S. utilities look harder at consolidation to cut costs and spur investment.

Active in New Mexico and Texas, PNM gives Avangrid a route to expand its regulated business beyond the U.S. northeast.

PNM could also benefit from Avangrid’s renewables experience as it works to cut emissions.

Iberdrola said the merged company would have assets worth $40 billion, generate core earnings of around $2.5 billion and net profit of $850 million.

This is Iberdrola’s eighth deal this year as part of a 10 billion euro ($11.85 billion) investment drive in which it has already bought assets in France, Australia and Japan.

CEO Ignacio Galan said his strategy consisted of: “Friendly transactions, focused on regulated businesses and renewable energy, in countries with good credit ratings and legal and regulatory stability, offering opportunities for future growth”.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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