Dara Khosrowshahi, CEO Uber Technologies Inc., threatened to temporarily shut down service in California if it loses a drawn-out fight over a state law seeking to reclassify contractors as employees.
Before then, Uber will continue a lengthy political and legal battle it has been waging since before the law was enacted this year. The company said it will appeal a court ruling Monday saying it must reclassify drivers as employees, and then it will ask voters in November to overturn the law.
Many regular drivers are hoping to secure the same health and unemployment benefits afforded to other workers in the state. But Uber has said the labor law threatens to shut down the entire gig economy by substantially raising companies’ expenses. A person familiar with Uber’s deliberations described a threatened shutdown in California as a “nuclear option” that would only be used as a last resort.
Khosrowshahi made his comments in a television interview Wednesday. “If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly,” he said on MSNBC.
Uber is asking the judge who issued the injunction to hold a hearing on Thursday for Uber to request that Monday’s order be put on hold for the duration of the appeals process, according to a filing in San Francisco state court.
Tesla Inc. is splitting its elevated shares in a 5-for-1 exchange, a move timed to make the stock price less expensive for individual investors after becoming the world’s most valuable automaker. Its shares surged on the news in aftermarket trading.
Each shareholder of record on Aug. 21 will receive a dividend of four additional shares of common stock for each share, the Silicon Valley electric-car manufacturer said Tuesday. Trading will begin on a split-adjusted basis on Aug. 31.
The split is a time decision to capitalize on Tesla’s recent surge, which has pushed its valuation to around $256 billion, surpassing the value of Ford Motor Co. and Toyota Motor Corp. combined. With a price as high as $1,643 in recent weeks, the shares are beyond the reach of many smaller stock investors just as the EV industry is capturing their imagination.
Analysts praised the move as a timely decision to capitalize on Tesla’s recent stock price surge.
“At a time where the appetite for the stock and overall EV story continues to gain momentum, I think it’s a smart move,” said Dan Ives, an analyst at Wedbush who rates the shares the equivalent of a hold. Tesla’s move follows a similar split by Apple Inc., which Ives said other tech giants are likely to emulate.
Apple announced a 4-for-1 stock split after the close on July 30 and retail traders have piled in to bet on further gains.
Tesla has been a favorite stock for day traders and other retail investors, who have helped boost the shares to record highs. At one point last month, nearly 40,000 Robinhood account holders added shares of the automaker during a single four-hour span. That helped spawn a boom in shares of other EV companies — even those that have yet to actually produce a vehicle.
Credit Suisse analyst Dan Levy said in a note to investors that the split makes the shares more accessible to both retail investors and Tesla employees, noting the high stock price “may have been a barrier for retail” investors.
At its peak on July 20, Tesla’s stock price was more than quadruple a March low of $361.22. Some of those gains came amid speculation the automaker is likely to join the S&P 500 after it reported the latest in a string of profitable quarters, making it a true blue-chip and a must-buy for mutual and exchange-traded funds that seek to mimic that benchmark stock index.
In aftermarket Nasdaq trading Tuesday, Tesla shares rose as much as 8.4 percent to $1,490.
The timing of the split may have come as a surprise to close followers of Tesla CEO Elon Musk’s Twitter feed. He was asked on June 30 whether he had any thoughts about a Tesla stock split and said it was worth discussing at the company’s annual meeting, which isn’t until Sept. 22.
The Alliance for Automotive Innovation filed an amicus brief Monday in support of Volkswagen’s petition to a U.S. court to reconsider a ruling that would allow state and local governments to regulate modifications to emission-control systems once a vehicle is sold.
The action comes after VW asked the 9th U.S. Circuit Court of Appeals in July to reconsider its ruling, which determined the Clean Air Act does not preempt state and local authorities from enforcing anti-tampering laws against manufacturers’ post-sale updates to emission-control systems.
In the filing, the Alliance echoed the German automaker’s position that permitting state and local governments “to apply their own prohibition on tampering to post-sale, model-wide changes” to vehicles would scrap regulatory certainty and create chaos.
The Washington auto lobbying group represents most major automakers, including Volkswagen, in the U.S.
The Alliance said manufacturers routinely update the software design and calibration of their engines and emission-control systems, providing benefits for consumers and the environment by resolving problems and thereby improving a vehicle’s overall performance, reliability, driveability, safety and emissions control. The group argues that it would be complicated for different regulators to determine and agree whether a post-sale modification is unlawful tampering or an improvement to design and function.
The Clean Air Act “avoids this uncertainty by giving a single agency, EPA, the responsibility to collect testing data from manufacturers on post-sale emissions and to supervise post-sale, model-wide changes to emission systems,” the alliance said in the brief.
The 3-0 ruling in June would allow Florida’s Hillsborough and Utah’s Salt Lake counties to seek potentially billions in penalties from VW for violation of their laws prohibiting tampering with emission-control systems. The court ruled VW must face anti-tampering claims by the two counties over fixes made to its diesel vehicles after they were sold.
“We are mindful that our conclusion may result in staggering liability for Volkswagen,” the judges said in the ruling. “But this result is due to conduct that could not have been anticipated by Congress: Volkswagen’s intentional tampering with post-sale vehicles to increase air pollution.”
The panel argued Volkswagen “installed defeat devices in new cars for the purpose of evading compliance with federally mandated emission standards and, subsequently, updated the software in those cars so the defeat devices would do a better job of avoiding and preventing compliance.”
The ruling, if upheld, would allow all 50 states and thousands of local governments to regulate emissions software updates and other modifications after a vehicle is sold and could undermine the EPA’s ability to exclusively regulate automakers’ emissions compliance.
VW said the decision could force automakers “either to avoid maintaining or improving the emission control systems of in-use vehicles … or pass on the substantial increased compliance costs to consumers,” according to a court document filed July 30.
“The panel’s decision contravenes the [Clean Air Act’s] text, structure and history and will lead to the very regulatory chaos Congress sought to avoid in enacting that law,” the automaker argued.
Volkswagen admitted in 2015 to cheating U.S. emissions tests on diesel engines by installing illegal software. The automaker settled U.S. criminal and civil actions for more than $20 billion, but it did not obtain liability protections from state and local governments, the court said.
The diesel emissions scandal has cost the German automaker about €31 billion ($35 billion) in fines, penalties and vehicle buyback costs worldwide since 2015.
A California judge Monday granted the state’s request for a preliminary injunction blocking Uber Technologies Inc. and Lyft Inc. from classifying their drivers as independent contractors rather than employees.
Judge Ethan Schulman of the San Francisco Superior Court delayed enforcing his order by 10 days to give the companies a chance to appeal.
The decision is a setback for the ride-hailing companies as they defend against a May 5 lawsuit by California Attorney General Xavier Becerra and the cities of Los Angeles, San Diego and San Francisco.
Uber and Lyft were accused of violating a new state law requiring companies to classify workers as employees if they controlled how workers did their jobs, or the work was part of their normal business.
Several hundred thousand “gig” workers, including many at ride-hailing companies and app-based food delivery services, are affected by the law, Assembly Bill 5, which had broad support from organized labor. It took effect on Jan. 1.
Uber and Lyft did not immediately respond to requests for comment.
Former National Independent Automobile Dealers Association CEO Steve Jordan will join KAR Global as executive vice president of dealer sales, the company said Monday. The association announced Friday that Jordan resigned as CEO.
He remains at NIADA in an advisory capacity as part of a 30-day transition period and is to join KAR in September.
Jordan was CEO of NIADA, of Arlington, Texas, for seven years. At KAR, he is to lead the vehicle wholesaling company’s dealer sales organization in the U.S. and Canada, with a focus on advancing the company’s portfolio of buyer and seller products and services for auto retailers.
“Steve is a true industry leader who understands the full automotive ecosystem, from high-level market and economic trends to the day-to-day challenges of running a dealership,” John Hammer, chief commercial officer for KAR, said in a statement Monday. Hammer said Jordan’s “broad insight and experience” will help the company stay connected with dealers and his “digital mindset and entrepreneurial spirit are a perfect match” for KAR’s strategy and culture.
NIADA has begun searching for Jordan’s replacement. Jordan has been with the association, which represents the used automobile industry and more than 38,000 licensed used-vehicle dealers, since 2009, when he was named executive director of the affiliated Florida Independent Automobile Dealers Association. He joined the national association’s staff in 2011 as COO.
Under Jordan’s leadership, the association strengthened its presence on Capitol Hill by reviving its annual lobbying event in Washington and ramping up its legislative advocacy. He orchestrated two acquisitions that expanded NIADA’s dealer 20 Groups and educational programs.
“Through the association, we made an indelible mark on the used vehicle industry by uniting the voice of the independent dealer in common purpose,” Jordan said. “Of course I am proud of the numerous association accomplishments over the years, but the many friendships that were created along the way have been the most rewarding.”
The National Automobile Dealers Association is also searching for a new chief, following an announcement in May that CEO Peter Welch will retire from the franchised dealer trade group at the end of the year.
LOS ANGELES — Hyundai Motor Co. is launching a global battery-electric brand using the Ioniq name from its current hybrid and EV hatchbacks. It plans to release three electric vehicles from the new brand in the next four years, starting in early 2021 with a midsize crossover.
Hyundai Motor Group, which includes Kia and Genesis, has said it aims to sell 1 million battery-electric vehicles and take 10 percent market share to become a leader in the global EV field by 2025. Hyundai Motor plans to become the third-largest maker of eco- friendly vehicles, including fuel cell EVs.
The Ioniq 5 coming next year is based on the concept 45 vehicle from the 2019 Frankfurt auto show, the automaker said in a statement. The Ioniq 6 — to be launched in 2022 — is a sedan that takes its inspiration from the Prophecy concept shown in March. It will be followed in early 2024 by a large SUV, the Ioniq 7.
The naming of the vehicles is based partially on body style. Crossovers and SUVs will use odd numbers and sedans will use even numbers, Hyundai said in a press release. The current Ioniq vehicles will be known simply as Hybrid, Plug-In Hybrid and Electric.
The new Ioniq brand will be sold through the existing Hyundai dealership network.
“To fulfill Ioniq’s brand mission, Hyundai will combine its current EV capabilities — such as ultra-fast charging, spacious interior and battery-supplied power — with future innovations that combine design, technologies and services to integrate in-car and out-of-car experiences,” the company said.
Hyundai said that additional Ioniq models will follow after the first three are launched by 2024. “The creation of the Ioniq brand is in response to fast-growing market demand and accelerates Hyundai’s plan to lead the global EV market,” the company said.
Separately, the automaker’s luxury Genesis brand has said it will sell an EV after the launch of its upcoming gasoline-powered crossovers this year and in 2022.