A disruptive smartphone app turned Uber into a $50 billion global juggernaut. Now a group of disgruntled Uber drivers, with the help of their own smartphone app, aims to kneecap the car-hailing service precisely when and where it will be most in demand: Super Bowl Sunday in the Bay Area.
Striking drivers reportedly intend to slow traffic near the stadium and inundate the streets around crowded Super Bowl events.
For Uber, the stakes are high. The big game is in Santa Clara, about an hour from Uber's San Francisco headquarters. The company has chipped in $250,000 to $500,000 in cash and services to sponsor the Super Bowl Host Committee, according to Quartz. In return, it gets to be the first ride-sharing service allowed to access a Super Bowl game. It will even have exclusive pick-up and drop-off zones at the stadium—a coup for Uber's marketing department, assuming the company doesn't fall on its face.
And that's where Uber's labor problems may come back to haunt it. The drivers, who often make less than minimum wage, are angry because the company slashed fares nationwide over the past month. On Monday, several hundred of them protested at Uber's offices in San Francisco and New York.
The group behind the San Francisco protest, United Uber Drivers, has pledged to hold a massive strike on Super Bowl Sunday, and some Uber drivers in other cities have said they will do the same in solidarity. According to the industry publication Ride Share Report, the drivers intend to slow highway traffic near the stadium and inundate the streets around crowded Super Bowl events in San Francisco.
That might not be all. United Uber Drivers did not respond to emails from Mother Jones, but downloading the group's special iPhone app offers a bit more insight into its plans:
Other messages explain that when a push notification is received through the app, all drivers will be asked to go offline simultaneously, crippling Uber's network. "We need you to invite every Uber driver you know," urges the first message, written in November. "This communication technology will allow us to invite, unite and strike effectively without any fear or loss of the business relationship with Uber."
But that might be easier said than done. With an estimated 40,000 Uber drivers in the Bay Area, the group will need a lot of downloads to mount an effective strike. Of course, people said the same thing about some startup's harebrained bid to defeat the taxi industry. Uber proved them wrong.
Political bluster flowed after Sandy Hook—and so did millions of dollars in subsidies.
Josh HarkinsonJan. 28, 2016 7:00 AM
Production line at the Smith & Wesson factory in Springfield, Massachusetts
In January 2013, a month after the mass shooting at Sandy Hook Elementary School, the state of New York passed gun control legislation that included a ban on the retail sale of assault weapons. Soon after, Remington Outdoor Company, the maker of the Bushmaster assault rifle used in the massacre, announced it would lay off workers at its 200-year-old factory in Ilion and move production to Huntsville, Alabama. Then CEO George Kollitides explained in a letter to New York officials that the move was brought on by "state policies affecting use of our products."
The gun lobby crowed about political payback: "We hope that sends a very strong message," remarked then National Rifle Association's president, Jim Porter, on an NRA radio show. What Porter didn't mention was what Alabama had done to sweeten the deal: By relocating to Huntsville, Remington, a $1 billion firearms conglomerate owned by the Manhattan private-equity firm Cerberus Capital Management, would receive state and local grants, tax breaks, and other incentives worth approximately $69 million—the equivalent of getting about $14 from every resident of Alabama.
"I've had CEOs tell me that the offers are so extraordinary that they could essentially move their factories for free," said one gun industry leader.
Since 2003, state and local governments from Alabama to Tennessee have given more than $120 million worth of taxpayer funds to at least seven major firearms companies, according to research by Mother Jones. Most of those subsidies—nearly $100 million—have been pledged just over the past three years by states seeking to lure gun producers from the Northeast, where new firearm regulations have angered industry leaders.
"I've had CEOs in New England tell me that the offers from states' economic development teams are so extraordinary that they could essentially move their factories for free," Larry Keane, senior vice president of the National Shooting Sports Federation, toldGuns & Ammo. "In some cases they've received these offers almost daily over extended periods of time."
After Maryland passed stringent new gun regulations in 2013, Beretta announced it would shutter its factory there and relocate to a state that has shown "consistent, strong support for Second Amendment rights," as its attorney, Jeff Reh, put it at the time. But politics wasn't the only factor in Beretta's move. The city of Gallatin, Tennessee, eventually won the new factory after it offered Beretta $14.4 million in state and local subsidies. "The level of community support was better," a Beretta spokesman acknowledged in the Charlotte Business Journal, explaining why that city had lost its bid for the plant.
Southern states have long relied on financial and regulatory incentives to attract manufacturers from more industrialized parts of the country. "I think Remington is doing what Mercedes did for us in the automobile business—it opens the door to opportunity," Porter told the Birmingham Business Journal. Yet Porter suggested gun companies would enjoy an exceptional welcome: "You will have the support of the administration, you will have the support of the population—everybody in the state is going to be lining up to work for Remington."
Tennessee Governor Bill Haslam flew to Italy and met with the Beretta family in a posh wine country villa.
Major politicians have gone the extra mile to attract gun companies. In wooing the Beretta factory, Tennessee Gov. Bill Haslam flew to Italy and met with the Beretta family in a posh wine country villa. Haslam later invited Franco Gussalli Beretta, the head of the company's American subsidiary, to the governor's mansion for dinner. Nobody in Tennessee seemed to object to the deal's $14.4 million price tag. "We believe that our brand as the state of Tennessee has taken on new luster because Beretta has chosen to locate here," Haslan said at the groundbreaking ceremony, "and we are forever grateful."
Another incentive for gun companies to relocate south has been lax labor laws. In an interview with the New Hampshire Union Leader, a Sturm Ruger spokesman admitted the company built a new plant in North Carolina instead of expanding an existing one in Newport, New Hampshire, because it wanted to set up shop in a right-to-work state. Similarly, Remington's move from New York to Alabama, another right-to-work state, decimated the New York plant's trade union.
Some Northeastern states have also funneled tax dollars to the firearms industry. Between 2009 and 2014, New York-based Kimber Manufacturing received nearly $1 million in tax abatements and state and local grants—money meant to ensure the company would keep cranking out upwards of 150,000 handguns a year with its factory in Yonkers. Maine, New Hampshire, and Massachusetts have also offered incentives to attract or retain gun manufacturers. But most such enticements are now in the South.
Here are the seven gun companies that have received state and local subsidies in recent years:
Remington Arms, Madison, North Carolina Move: Owned by a New York private equity fund, Remington in 2014 laid off more than 100 workers at its 200-year-old unionized factory in Ilion, New York (the site of its original headquarters) and opened a new nonunion factory in Huntsville, Alabama. Subsidy:$68.9 million in cash, worker training, tax abatements, real estate, and construction work from state and local governments. The company also received nearly $12 million in grants, tax credits, and other benefits from New York, Kentucky, Arkansas, and Oklahoma in exchange for training workers and expanding or retaining factories.
Sturm Ruger, Southport, Connecticut Move: In 2014, the nation's largest gun company opened a new factory in Mayodan, North Carolina, instead of expanding an existing factory in New Hampshire. Subsidy:$15.5 million in state tax breaks, employee training, infrastructure construction, and other incentives. The company has also received $150,288 in training subsidies from New Hampshire.
Berretta USA, Accokeek, Maryland Move: The Italian gun maker last year closed its Maryland plant and moved all US production to a massive factory in Gallatin, Tennessee. Subsidy: The company will receive $10.41 million in state-funded building improvements and job training grants. The town of Gallatin also kicked in land and tax abatements worth nearly $4 million.
Smith & Wesson, Springfield, Massachusetts. Move: Publicly traded Smith & Wesson announced in 2010 that it would move its hunting rifle division from New Hampshire to Springfield, Massachusetts. Subsidy:$6.6 million in state and local tax breaks. The company has also received $158,791 in worker-training subsidies from Massachusetts.
Colt's Manufacturing, Hartford, Connecticut Move: In 2011 Florida Gov. Rick Scott announced a deal in which the 180-year-old gun company would open a factory in Kissimmee, saying it showed the state was "a defender of our right to bear arms." But then Colt walked away from the project for unknown reasons. The company declared bankruptcy last year. Subsidy:$1.66 million in state and local incentives. Government officials are now trying to claw back the money.
O.F. Mossberg & Sons, North Haven, Connecticut. Move: The world's largest manufacturer of pump-action shotguns has gradually shifted manufacturing from Connecticut to a factory in Eagle Pass, Texas. In 2014, it added 116,000 square feet to the factory, which now accounts for 90 percent of its production. Subsidy: A $300,000 grant in 2014 from the taxpayer-funded Texas Enterprise Fund.
Kimber Manufacturing, Elmsford, New York Move: America's largest manufacturer of 1911 pistols hasn't moved out of New York—at least not yet. In 2012 the company warned that the state's NY SAFE gun control law might "cause it to reconsider its current expansion." Subsidy: In 2009, Kimber received a $700,000 state grant to expand its manufacturing capacity in Yonkers. In 2012 and 2013, it received nearly $300,000 in local tax credits.
Fifty years ago, one-third of American workers belonged to a union. Today, it's 1 in 10. And that number is likely to slip further if, as expected, the Supreme Court weakens public-sector unions, which today account for nearly half of all union members.
Yet despite decades of setbacks, the labor movement still shows signs of life—and not just in its typical blue-collar stomping grounds. Workers across the economy are realizing that unions can help them win better working conditions and higher wages. Here are five industries where unions have made surprising gains:
Last month, more than 220 writers, editors, and other staffers at the Huffington Post voted to join the Writers Guild of America, East. The guild's victory followed other successful drives in recent months at Gawker, Salon, ThinkProgress, and Vice Media. Another union, NewsGuild-CWA, last year helped organize the Guardian US and digital staffers at Al Jazeera America.
Although unions have represented many newspaper reporters for decades, they've only recently begun to penetrate web-only publications. These fast-growing startups typically woo young writers with the promise of huge audiences and considerable editorial freedom—while offering little in the way of salaries, benefits, or family-friendly scheduling.
But as digital reporters have matured, so have their expectations. "The idea that someone will continue to work all his waking hours is not sustainable," Bernard Lunzer, president of the NewsGuild, told the journalism site Poynter.org. "If owners are doing well, workers will say, 'Let's get a bit more reasonable.'"
Most of America's 1 million security guards don't have much security on the job. With scant health benefits and pay that averages just $11 an hour, they are often just one mishap away from disaster.
So some of them are looking to unions for protection. Since 2003, more than 50,000 security guards have won contracts through the Service Employees International Union—often with big improvements in wages, health care, paid time off, and other benefits. In 2015 alone, more than 2,100 security officers in Baltimore, Sacramento, Indianapolis, and Pittsburgh formed unions.
The SEIU has focused primarily on the 60 percent of security guards employed by independent contractors, which tend to pay bottom-of-the-barrel wages. In May, responding to pressure from labor groups, Facebook announced a $15 minimum wage and a new-parent benefit for all its subcontracted workers. Google and Apple recently went even further by bringing their security guards in-house and offering them the same benefits as their other workers.
In 2014, private buses for tech workers in the San Francisco Bay Area became potent symbols of inequality and gentrification. Last year, however, they became known for something more positive: union contracts.
It all started last February, when newly unionized drivers employed by Facebook contractor Loop Transportation won a sweetheart contract through Local 853 of the Teamsters. It guaranteed a $9 raise to $27.50 an hour, fully paid family health insurance—a first—up to five weeks of paid vacation, 11 paid holidays, and a pension. "It was just an amazing first contract," says Doug Bloch, the Teamsters' Northern California political director. "They were literally catapulted into the middle class overnight."
The deal sent ripple effects through the Bay Area labor market. The following month, Apple and Google announced a 25 percent raise for all contract shuttle bus drivers. In May, unionized shuttle drivers at the San Francisco Municipal Transportation Agency won a 44 percent wage increase, 25 days off (up from 12), and a 401(k) plan with an employee match.
Other drivers scrambled to join the union, too. In November, Local 853 won a similarly sweet deal for nearly 200 newly organized employees of Compass Transportation, which serves Apple, eBay, PayPal, and Yahoo, among others. Next up on the union's radar is Bauer's Intelligent Transportation, a contractor for Twitter, Yelp, Cisco, and Salesforce.
"In the Bay Area there's a lot of discussion about the intersection between the high-tech economy and income inequality," says Bloch of the Teamsters. Tech companies "are politically vulnerable for the exact same reason, and that created an opening for us."
In the 1970s, two-thirds of college and university faculty was tenured and a third was not. Now those percentages are flipped: Nearly half of professors don't even have full-time jobs. As with other involuntary part-time workers in restaurants or retail, these "adjuncts" often have a hard time making ends meet.
Enter the SEIU's Faculty Forward campaign. Since launching three years ago, it has won union contracts for more than 10,000 adjunct and nontenured faculty at more than 30 colleges and universities, including Georgetown, Tufts, Boston University, and the University of Chicago. Some profs have seen raises of 30 percent.
In a related campaign, the United Auto Workers is unionizing graduate student workers such as teaching assistants and resident advisers. There are already grad student unions at some 60 public university campuses, but a 2004 National Labor Relations Board ruling has prevented similar unions from forming at private colleges—until now. In 2013, worried that Obama appointees on the NLRB would reverse the Bush-era ruling, New York University agreed to let its grad students form a union. The UAW now has campaigns at Harvard, Columbia, and the New School in New York City—the union also is in talks with students at many other private campuses. The NLRB is expected to revisit its 2004 ruling sometime this year.
"When it first started we didn't pay much notice," admits Jim Gannon, a spokesman for the New York local of the Transport Workers Union. "It was just a bunch of bikes."
But then the union heard from some of the company's 150 workers—mechanics and "balancers" who make sure that the racks don't go empty. They joined the TWU in late 2014 and last year won a contract that guarantees parental leave, paid vacation, and 20 percent raises within five years.
The company's workers in Jersey City, the District of Columbia, Boston, and Chicago soon followed, becoming union members over the next several months. "We kind of take the position that if it's public and it moves on wheels," Gannon now says, "it should be TWU and it should be unionized."
The cartel boss' marijuana business has, well, gone north in recent years.
Josh HarkinsonJan. 12, 2016 7:00 AM
By some estimates, the just-nabbed billionaire drug kingpin Joaquín Guzmán Loera, a.k.a. El Chapo, supplies more than half the cocaine, heroin, methamphetamine, and marijuana that comes into the United States. But not all of those drugs were created equal in his eyes. While pot undoubtedly helped El Chapo get his start, it's no longer the key to his dominion.
Mexico now supplies only about one-third of America's pot, down from two-thirds as recently as 2008.
Guzmán, who was arrested by the Mexican police on Friday, grew up in the 1960s in Sinaloa, the remote, rugged, West Coast state still known as Mexico's marijuana heartland. As a boy, he earned money working in marijuana fields before a friend's father—one of the first Sinaloan farmers to traffic pot in bulk—brought him into what later became the Sinaloa Cartel. And although pot was the cartel's bread and butter for years, El Chapo's syndicate long ago branched into other drugs.
It was a prescient move. Since 2011, competition from high-quality pot grown legally and quasi-legally north of the border has cut the wholesale price for Sinaloan marijuana by 70 percent. Mexico now supplies only about one-third of America's pot, down from two-thirds as recently as 2008. "It's a big difference," a Sinaloan farmer told NPR. "If the US continues to legalize pot, they will run us into the ground."
Like any good businessman, El Chapo understood the importance of a diverse portfolio. In the late 1970s, Mexican traffickers began moving cocaine for producers in Colombia and Central America, first by air and boat to Central America and Mexico, and then by land into the United States. Sinaloa now controls an estimated 35 percent of Colombian cocaine shipments.
Unique among Mexican cartels, Sinaloa is both horizontally and vertically integrated. It produces its own marijuana and heroin, and starting in the 1990s it expanded into methamphetamine. After regulations made it more difficult to manufacture large quantities of meth in the United States, Sinaloa ordered precursor chemicals by the boatload from India and China to supply its own Mexican superlabs.
Even the heroin that isn't grown by the Sinaloa Cartel is likely being smuggled by it. The orange areas in this map show the cartel's sphere of influence in the United States:
The cartel's evolution shows how the legalization of pot has taken business away from criminal syndicates. But it also suggests that the cartels will continue to thrive amid the prohibition of other popular drugs. "It's a reality that drugs destroy," Guzmán told actor Sean Penn shortly before his capture. "Unfortunately, as I said, where I grew up, there was no other way and there still isn't a way to survive, no way to work in our economy to be able to make a living."
It's well known that America's wealthiest have been getting richer at the expense of the middle class. But the trend looks even starker when you look at the racial aspects. According to a new report from the Institute for Policy Studies, the combined wealth of those on the Forbes 400 list of America's richest dwarfs that of the nation's entire black or Latino populations.
The report found that the 100 richest US citizens control about as much wealth as all of the nation's 42 million African Americans. The total wealth of the nation's 55 million Latinos stacks up to that of the 186 richest Americans.
The average white family today has net assets of $141,900, compared with just $11,000 for black families.
This can be explained in part by the rapid erosion of the black and Latino middle classes. African Americans' net worth relative to whites has fallen by more than half since 2000: The average white family today has net assets of $141,900, compared with just $11,000 for black families—about the same paltry sum as back in 1985. Latinos have seen similar declines in net worth relative to whites.
There are many reasons for this slide: Black and Latino families were disproportionately exposed to risky subprime mortgages, had smaller amounts of inherited wealth, and were more susceptible to job and wage cuts during the Great Recession. And because these families are less likely than white families to own homes and stocks, they haven't benefited as much from the subsequent recovery.
America's stark inequality problem is evident in the Forbes 400 itself. Blacks and Latinos make up a combined 29 percent of the population but account for less than 2 percent of the Forbes list. Oprah Winfrey and the tech investor Robert Smith are the sole African Americans on the list, and just five on the list have Latino backgrounds. (They are Miami condo king Jorge Perez, billboard billionaire Arturo Moreno, and three heirs of the late Colombian beer magnate Julio Mario Santo Domingo, a major owner of the SABMiller empire.)
The dearth of black and Latino billionaires in the United States defies easy explanations, but one big factor may be Silicon Valley. The tech industry has minted more billionaires in recent years than any other sector of the economy. It also has a deeply entrenched diversity problem. According to census data, the proportion of Hispanic tech workers in Silicon Valley actually declined from 5 percent in 2000 to 4 percent in 2010—and the proportion of black techies fell from 3 percent to 2 percent. The Valley has begun to take diversity a little more seriously, but it could be another generation or more before it produces a black Mark Zuckerberg or a Latino Sergey Brin.