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A judge in California has ordered Uber and Lyft to reclassify their drivers as employees, in what would be the most significant blow yet to the gig economy model unless it is halted by an appeals court.
The ruling is a victory for California’s attorney-general, who is suing the ride-hailing companies along with the city attorneys-general of San Francisco, San Diego and Los Angeles.
The lawsuit seeks to enforce Assembly Bill 5, a Californian law that came into effect at the beginning of the year, which is designed to force gig economy companies to reclassify their workers as employees rather than independent contractors.
Uber is fighting a similar ruling in the UK, where it employs 60,000 drivers. Last month the company began an appeal in the UK supreme court to overturn the decisions of three lower courts, which all ruled in favour of 35 Uber drivers who claimed they work for the company and were entitled to the minimum wage as well as holiday pay.
The state of Massachusetts is also suing Uber and Lyft over the status of their drivers and Canada’s supreme court recently dismissed an Uber appeal, paving the way for a class-action lawsuit to give drivers employment benefits.
Uber and Lyft have 10 days to appeal against the California court decision. (FT)
Russia has become the first country to grant regulatory approval to a Covid-19 vaccine, President Vladimir Putin said on Tuesday. Joko Widodo, the Indonesian president, attended the phase-three clinical trials for a Chinese vaccine.
New Zealand has reported its first coronavirus cases outside of quarantine facilities in more than 100 days, prompting the government to order the lockdown of Auckland. Singapore’s second-quarter GDP contracted 13.2 per cent year on year.
England’s army of contact tracers will be assigned to local authorities this month as the government abandons its centralised “test and trace” strategy.
Donald Trump is weighing new rules to temporarily block citizens and residents suspected of having coronavirus from returning to the US. Large New York employers pledged to hire 100,000 students from disadvantaged communities. Coronavirus infections among US children grew 40 per cent in the last half of July, according to a new report.
The EU’s plan to issue €750bn of bonds to fund its recovery poses no threat to the bloc’s triple A credit rating, the biggest agencies said.
Eastman Kodak shares plunged 30 per cent after the US paused a $765m loan pending a probe. A corporate junk bond hit a new yield low. (FT, NYT, Bloomberg)
The pandemic has created an opportunity to address inequalities in the US labour market, Megan Greene writes. Follow our live coverage here.
Should the furlough scheme be extended? Join Claer Barrett, personal finance editor, and Daniel Thomas, chief UK business correspondent, for a live video discussion at 12pm UK time on Tuesday August 11.
In the news
Belarus opposition leader leaves country Svetlana Tikhanovskaya has left the eastern European nation and is now in neighbouring Lithuania after rejecting the official results of the presidential election. In a video posted on YouTube she said she made the decision to leave to see her children, who she evacuated from Belarus after receiving threats. (FT)
Trump interrupted The US secret service shot a person outside the White House, Donald Trump said, shortly after he was abruptly pulled out of a press briefing. Meanwhile, far-right supporters of the US president have found a new digital home after a Reddit ban. (FT)
SoftBank rebounds from historic loss The Japanese technology conglomerate founded by Masayoshi Son posted a $12bn quarterly profit as a global tech rally lifted high-profile Vision Fund investments, including Uber and Slack. (FT)
McDonald’s sues former chief The fast-food chain has sued former chief executive Steve Easterbrook to recover severance payments, alleging he hid details of three sexual relationships with employees when the board fired him in November over a separate relationship with a subordinate. (FT)
Fed denies Goldman’s appeal against stress test results The Federal Reserve has turned down Goldman Sachs’ request for less onerous treatment after the results of its annual stress test, leaving the bank with the highest capital requirement among its large peers. Plus, a former top currency trader at Citigroup has won an unfair dismissal case against the bank. (FT)
Barry Diller’s IAC places $1bn bet on Las Vegas After accumulating a 12 per cent stake in the owner of casinos such as Aria, the Bellagio and Mirage, the media mogul said there was a “digital first opportunity within MGM Resorts’ already impressive offline businesses”. (FT)
Chicago restricts access after night of looting Authorities restricted access to the centre of Chicago on Monday after a night of looting, which led to 100 arrests and 13 police officers being injured. “This was an assault on our city that undermines public safety and breeds a sense of insecurity among our residents,” said Lori Lightfoot, the city’s Democratic mayor. (FT)
Lebanon government resigns Lebanon’s prime minister blamed “political corruption” for the massive blast at Beirut’s port last week as the government resigned on Monday. Security officials warned in July of the risk of an explosion, documents revealed. On returning to the country, Edward Asseily finds the reigning emotion is anger, not hopelessness. (FT, Reuters)
UK-Japan trade deal talks stall Talks between Tokyo and London over a trade deal have stalled as Liz Truss, UK trade secretary, insisted on a symbolic “win” for Stilton cheese. The sides were close to an agreement last week. (FT)
The days ahead
TikTok lawsuit TikTok is planning to file a federal lawsuit as early as Tuesday challenging Donald Trump’s executive order banning the service from the US. (NPR, FT)
Pompeo visits Europe The US secretary of state begins a weeklong trip to central Europe, as the US looks to confront Russian and Chinese economic and geopolitical competition in the continent. (Voice of America)
Iran UN vote The UN Security Council is preparing to vote this week on a US proposal to extend an arms embargo against Tehran, a move some diplomats expect to fail and endangering the 2015 nuclear deal. (Reuters)
What else we’re reading
Bolsonaro and the generals Since the end of a violent dictatorship three decades ago, Brazil’s armed forces have supported democratic institutions. But as Jair Bolsonaro comes under threat from criminal investigations and a floundering coronavirus response, the president is raising the prospect of a military intervention. (FT)
Tony Blair: Three priorities to beat coronavirus “Covid-19 is the toughest practical challenge for government I have ever seen,” former UK prime minister Tony Blair writes. But the worst stage of the pandemic lies ahead for poorer countries. Here’s how rich governments can help. (FT)
Starting a new business in a crisis Early this year, anyone launching a business or embarking on a significant career change collided head-on with a spectacular economic shock. The founders of fashion brand Saint and Sofia recount their experiences. (FT)
Modi and Erdogan thrive on divisions Narendra Modi is a Hindu nationalist; Recep Tayyip Erdogan is an Islamist. The leaders look like potential rivals in a clash of civilisations, writes Gideon Rachman, but they are pursuing mirror-image political projects. (FT)
Parlez-vous Macron? You don’t just have to speak French to understand the French president; you must speak Macron, a wordy dialect of philosophical musings and 17th-century syntax. Here’s a mini-lexicon of some preferred Macronisms. (Politico)
Saudi Aramco’s annus horribilis In December, the Saudi state oil giant was celebrating the world’s largest stock market listing. But 2020 has become its toughest year in decades, with the twin shocks of coronavirus and a crude price slump forcing Saudi Aramco to scale back its ambitions. (FT)
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Are we ready to return to the Underground? London’s Tube and the New York subway are piloting the use of ultraviolet light to disinfect stations and trains. But are riders ready, Michael Skapinker asks. Here’s what happens when you sneeze on the subway. (FT, NYT)
How life in our cities will look after the pandemic If fear of disease becomes the new normal, cities could be in for a bland and antiseptic future, perhaps even a dystopian one. Twelve leading global experts in urban planning, policy, history and health weigh in with their predictions of what urban life will look like after the pandemic. (FP)
Cartoon of the day
Banx: ‘Victory party’