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TRANSPORTATION

Gig workers try to block new Calif. law

Ride-hail and delivery drivers are suing to invalidate the California ballot measure approved in November that declared them independent contractors. The Service Employees International Union and a group of drivers for Uber Technologies Inc., Lyft Inc., DoorDash Inc., and Instacart Inc. filed a petition Tuesday in the California Supreme Court, claiming that Proposition 22, the measure the gig companies spent $200 million to place on the ballot and get approved by voters, violates the state’s constitution. The measure designates app-based drivers as contractors under state law — rather than employees entitled to protections like sick pay and worker’s compensation — though it provides for some alternative benefits. It also prohibits the legislature from making amendments without at least seven-eighths support, including by passing laws letting unions negotiate on behalf of drivers. The drivers argue that Proposition 22 unconstitutionally usurps the legislature’s authority over worker’s compensation, as well as the judiciary’s authority to dictate what counts as an “amendment” to a ballot measure. They also claim that the measure violates the constitutional requirement that each measure be limited to a single subject. — BLOOMBERG NEWS

ECONOMY

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IRS gets more relief payments out after earlier delays

The Internal Revenue Service said that after initial problems, it is getting more of the second round of relief payments to taxpayers. The government began distributing the payments, worth $600 per eligible adult and dependent, at the end of December. But many people who filed their taxes with an online preparation service initially found that their payment did not make it to them directly. That is because money may have been sent to a temporary bank account established by the tax preparer, which is no long active. By law, the financial institution must return payments sent to closed or inactive accounts. The National Consumer Law Center estimates up to 20 million Americans may have been affected by the administrative issue. A number of tax preparation companies said that they were able to resolve the issues. H&R Block said its customer payments were processed as of Jan. 6. Aside from special cases, H&R Block said its customers should have received their payments already. TurboTax said that payments for customers affected by the error were deposited on Friday The IRS said Tuesday that it worked over the weekend to help a smaller set of impacted taxpayers and is reissuing payments for eligible taxpayers whose accounts may have been closed. — ASSOCIATED PRESS

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AVIATION

Beleagured plane maker sees uptick

Boeing Co. got a bump in orders and deliveries of new planes in December, but it wasn’t enough to salvage a poor year for the big aircraft maker. Chicago-based Boeing still reported more cancellations than new orders for its 737 Max jet, which was grounded for 21 months after crashes in Indonesia and Ethiopia killed 346 people. Boeing finished 2020 with 157 deliveries, down from 380 deliveries in 2019. Deliveries are crucial because aircraft makers get much of their cash when planes are delivered. Short on cash during the Max grounding, Boeing has borrowed billions and cut thousands of jobs to reduce costs. The Federal Aviation Administration’s decision in November to approve changes to a flight-control system on the Max allowed Boeing to resume shipping previously built Maxes to airline customers. Boeing delivered 39 planes in December, including 28 Maxes, of which 10 went to American Airlines and eight to United Airlines. However, Boeing also reported canceled orders for 105 Max planes, all but five by leasing companies that fear it will be difficult to find operators to take the planes. Boeing said it has a backlog of nearly 3,300 unfilled orders for the Max and about 4,200 for all planes, including cargo freighters. — ASSOCIATED PRESS

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GOVERNMENT

Census warned on cyber security

A watchdog agency for the US Census Bureau says that proper information-technology security safeguards weren’t in place leading up to the start of the 2020 census last year, but the statistical agency disputes some of the findings and says no data was compromised. There were a significant number of IT risks that remained open before the start of the head count of every US resident, according to the report issued last week by the Office of Inspector General. The Census Bureau was able to remedy somesecurity deficiencies after they were pointed out by the Office of Inspector General, and others were corrected right before most US residents began answering the 2020 census questionnaire in March, the report said. “The integrity of census data is crucial,” the report said. “If population numbers were manipulated, representation in the House of Representatives and federal money distribution could be disproportionately distributed.” The Census Bureau said there had been no loss or compromise of data and that the gaps identified by the Office of Inspector General were fixed before most households began responding in March. — ASSOCIATED PRESS

AUTO INDUSTRY

On trial over diesel scandal, former Audi CEO blames engineers

Former Audi chief executive Rupert Stadler, on trial over charges related to Volkswagen AG’s diesel scandal, blamed engineers for his failure to uncover widespread cheating on emissions tests. Stadler told a Munich court that engineers gave the management board at the VW group’s luxury-car unit insufficient information to detect the fraud. The 57-year-old is the first of several high-ranking VW executives to go on trial in Germany over the diesel scandal, which has cost the company at least $39 billion. A separate trial is scheduled to start against former VW CEO Martin Winterkorn, 73, and other suspects in the city of Braunschweig next month. Stadler’s testimony stuck close to the standard corporate defense that any engine manipulation was the fault of a group of rogue engineers. He told the court that instead of coming clean, like their counterparts at VW after the cheating was uncovered in September 2015, leading Audi engineers still pursued “a ­salami tactic” to get around internal scrutiny. He said that meant the engineers disclosed only slices of information, rather than giving the full picture. Stadler is accused of failing to stop the sale of affected diesel cars in Europe even after US authorities uncovered the engine-rigging to bypass emission tests. — BLOOMBERG NEWS

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FINANCIAL

Court overturns bank exec charges

A federal appeals court has overturned the convictions of four former executives for the only financial institution to be criminally charged in connection with the federal bank bailout program. A three-judge panel on Tuesday reversed the convictions of the former Wilmington Trust executives for making false statements to federal regulators and ordered that acquittals be entered. The court also ordered a retrial of conspiracy and securities fraud charges. The ruling marks a stunning reversal in the government’s case against former Wilmington Trust president Robert Harra Jr., former chief financial officer David Gibson, former chief credit officer William North, and former controller Kevyn Rakowski. They were convicted in 2018 of fraud, conspiracy, and making false statements. The bank itself was also criminally charged but reached a $60 million settlement with prosecutors just as a trial was set to start. Prosecutors alleged that in the wake of the 2008 financial crisis, the executives misled regulators and investors about Wilmington Trust’s massive amount of past-due commercial real estate loans before the bank was hastily sold in 2011 while bordering on collapse. Founded by members of the DuPont family in 1903, the bank imploded despite receiving $330 million from the Troubled Asset Relief Program. — ASSOCIATED PRESS

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REAL ESTATE

Office vacancy rate in San Francisco higher than during 2008 crisis

San Francisco’s office market is being hit so hard by the pandemic that, by some measures, it’s worse than the global financial crisis or dot-com collapse. The city’s office-vacancy rate reached 16.7 percent at the end of 2020, up 11 percentage points from a year prior, according to a report from commercial real estate brokerage Cushman & Wakefield. That’s a higher level than in the aftermath of the 2008 recession. The vacancy rate is being driven by a record amount of sublease space, which has surpassed the worst of the dot-com bust two decades ago, said Robert Sammons, senior director of research at Cushman in San Francisco. In addition, new leasing has effectively been on pause and hit the lowest annual level in 2020 since at least the early 1990s. Companies have been reevaluating their office needs after months of pandemic lockdowns showed them that it was possible to function with employees working from home. That’s caused a spike in vacancies, especially in cities like New York and San Francisco, where the cost of renting space is higher. The technology companies that dominate the Bay Area, in particular, have embraced remote work. Pinterest Inc. last year paid almost $90 million to cancel a large San Francisco office lease, saying it is rethinking where employees are based. Oracle Corp. and Hewlett Packard Enterprise Co. are relocating their headquarters from Silicon Valley to Texas, the latest in a string of departures from the pricey region. ― BLOOMBERG NEWS