The Wild Wild Web

High-tech perks and quirks: IRS says ‘no such thing as a free meal’; Uber lifts Lyft drivers; court says it’s OK for Yelp to manipulate reviews

Uber’s agressive anti-Lyft campaign.

Google employees can choose from more than 30 cafes serving mouthwatering cuisine (they see it as a perk; Google execs see it as a way to keep them from leaving the Googleplex), and it’s all free. Nate Keller, Google’s former head chef, said that at one point Google was serving more than 40,000 gourmet meals per day and spending $80 million a year on food. The bill for chicken alone was $1 million per month. That was 2008, so costs are likely much higher now.

It’s probably safe to say that Google spends nearly $100 million a year feeding wealthy techies, which seems absurd to me — and I’m not alone. Routine audits show that the Internal Revenue Service has begun classifying gratis meals as taxable fringe benefits. While employees could be liable for back taxes on food they’ve eaten, the IRS is more likely to go after the companies, which may have to pay 30-percent of the meals’ fair market value in tax.

While taxing the perks makes sense businesswise, what makes more sense to me is turning the experience into a humanitarian effort by charging the employees a donation for their meals, and then donating the money to food banks. The meals become charitable write-offs, which solves the tech companies’ tax woes; the workers — who can easily afford to pay — know they’re doing a good thing; and best of all, Bay Area food bank shelves won’t be empty as they have been throughout this latest tech boom.

Another perk for tech company workers, shuttle buses (or, as I like to call them, “rolling cubicles”), may make their lives easier, but life for the drivers is anything but. In a series of articles in USA Today, Facebook drivers told of working marathon days for low pay and having to do split shifts — one in the morning and one in the evening — while not being paid for the hours in between. Drivers are not permitted to take another job during their down time, so they sleep sitting up in break room chairs or in the front seats of their cars.

Teamsters official Rome Aloise wrote to Facebook CEO Mark Zuckerberg to encourage his shuttle contractor to allow drivers to bargain for a fair contract. “It is reminiscent of a time when noblemen were driven around in their coaches by their servants,” Aloise told Zuckerberg. “Frankly, little has changed; except the noblemen are your employees, and the servants are the bus drivers who carry them back and forth each day.” According to USA Today, studies show that the nationwide trend of outsourcing these positions has led to “declining wages, eroding health and safety conditions and a lower standard of living for workers, most of whom are black and Hispanic.”

According to The Verge, ride-sharing start-up Uber is “arming teams of independent contractors with burner phones and credit cards as part of its sophisticated effort to undermine Lyft and other competitors.” In an analysis by Lyft in which they cross-referenced the phone numbers of users who tried to recruit drivers to Uber with users who had previously canceled rides, Uber (well known for its ruthless tactics) ordered and then canceled 5,560 Lyft rides. In New York, the contractors (called “brand ambassadors”) use Uber-provided iPhones and credit cards to hail rides with Lyft and attempt to sign the drivers with Uber. As the ride-sharing landscape becomes more competitive, it’s inevitable that some won’t survive, and Uber wants to make sure they’re the last one driving, no matter how nasty and devious they have to be.

Online review site Yelp must possess naked photos of a lot of judges because, despite ample evidence of review manipulation and extortion-like tactics for advertising sales, the courts keep siding with them. In September, the Ninth U.S. Circuit Court of Appeals ruled that even if Yelp did manipulate reviews to penalize businesses, the practice doesn’t constitute extortion. Businesses do not have a right to positive reviews on Yelp, the court said, and Yelp can seek payments for advertising — even if their tactics are perceived as bullying.

“The business owners may deem the posting or order of user reviews as a threat of economic harm, but it is not unlawful for Yelp to post and sequence the reviews,” Judge Marsha Berzon wrote for the three-judge panel. “As Yelp has the right to charge for legitimate advertising services, the threat of economic harm that Yelp leveraged is, at most, hard bargaining.”

Hard bargaining? It’s a lot more than that, according to many small business owners I’ve spoken to, and it’s just too coincidental that all of the stories are identical: a Yelp ad rep calls and pushes them to advertise; they decline; suddenly good reviews disappear and bad reviews float to the top. In 2013, a small-claims judge in San Diego likened Yelp to “a modern-day version of the Mafia going to stores and saying, ‘You want to not be bothered? You want to not have incidents in your store? Pay us protection money.'”

And Yelp’s legal troubles are far from over: They’re currently battling two lawsuits filed by investors who allege the company’s stock traded at artificially inflated prices because they “tried to sell services designed to suppress negative reviews or make them go away” and then lied about it.

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