(p. B3) New York ride-hailing business Juno USA LP filed for bankruptcy protection, blaming its demise on minimum wage regulations and mounting lawsuits from drivers, riders and competitors.
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Ride-hailing companies are grappling with efforts by several states to extend employment protections to gig workers. In the face of additional regulation, the ride-hailing industry has been consolidating and pushing back against government measures that could upend their business models.
Gett, which bought Juno in a $200 million equity-based deal, said the company’s demise stemmed from “misguided regulations” in New York City.
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Juno generated $269 million of revenue last year, a 23% annual increase, according to court papers. But this year its costs escalated after the city put in place a pay floor for ride-hail drivers.
The wage regulation pushed customer prices up by nearly 20%, bringing Juno’s rides per day down to 25,000 immediately before the chapter 11 petition from 47,000 per day in 2017.
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Juno also said it spent substantial money on legal fees to defend itself against lawsuits from drivers, riders and competitors alike that the company described as “opportunistic.”
Drivers have sued over unemployment insurance, saying they were employees rather than independent contractors, and over stock incentives.
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(Note: the online version of the story has the date Nov. 20, 2019, and has the title “Ride-Hailing App Juno Enters Bankruptcy, Blaming Wage Law.”)