Uber and Lyft drivers are suing New York State over unemployment benefits.
Four Uber and Lyft drivers, along with an advocacy group called the New York Taxi Workers Alliance, have filed a complaint in federal court against Gov. Andrew M. Cuomo and the state’s Department of Labor, saying the state illegally failed to pay benefits to drivers in a timely way.
The lawsuit says drivers must wait months to receive unemployment benefits, if they receive them at all, compared with the two to three weeks that the state has said is typical for other workers. The plaintiffs are seeking an injunction requiring the state to immediately pay their benefits and the benefits of other drivers to whom they are owed.
Some drivers are being directed to a federal pandemic relief program intended for contractors, even though the state considers them employees and conventional unemployment benefits would pay them far more. According to the lawsuit, a key problem is that the state has not forced Uber and Lyft to provide the data on workers’ earnings that employers must typically supply.
An Uber spokesman said the company had provided the state with the earnings data it had requested, though he declined to elaborate on whether the data would be sufficient to calculate unemployment benefits promptly. Lyft said the company was working with the state to provide access to earnings data.
Jack Sterne, a spokesman for the Cuomo administration, said, “During this pandemic emergency, we have been moving heaven and earth to get every single unemployed New Yorker their benefits as quickly as possible — including Uber and Lyft drivers.”
The stock trading floor of the New York Stock Exchange reopened on Tuesday, though at a reduced head count in order to allow space for social distancing measures to remain in force. Gov. Andrew M. Cuomo rang the opening bell to mark the start of trading at 9:30 a.m.
Floor brokers and trading floor officials will be allowed back, while designated market makers — the specialist traders who buy and sell in order to “make markets” in certain securities — will continue to operate remotely.
Those who are returning must comply with a number of restrictions to regain access to the floor including avoiding public transportation, submitting to temperature checks upon entry and wearing a face mask. They will also be expected to maintain a six-foot social distance and avoid physical contact such as shaking hands.
The ability to trade electronically muted the market impact of the more than two-month shuttering of the trading floor, one of the most significant disruptions to the floor operations of the exchange since 1914, when it was closed for about four months as the United States entered World War I.
Back then, the exchange floor was the only way to trade shares listed on the exchange. But floor volume fell from around 70 percent of all New York Stock Exchange trading activity in the early 1990s to less than 20 percent, academic studies have found.
But even that likely overstates the impact of the floor. Over the past decade, the New York Stock Exchange’s share of American stock trading has fallen from 80 percent to about 24 percent, with trading in U.S. stocks now shared by 12 public exchanges and many more nonpublic venues.
That means that the share of stock that actually is touched by the New York Stock Exchange’s flesh-and-blood traders is quite small — as little as 1 percent, according to one recent study.
Americans are feeling worse about the present but slightly better about the future than they did a month ago, according to a survey by the Conference Board.
After two months of decline as the coronavirus pandemic forced widespread lockdowns, the board’s index of consumer confidence rose slightly this month in a preliminary reading as “the gradual reopening of the economy helped improve consumers’ spirits,” the research group said Tuesday.
“While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads,” said Lynn Franco, the board’s senior director of economic indicators.
The share of those surveyed saying business conditions are good decreased to 16.3 percent from 19.9 percent, while those saying conditions are bad increased to 52.1 percent from 45.3 percent. But 43.3 percent said they expected business conditions to improve over the next six months, up from 39.8 percent, while those expecting a decline decreased to 21.4 percent from 25.1 percent.
Wall Street’s focus was on economic recovery Tuesday, and stocks rallied along with crude oil prices.
The S&P 500 rose nearly 2 percent, with shares of companies most likely to benefit from the lifting of restrictions on travel and commerce faring well. Shares of Delta Air Lines, United Airlines and other big carriers rose, as did Marriott International.
Oil prices have been climbing all month as the restarting of factories and resumption of travel raised expectations that demand would rise. On Tuesday, West Texas intermediate crude rose another 1 percent, and shares of companies in the energy industry like Chevron and Halliburton, were also higher.
It’s been a turbulent period for stocks, with the S&P 500 alternating between gains to losses on a daily basis last week, as expectations for an eventual recovery from the coronavirus pandemic have squared off against the reality that the damage is still severe and likely to continue for some time.
News of progress on vaccine development — even if small scale and early stage — has been one factor fueling the gains.
Tuesday was no exception, after the biotech company Novavax said on Monday that it was starting trials of its vaccine on humans, with preliminary results expected in July. On Tuesday, the pharmaceutical giant Merck said it bought the rights to develop a potential drug that has “potent antiviral properties against multiple coronavirus strains,” and was also beginning work on vaccine candidates.
The reopening of businesses has been another. One largely symbolic opening on Tuesday was that of the New York Stock Exchange’s trading floor. A small number of traders were returning to the floor on, wearing masks and following social-distancing rules, the exchange said.
Shares in Europe and Asia were also higher on Tuesday, as investors shrugged off negative news like rising tensions between the United States and China and the combustible political situation in Hong Kong. Instead, they focused on Japanese leaders gradually lifting emergency measures there, while European leaders have also moved to ease travel restrictions.
But any gains are susceptible to a sudden change in sentiment if the reopenings result in new outbreaks or fresh concerns about the longevity of economic slowdown emerge.
Here’s the business news to watch this week.
💾 Software companies that have benefited from the shift to remote working are expected to report robust earnings: Box and Workday on Wednesday, and Salesforce and Zscaler on Thursday.
🚀 The first manned SpaceX flight is scheduled for a Wednesday launch from the Kennedy Space Center in Florida. The Falcon 9 rocket will ferry two astronauts to the International Space Station, the culmination of a 10-year effort to restart America’s space program.
🛍😀 Pandemic shopping habits have been good for retailers like Costco, Dollar General and Dollar Tree, which all report earnings on Thursday.
🛍😱 Shutdowns have been less kind to clothing and accessory retailers like Ralph Lauren, which reports earnings on Wednesday, and Abercrombie & Fitch, Burlington Stores, Nordstrom and Ulta Beauty, which release results on Thursday.
⚖️ A judge in Vancouver is to announce on Wednesday whether Meng Wanzhou, the C.F.O. of Huawei, can be extradited to the United States to face fraud charges. She was arrested in Canada in December 2018.
The European Central Bank warned Tuesday that the pandemic could create huge aftershocks in the financial system, destabilizing banks as well as highly indebted corporations and governments.
Banks have so far withstood the crisis, largely because regulators forced them to reduce their reliance on borrowed money following the financial crisis and recession in 2008, the central bank said in its annual survey of the health of the eurozone financial system.
But it’s too early to sound the all-clear, the report said. Eurozone banks are plagued by low profitability and the stock market values them at only one-third the book value of their assets. Lenders such as BBVA in Spain or Société Générale in France reported big losses for the first quarter of 2020 while others like Deutsche Bank were just barely profitable.
The central bank praised governments for quickly deploying tax cuts and other measures to help businesses and consumers survive loss of income. But the central bank also warned that the economic stimulus will leave governments with much higher debt that could be a major burden in the future.
The Department of Health and Human Services has disbursed $72 billion in grants since April to hospitals and other health care providers through a program that was part of the CARES Act economic stimulus package. The money was intended to prevent them from capsizing during the coronavirus pandemic.
So far, the riches are flowing in large part to hospitals that had already built up deep financial reserves to help them withstand an economic storm. Smaller, poorer hospitals are receiving tiny amounts of federal aid by comparison.
This spring, Providence Health System, one of the country’s largest and richest hospital chains, received at least $509 million in government funds, one of many wealthy beneficiaries of a bailout. A Providence spokeswoman said the grants helped make up for losses from the coronavirus.
Twenty large recipients, including Providence, have received a total of more than $5 billion in recent weeks, according to an analysis of federal data by Good Jobs First, a research group. Those hospital chains were already sitting on more than $108 billion in cash, according to regulatory filings and the bond-rating firms S&P Global and Fitch.
By contrast, hospitals that serve low-income patients often have only enough cash on hand to finance a few weeks of their operations.
California has an estimated unemployment rate above 20 percent, according to Gov. Gavin Newsom — far higher than the 14.7 percent national rate. In Los Angeles, with movie productions shut down, theme parks padlocked and hotels empty, things are even worse: The jobless rate has reached 24 percent, roughly equal to the peak unemployment of the Great Depression, in 1933.
“Economic free fall” is how Tom Steyer, the former presidential candidate, described it. He is leading the state’s economic recovery task force, a group of business leaders, labor activists, economists and former governors who have begun plotting a way out.
With a gross domestic product larger than 25 states combined, California’s pace of recovery has significant implications for the future of the United States. After 2008, California helped lead the nation in economic growth and job creation, powered by Silicon Valley, which remains relatively resilient.
But this time the pain is shared across a much broader area of the economy, including rotten strawberries in fields along the Pacific Coast, the empty wine-tasting rooms of Napa Valley and the deserted campuses of the nation’s largest public university system.
“I’d say this will be the most serious economic dislocation that America has faced,” said Jerry Brown, the governor of California until 2019, who left office with billions in the state’s rainy day fund. “The response should be a Rooseveltian intervention and effort to mobilize the economy the best way we can.”
For millions of college students, internships can be a steppingstone to full-time work, a vital source of income and even a graduation requirement.
Students who had locked down internships as early as September are now jobless. Others who had hoped to experience an office setting for the first time are instead looking for work at fast-food restaurants. Many low-income undergraduates, already saddled with student loans, are concerned that a jobless summer could put them at a disadvantage in future application cycles, making it harder to find full-time work after graduation.
“I feel like I had such a strong plan,” said Lydia Burns, whose internship at a nonprofit organization in Washington was canceled. “I knew what I was going to do — I had been working for it all of college. Now I don’t know what I’m going to do.”
Some companies are continuing to pay interns to work from home, sending corporate laptops in the mail and holding get-to-know-you sessions over Zoom. But students fear that remote internships will not afford the networking opportunities that can make spending a summer in an office so valuable, especially for interns who have few professional contacts.
Catch up: Here’s what else is happening.
Latam, the largest airline in Latin America, said on Tuesday it had filed for bankruptcy protection, the latest carrier to fall victim to the pandemic. The company, based in Santiago, Chile, said it had secured $900 million in financing from major shareholders, including the Cueto and Amaro families and Qatar Airlines, and that it would work with creditors to reduce its debt while it continues operating. Avianca, Colombia’s flagship airline and one of the world’s oldest carriers, filed for bankruptcy protection earlier this month.
Hertz, which started with a fleet of a dozen Ford Model T’s a century ago and became one of the world’s largest car rental companies, filed for bankruptcy protection late Friday after falling victim to its mountain of debt. Hertz said that it would use more than $1 billion in cash on hand to keep its business running while it proceeds with the bankruptcy process. The bankruptcy filing excludes operations in Australia, Europe and New Zealand as well as the company’s franchisee locations.
Reporting was contributed by Elizabeth Paton, Jack Ewing, Jason Karaian, Matt Phillips, Noam Scheiber, Jesse Drucker, Jessica Silver-Greenberg, Kevin McKenna, Sarah Kliff, Tim Arango, Thomas Fuller, Niraj Chokshi, Mohammed Hadi, Julie Creswell, Neal E. Boudette, David Yaffe-Bellany and Kevin Granville.