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Gig drivers strike in L.A. and other major cities, hoping to disrupt Valentine's Day business

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Gig drivers strike in L.A. and other major cities, hoping to disrupt Valentine's Day business

Los Angeles Lyft driver Shan Sedigh held out his phone. On the screen, Lyft’s app detailed a Feb. 9 ride for which Sedigh’s passenger paid $105.40. Sedigh earned a little more than half of that at $53.11.

“This is why I’m here,” Sedigh said, surrounded by scores of ride and food delivery drivers Wednesday as they protested outside an Uber drivers support hub in Westlake, west of downtown Los Angeles, part of a one-day work stoppage to demand better wages.

“I pay gas, insurance, repairs,” the 50-year-old West Hills resident said. “Lyft just connects the driver to the customer. Why do they get 50%?”

The one-day strike hit more than 20 major cities across the U.S. and Canada, including Los Angeles. Food delivery drivers in London joined in, vowing to turn off the apps between 5 and 10 p.m., according to the Associated Press. The action targets what is typically a busy holiday for ride-hailing and delivery giants.

Although there have been sporadic, isolated protests by drivers in various cities in recent years, organizers say the Valentine’s Day protest could be the most ambitious labor action to date, with drivers across the country coalescing organically.

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Drivers are protesting what they describe as poor wages and rapidly shrinking transparency in how the companies pay drivers their share of earnings.

California gig law Proposition 22 — which was established by a voter initiative bankrolled by Uber, Lyft, DoorDash and other companies in 2020 — has hurt drivers, said Nicole Moore, a driver and the president of Rideshare Drivers United, the 20,000-member Los Angeles group coordinating local drivers.

The law promised some benefits to drivers — including a minimum earnings guarantee and healthcare reimbursement — but they have proved difficult to access or so minimal as to be useless, she said.

Drivers have complained that companies track their behavior on the apps to determine what the companies will pay the drivers, and the workers’ only power is to accept or decline a job.

Rideshare Drivers United protest in front of the Uber Greenlight Hub in Los Angeles.

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(Jason Armond/Los Angeles Times)

“It’s a shell game and there’s no way to enforce this stuff because it’s all an algorithm in a black box — how we’re paid and whether or not we get benefits,” Moore said.

Gig drivers group Justice for App Workers told the Associated Press that thousands of drivers had stopped working at some point Wednesday, with protests at airports in cities including San Francisco, Chicago, Miami and Newark, N.J.

Uber and Lyft representatives dismissed any effect from the strike.

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“These types of events have rarely had any impact on trips, prices or driver availability,” Uber spokesperson Zahid Arab said in an email. “During last year’s Valentine’s Day ‘strike,’ we saw an increase in trips in the U.S.”

Lyft spokesperson CJ Macklin said that “traditionally, these events have not had a meaningful impact on wait times or service levels.” As of Wednesday afternoon, the company had not noticed any significant disruptions, he said.

Drivers interviewed at the Wednesday protest in Los Angeles said that about a year ago companies began showing drivers their rates offered on rides, giving them the option to accept or decline, but around the same time appeared to offer fewer well-paying longer rides, leaving them with shrinking earnings.

Frank Kash, 30, waved a sign reading, “Corporate Lies Are No Surprise.” Scrawled across the sign in Farsi was an expletive aimed at Uber Chief Executive Dara Khosrowshahi, who, like Kash, is Persian.

“He is basically stealing from us,” Kash said. “Khosrowshahi, you owe me money.”

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For an Uber trip he drove Tuesday, Kash said he earned $24; the customer told Kash he paid about $60, making Kash’s earnings about 40% of the fare.

“It’s a shame,” he said.

Macklin said Lyft made new commitments this month to increase driver pay and transparency. They include providing a clearer summary of the “new minimum earnings guarantee that drivers will always make at least 70% of the weekly rider fares after external fees,” he said.

He said the company is also providing a new in-app button for drivers to appeal deactivation decisions and providing direct access to a specialized support team focused on appeals. Drivers have complained that the apps haphazardly shut down their account access, and that the decisions are difficult to get reversed.

“We are constantly working to improve the driver experience,” Macklin said in an email.

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Of concerns raised by drivers, Uber spokesperson Arab said the “vast majority of drivers are satisfied.”

He disputed that drivers’ take of fares represented a small portion relative to Uber’s and said the company has made significant investments in driver benefits afforded by Proposition 22, investing more than $800 million since January 2021.

“Uber’s effective take rate in the U.S., net of commercial insurance costs, is well below 20%,” he said. “Every driver on the Uber platform benefits from the historic protections and benefits afforded by Prop. 22.”

Uber said its U.S. drivers earn an average of $33 an hour, while Lyft said its U.S. drivers make an average of $30.68 an hour, or $23.46 per hour after expenses.

Rideshare Drivers United demonstrated in front of the Uber Greenlight Hub on Valentines Day in Los Angeles.

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(Jason Armond/Los Angeles Times)

Drivers held isolated protests over the last year in various cities, including Chicago, Las Vegas, Denver, New Orleans, Los Angeles, Minneapolis, Miami and Tampa. Most recently, drivers protested at airports in San Diego and Atlanta in December.

Luis Arias, 32, who has driven for Uber and Lyft since 2017, said he had never participated in driver protests before December.

But long workdays and shrinking earnings prompted him to help organize recent protests at San Diego Airport. Drivers protested at the airport’s waiting lot on Dec. 19 and marched to Terminal 2 in a Dec. 23 action.

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“We have to work too many hours to get the money, and we spend a lot of money on gas, on car services. It feels very unfair,” Arias said.

Nascent organizing among San Diego drivers is gaining traction, he said. About 100 drivers participated in the first protest; now, the informal San Diego group has grown to some 600 members, Arias said.

At the Los Angeles rally, driver Teresa Pitt addressed the crowd from atop a pickup truck, calling on gig workers to push the companies for more.

“There should be drivers lined up this whole street,” she said.

Some drivers sporting neon-green “Rideshare Drivers United” shirts held signs themed to the holiday: “It’s time for a break up with Uber and Lyft,” read one, with a graphic of a red broken heart.

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By about 2p.m., the group of about 100 protesters had thinned out. Some left to head over to Los Angeles International Airport, where another driver protest was scheduled to be held later in the afternoon, while others left for their other day jobs.

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Startup Varda Space Industries snags former Mattel plant in El Segundo

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Startup Varda Space Industries snags former Mattel plant in El Segundo

In an expansion of its business of processing pharmaceuticals in Earth’s orbit, Varda Space Industries is renting a large El Segundo plant where toy manufacturer Mattel used to design Hot Wheels and Barbie dolls.

The plant in El Segundo’s aerospace corridor will be an extension of Varda Space Industries’ headquarters in a much smaller building on nearby Aviation Boulevard.

Varda will occupy a 205,443-square-foot industrial and office campus at 2031 E. Mariposa Ave., which will give it additional capacity to manufacture spacecraft at scale, the company said.

Originally built in the 1940s as an aircraft facility, the complex has a history as part of aerospace and defense industries that have long shaped the South Bay and is near a host of major defense and space contractors. It is also close to Los Angeles Air Force Base, headquarters to the Space Systems Command.

Workers test AstroForge’s Odin asteroid probe, which was lost in space after launch this year.

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(Varda Space Industries)

Varda is one of a new generation of aerospace startups that have flourished in Southern California and the South Bay over the last several years, particularly in El Segundo, often with ties to SpaceX.

Elon Musk’s company, founded in 2002 in El Segundo, has revolutionized the industry with reusable rockets that have radically lowered the cost of lifting payloads into space. Though it has moved its headquarters to Texas, SpaceX retains large-scale operations in Hawthorne.

Varda co-founder and Chief Executive Will Bruey is a former SpaceX avionics engineer, and the company’s spacecraft are launched on SpaceX’s workhorse Falcon 9 rockets from Vandenberg Space Force Base in Santa Barbara County.

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Varda makes automated labs that look like cylindrical desktop speakers, which it sends into orbit in capsules and satellite platforms it also builds. There, in microgravity, the miniature labs grow molecular crystals that are purer than those produced in Earth’s gravity for use in pharmaceuticals.

It has contracts with drug companies and also the military, which tests technology at hypersonic speeds as the capsules return to Earth.

Its fifth capsule was launched in November and returned to Earth in late January; its next mission is set in the coming weeks. Varda has more than 10 missions scheduled on Falcon 9s through 2028.

For the last several decades, the Mariposa Avenue property served as the research and development center for Mattel Toys. El Segundo has also long been a center for the toy industry as companies like to set up shop in the shadow of Mattel.

The Mattel facility “has always been an exceptional property with a legacy tied to aerospace innovation, and leasing to Varda Space Industries feels like a natural continuation of that story,” said Michael Woods, a partner at GPI Cos., which owns the property.

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“We are proud to support a company that is genuinely pushing the boundaries of what’s possible, and are excited to watch Varda grow and thrive here in El Segundo,” Woods said.

As one of the country’s most active hubs of aerospace and defense innovation, El Segundo has seen its industrial property vacancy fall to 3.4% on demand from space companies, government contractors and technology startups, real estate brokerage CBRE said.

Successful startups often have to leave the neighborhood when they want to expand, real estate broker Bob Haley of CBRE said. The 9-acre Mattel facility was big enough to keep Varda in the city.

Last year, Varda subleased about 55,000 square feet of lab space from alternative protein company Beyond Meat at 888 Douglas St. in El Segundo, which it started moving into in June.

Varda will get the keys to its new building in December and spend four to eight months building production and assembly facilities as it ramps up operations. By the end of next year, it expects to have constructed 10 more spacecraft.

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In the future, Varda could consolidate offices there, given its size. Currently, though, the plan is to retain all properties, creating a campus of three buildings within a mile of one another that are served by the company’s transportation services, Chief Operating Officer Jonathan Barr said.

“We already have Varda-branded shuttles running up and down Aviation Boulevard,” he said.

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How Iran War Is Threatening Global Oil and Gas Supplies

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How Iran War Is Threatening Global Oil and Gas Supplies

Ships near the Strait of Hormuz before and after attacks began

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Note: Times shown are in Iran Standard Time. Some ships in the region transmit false positions and others sometimes stop broadcasting their locations, and may not be reflected in the animation. Ships with sparse location data are shown in a lighter shade. Source: Kpler and Spire.

Every day, around 80 oil and gas tankers typically pass through the Strait of Hormuz, the narrow waterway off Iran’s southern coast that carries a fifth of the world’s oil and a significant amount of natural gas.

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On Monday, just two oil and gas tankers appear to have crossed the strait, according to a New York Times analysis of shipping activity from Kpler, an industry data firm. Since then, one tanker passed through.

“It’s a de facto closure,” said Dan Pickering, chief investment officer of Pickering Energy Partners, a Houston financial services firm. “You’ve got a significant number of vessels on either side of the strait but no one is willing to go through.”

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Tankers have been staying away from Hormuz since the U.S.-Israeli attacks on Iran that began on Saturday. A prolonged conflict could ripple broadly across the global economy, threatening the energy supplies of countries halfway around the world and stoking inflation.

International oil prices have climbed 12 percent since the fighting began, trading Tuesday around $81 a barrel, and natural gas prices have surged in Europe and in Asia.

A senior Iranian military official threatened on Monday to “set on fire” any ships traveling through the Strait of Hormuz. Vessels in the region have already come under attack. Several oil and gas facilities have also been struck or affected by nearby shelling, though the damage did not initially appear to be catastrophic.

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Where ships and energy facilities have been damaged

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Note: Damage as of 2 p.m. Eastern time Tuesday. Source: Kpler, Kuwait National Petroleum Company, Saudi Arabian Ministry of Energy, Planet Labs, QatarEnergy, United Kingdom Maritime Trade Operations and Vanguard Tech.

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A fire broke out Tuesday at a major energy hub in Fujairah, United Arab Emirates, from the falling debris of a downed drone, the authorities said. On Monday, Qatar halted production of liquefied natural gas, or fuel that has been cooled so that it can be transported on ships, after attacks on its facilities.

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Facilities at Ras Tanura oil refinery in Saudi Arabia were on fire on Monday after two Iranian drones were intercepted, according to Saudi Arabia’s Ministry of Energy, causing fragments to fall. Vantor

The sharp reduction in tanker traffic is reducing the supply of oil and gas to world markets, pushing up prices for both commodities. And the longer that ships stay away from the Strait of Hormuz, the less oil and gas get out to the world, which could raise prices even more.

Shipping companies have paused their tankers to protect their crew and cargo, and because insurance companies are charging significantly more to cover vessels in the conflict area.

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On Tuesday, President Trump said that “if necessary,” the U.S. Navy would begin escorting tankers through the strait. He also said a U.S. government agency would begin offering “political risk insurance” to shipping lines in the area.

In addition to tankers, other large vessels regularly go through the strait, including car carriers and container ships. In normal conditions, nearly 160 make the trip each day.

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Some ships in the region turn off the devices that broadcast their positions, while others transmit false locations — making it hard to give a full picture of the traffic in the strait.

The Shiva is a small oil tanker that has repeatedly faked its location, according to TankerTrackers.com, which tracks global oil shipments. It is suspected of carrying sanctioned Iranian oil, according to Kpler. The Shiva was one of the two tankers that crossed the strait on Monday.

The oil and gas that typically move through the strait come from big producing countries like Saudi Arabia, Iraq, Iran and United Arab Emirates, and are exported around the world.

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Where tankers moving through the Strait have traveled

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Note: Tanker paths are since Jan. 1 and include all tankers and gas carriers. Source: Kpler and Spire.

In 2024, more than 80 percent of the oil and gas transported through the Strait of Hormuz went to Asia. China, India, Japan and South Korea were the top importers, according to the U.S. Energy Information Administration.

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Countries have energy stockpiles that could last them into the coming months, but a continued shutdown of the strait could damage their economies.

Several big disruptions have roiled supply chains in recent years, but the tanker standstill in the Strait of Hormuz could have an outsize impact.

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Paramount credit downgraded to ‘junk’ status over debt worries

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Paramount credit downgraded to ‘junk’ status over debt worries

Paramount Skydance’s jubilation over its come-from-behind victory to claim Warner Bros. Discovery has entered a new phase:

Call it the deal-debt hangover.

Two major ratings agencies have raised concerns about Paramount’s credit because of the enormous debt the David Ellison-led company will have to shoulder — at least $79 billion — once it absorbs the larger Warner Bros. Discovery, bringing CNN, HBO, TBS and Cartoon Network into the Paramount fold.

Fitch Ratings said Monday that it placed Paramount on its “negative” ratings watch, and downgraded its credit to BB+ from BBB-, which puts the company’s credit into “junk” territory. Fitch said it took action due to “uncertainty” surrounding Paramount’s $110-billion deal for Warner Bros. Discovery, which the boards of both companies approved on Friday.

S&P Global Ratings took similar action.

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To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.

“Potential credit risks include the prospective debt-funded structure, Fitch’s expectation of materially elevated leverage and limited visibility on post-transaction financial policy and capital structure,” Fitch said.

Late last week, Paramount sent $2.8 billion to Netflix as a “termination fee” to officially end the streaming giant’s pursuit of Warner Bros. That payment paved the way for Warner and Paramount’s board to enter into the new merger agreement.

Paramount hopes the merger will be wrapped up by the end of September. It needs the approval of Warner Bros. Discovery shareholders and regulators, including the European Union.

Paramount executives acknowledged this week the new company would emerge with $79 billion in debt — a considerably higher total than what Warner Bros. Discovery had following its spinoff from AT&T. That 2022 transaction left Warner Bros. Discovery with nearly $55 billion of debt, a burden that led to endless waves of cost-cutting, including thousands of layoffs and dozens of canceled projects.

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Warner still has $33.5 billion in debt, a lingering legacy that will be passed on to Paramount.

Paramount plans to restructure about $15 billion in Warner Bros. Discovery’s existing debt.

Paramount CEO David Ellison at a 2024 movie premiere for a Netflix show.

(Evan Agostini / Invision / AP)

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Paramount told Wall Street it would find more than $6 billion in cost cuts or “synergies” within three years — a number that has weighed heavily on entertainment industry workers, particularly in Los Angeles.

Hollywood already is reeling from previous mergers in addition to a sharp pullback in film and television production locally as filmmakers chase tax credits offered overseas and in other states, including New York and New Jersey.

Some entertainment executives, including Netflix Co-Chief Executive Ted Sarandos, have speculated that Paramount will need to find more than $10 billion in cost cuts to make the math work. More recently, Sarandos went higher, telling Bloomberg News that Paramount may need $16 billion in cuts.

Cognizant of widespread fears about additional layoffs, Paramount Chief Operating Officer Andrew Gordon took steps this week to try to tamp down such concerns.

Gordon is a former Goldman Sachs banker and a former executive with RedBird Capital Partners, an investor in Paramount and the proposed Warner Bros. deal. He joined Paramount last August as part of the Ellison takeover.

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During a conference call Monday with analysts, Gordon said Paramount would look beyond the workforce for cuts because the company wants to maintain its film and TV production levels.

Paramount plans to look for cost savings by consolidating the “technology stacks and cloud providers” for its streaming services, including Paramount+ and HBO Max, Gordon said. The company also would search for reductions in corporate overhead, marketing expenses, procurement, business services and “optimizing the combined real estate footprint.”

It’s unclear whether Paramount would sell the historic Melrose Avenue lot or simply centralize the sprawling operations onto the Warner Bros. and Paramount lots in Burbank and Hollywood.

Workers are scattered throughout the region.

HBO, owned by Warner Bros. Discovery, maintains its West Coast headquarters in Culver City; CBS television stations operate from CBS’ former lot off Radford Avenue in Studio City; and CBS Entertainment and Paramount cable channels executive teams are located in a high-rise off Gower Street and Sunset Boulevard, blocks from the Paramount movie studio lot.

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“The combination of PSKY and WBD could create a materially stronger business than either individual entity,” Standard & Poor’s said in its note to investors. “However, this transaction presents unique challenges because it would involve the combination of three companies, with the smallest, Skydance, being the controlling entity.”

David Ellison’s production firm, Skydance Media, was the entity that bought Paramount, creating Paramount Skydance.

Ellison has not announced what the combined company will be called.

Paramount shares closed down more than 6% Tuesday to $12.45.

Warner Bros. Discovery fell 1% to $28.20. Netflix added less than 1% to close at $97.70.

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