NYC Sues Delivery App Over Lost Pay in Mamdani Crackdown

0:00Donald Trump is rewriting the Washington rulebook and reshaping the global economy. If you're trying to connect the dots behind the headlines, Bloomberg's Trumponomics podcast is here to help. I'm Stephanie Flanders, head of government and economics at Bloomberg. Every week, I'll bring you a smart, focused conversation with reporters and experts from Washington, Wall Street and beyond. Listen to new episodes every Wednesday and follow Trumponomics wherever you listen. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy.

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1:14All investing is subject to risk Vanguard Marketing Corporation Distributor. Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Of course, it is now only 15 days into the New York City Mayor Zoram Amdani's tenure, and he is making moves already. Alex, do you live in the city? I do. I'm a lifelong New Yorker. You're a lifelong New Yorker. So you feel it more than I do.

1:56I live in the suburbs along with John Tucker. Did you get your free bus service yet? Not yet. Still waiting for it. Still waiting. And free child care? I don't take the bus that often. Usually the train. So I don't think it'll directly impact me. Okay. But still waiting. Still waiting. Let's check in with Miles Miller. He is our senior reporter covering security, the National Desk, law enforcement, governments, and cities. And it's here where we want to talk to him because Miles is joining us from downtown Manhattan. And Miles, talk to us a little bit about what the new mayor, Zoram Amdani, is doing when it comes to work.

2:29He is cracking down on, you know, some companies and how they're treating workers. Yeah, you know, he's enlisted Lena Khan as an advisor, unpaid advisor to him, of course, known to the Bloomberg audience as a former FTC chair. In addition to that, Julie Su, who joined us on our fabulous Labor Fridays, right, the Fridays where we get the jobs report. And then in addition to that, Sam Levine, who was at the FTC running enforcement. That's his dream team. And what they're doing is going after companies that are involved in delivery, that are involved in the gig economy to make sure that workers are protected.

3:09The story that crossed the Bloomberg terminal just about 20 minutes ago is one that really they're suing food delivery providers for what they say is withholding pay from workers. And it really gets to the heart of what the Mamdani administration is going to be about. using little-known laws to go after big companies to fight for who they say is the little guy. The company that is being sued today is Motoclick. And the allegations are pretty simple, that they violated delivery worker laws by failing to pay the required minimum rate and deducting canceled and refunded orders directly from their paychecks.

3:52And these are folks who most times are only making money off of the tips that they're getting from these people who are ordering food. Wait, you mentioned the company that is in question here is Motoclick. This is not a company that I think a lot of people are necessarily familiar with. If you order from DoorDash or Grubhub, you don't necessarily have a direct interaction with Motoclick, do you? Right. This is one of those companies that says it works with platforms like Uber Eats, DoorDash and Grubhub. You know, you may file your order through these companies and then you don't know that the folks who are coming to Deliverate are actually working with this, you know, in some cases, last mile company.

4:36They are basically integrated into the point of sale systems at some of these restaurants. And so, yeah, you may order from Uber or Lyft, but you don't know that, I'm sorry, Uber or DoorDash or Grubhub, but you don't understand, you know, in that last mile where it's coming from. Well, the city is putting them on notice that, you know, that they're going to be sued for this. And then in addition to that, the city passed laws in the last year or so that protects these workers. In addition to this lawsuit, they're also putting the delivery companies on notice that there are specific laws that protect workers as it relates to deliveries, making sure that they get proper wages, minimum wage and all of that.

5:14And if that's not followed, that they could meet the same fate that's being met by Motoclick right now. Miles, this, of course, follows the allegations that DoorDash and Uber deprived New York City delivery workers of more than$550 million in tips. That is a lot of money. Is there a sense if this lawsuit is successful that they might see those wages come back? Yeah, I think what the city wants to do, and specifically the Department of Consumer and Worker Protection wants to do, is in filing any of these lawsuits or in making these claims public is to put pressure on these companies to do the right thing before they get to the enforcement level.

5:55We've seen a lot of these companies that have been sued in the past, whether in the de Blasio administration, whether being sued by the comptroller's office, come to an agreement on a settlement and that money does trickle down back to workers. But it doesn't stop with just the city hall. It doesn't stop with the comptroller's office. You know, just today, the Manhattan D.A. also, you know, trying to make it clear that he wants protections for these workers because these are, you know, these wage cases continue to pop up. It was just about a year and a half ago, two years ago that Grimaldi's Pizza was being accused of of wage theft and holding back pay for these low paid workers.

6:36And that's going to be a major focus of this administration. So can you reconcile this, this first action? It's kind of like a shot across the bow by the Mamdani administration with the promises it had made to its supporters, to voters, to folks in the city like Alex Seminova, who's a lifelong New Yorker. Is this is this kind of what they promised to prioritize? Yeah, I mean, you know, they have changed the role that Julie Su is in. It used to be the mayor for a deputy mayor for economic development. But it's not just economic development. It's it's really with a focus on worker protection. It's really on a focus on equality and rights for people.

7:19And, you know, this is a person who has spent a good amount of time in Washington, has spent time in California, who is going to be leading this effort. You know, when you look at Lena Kahn being involved in decision making here at City Hall and going and doing what she knows best, right, going through, you know, very complex parts of the city charter to find where you can really stick it to companies or where they could stick it to companies. You know, it really shows that this is a top priority for him. You know, and in addition to that, this role, the role in consumer protection was one of the first roles he filled after being being elected and right before taking or right after he took office because he knew it was going to be something that people really relate to.

8:10Miles, when was the last time that we saw a New York City mayor go after big companies like this? Is this unusual? No, I mean, I think in the Basio administration, we saw companies targeted, certainly. And then, you know, in the Adams administration, it was certainly a very pro-business administration trying to work with business, but also sort of trying to take the onus on businesses to do the right thing. And so it's a this is obviously a different tactic. And I think for the first time you're seeing an administration where they're not taking people really from big business and saying, OK, here's how you can work on economic development.

8:53In the de Blasio administration, Alicia Glenn was the deputy mayor for economic development and had come from the business community. No, these are people who've worked in government for some time and are trying to figure out a way to make government work for people who, you know, don't have much money or to hit at the affordability crisis. It's a it's really a first of its kind approach to doing this kind of work. Stay with us. More from Bloomberg Intelligence coming up after this. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute.

9:27Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real, lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com slash audio.

10:03That's vanguard.com slash audio. All investing is subject to risk, Vanguard Marketing Corporation Distributor.

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11:04On Apple, Spotify, YouTube or wherever you get your podcasts.

11:11You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Let's move over to the tech sector because there's some big news for the AI sector, given that Taiwan Semiconductor Manufacturing, a partner of NVIDIA and other chip makers, came out with a monster forecast. Mandeep Singh is our global tech research head at Bloomberg Intelligence, and he joins us now. And TSMC is a bellwether for the AI story. And the revenue forecast it has given is growth of almost 30 percent, handily beating analyst estimates.

11:55Well, I mean, right now we are in an environment where the supply constraints are at the component level, at the fab level. I mean, TSMC called out how advanced nodes are almost 77 percent of their revenue. So that just goes to show that if they have more wafer capacity at the advanced node level, they'll probably be growing even faster. And that's why they raise their own capex. So think of the trickle-down effect. Hyperscalers are raising their capex. TSMC being the FAP layer is raising their capex. And this is the entire supply chain that everyone realizes they need more data center capacity when it comes to running AI.

12:37and all the way through the supply chain right now, it's trickling down. Now, the question is obviously of overbuild and if and when, you know, we'll hit an equilibrium. And from what we have seen in terms of partnerships and dealmaking, like OpenAI, Cerebris, I mean, right now they're trying to procure as much chip capacity as they can. Because, I mean, OpenAI has said their revenue growth is a function of the power and chip available, computer availability they have. So right now, last year, they grew their power and chip computer availability 3x. Their revenue grew 3x. So that's the kind of part of the cycle we are in.

13:21And the question is, you know, how long it's going to sustain. And so far, the signs are this is going to carry through at least through 2026. Mandeep, what does the strong outlook from TSMC mean for Intel and its foundry business? Intel is up some 30 % this year. Is it a positive sign for them that demand is there or a sign that TSMC is a dominant name here? Actually, there was some demand spillover to an Intel and Samsung, especially on the non-data center side. So I mentioned TSMC is heavily skewed towards advanced nodes and more towards data centers. Well, there is demand for, you know, chip capacity on the PC side, smartphone side.

14:05And that's where there is some spillover that's carrying over to an Intel on the PC side, to Samsung as well. And so right now, everyone seems to be benefiting from overall chip demand, you know, across the board. Right. And something else that's in demand is memory. And we've seen Micron, we've seen SanDisk, we've seen Western Digital really benefit from that demand for memory chips. But it also there's a downside to that because you have hardware companies as a result under pressure because they need to pay for that memory and they need to go out and source it. And it's not always available.

14:39Unless you are Jensen and NVIDIA who has really managed the supply chain well. I mean, I was amazed how NVIDIA mentioned that they still feel comfortable holding on to that mid 70 % gross margins. They're one of the biggest users of HBM memory that is supply constrained right now and the prices are going through the roof. But they have logged in those multi-year agreements where the suppliers can't really raise prices. And so from that perspective, the bigger you are, if you're an Apple, I'm sure they can source their memory. They may have to pay higher prices and it will impact their gross margins, but not to the same extent it's going to hit a smaller hardware vendor.

15:23And that's what I think we'll find out this earning season. Mandeep, also looking at the story today about Oracle struggling to hire workers for the buildout of its headquarters in Nashville. What has this AI build out meant for hiring the talent war? Is there anyone who's winning it? Yeah, I mean, we read the story on the terminal about electricians, you know, having almost a doubling of their pay. And so anyone who is linked to that data center construction right now is in high demand. And so it doesn't surprise me that you are sort of in this environment where labor is in short supply, you know, components are in short supply.

16:05And putting all these things together is taking longer time because everyone wants them to be ready overnight. Well, that's where you're running into these bottlenecks. Well, to Alex's point, Oracle is trying to attract workers to Nashville, where it's developing this riverfront headquarters. Is that a place where the tech talent will flock to? I mean, we've seen what has happened in Texas, right? In terms of companies going to Texas, just because it's easier to set up data centers over there. Oh, and no income tax. No income tax. That's right. So all these pockets, I think, are having their moment in terms of, one, attracting these big companies.

16:47And if you have power, and I haven't studied Nashville in that detail, but if you have power, then it suddenly becomes a very attractive destination. Stay with us. More from Bloomberg Intelligence coming up after this. This is Caroline Hyde. And I'm Ed Ludlow, inviting you to join us for Bloomberg Tech, a daily podcast focusing exclusively on technology, innovation and the future of business. Every weekday, we bring you the top headlines from the world's biggest tech companies. From finance to defence, AI to entertainment, and from startups to the magnificent seven. We highlight the latest stories of the people and companies pushing the tech sector to new frontiers and the politics that shape global tech markets.

17:31We do this all every weekday, then bring you the most important conversations and analysis in our podcast. Search for Bloomberg Tech on YouTube, Apple, Spotify, or anywhere else you listen. Join us every afternoon on your commute home and stay ahead of the tech news cycle. That's the Bloomberg Tech Podcast. I'm Caroline Hyde in New York. And I'm Ed Ludlow in San Francisco. Subscribe today, wherever you get your podcasts. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube.

18:11One of the tailwinds for the market heading into this year was the expectation of a spate of dealmaking. And to that point, we did learn today that Boston Scientific is looking to buy Penumbra for about$14.5 billion. Obviously, with the big banks reporting earnings, bank executives are also making comments. David Solomon, the CEO of Goldman Sachs, says that we are not yet in the middle of a full-on M &A cycle, and he sees a very, very good year for M &A overall. all. Let's bring in Jennifer Rhee. She is our senior litigation analyst for Bloomberg Intelligence to talk to us about the antitrust landscape.

18:46Is there an active antitrust monitoring happening right now? Because this administration has signaled that it wants to see deals being made. Yeah, absolutely. And it certainly is a big change from the Biden administration, where we kind of had the opposite sentiment. I mean, we are really seeing very little activity from the Department of Justice, a little bit more from the Federal Trade Commission. But even in their case, it's been pretty restrained. And it seems that both authorities are really willing to work with the companies if they think that there's a problem with the deal to work out some kind of settlement.

19:16And that's what didn't exist during the Biden administration and why deal making was so stymied at that time. And I think most companies see if we can come up if we have a problem. A lot of deals don't. But if we do and we can come up with a solution, we can probably get it cleared. Jen, you mentioned muted activity from the regulators, but are there any industries that they're targeting right now more than others? Well, it looks like it. It's interesting that we see Boston Scientific has a deal because of the few challenges that have been brought to deals by the FTC, they've been in the healthcare space.

19:47One in the housing area, construction adhesives, which is a recent case they filed, but two in the healthcare space. And it doesn't surprise me really because these are very sensitive sectors, consumer-facing sectors. And that does align with essentially a populist agenda, which they talked about in the beginning when they took on their positions. And so I think we'll probably see if we see continued activity in those areas or other very sensitive consumer areas. The other thing that we need to keep in mind is most of these companies that we're talking about are big multinationals. They operate all around the world.

20:21So you have U.S. regulators, and they may be stepping back and letting things happen, but regulators in Europe may not be. And I bring this up because we heard reports yesterday that Paramount and Netflix have been meeting with European Commission officials as part of their bid for Warner Brothers. Can pair contrast, for instance, the European Commission regulators with those in the U.S.? You know, there's been a little bit of a pullback. When I think of really big regulators in antitrust, I think of U.S., China, U.K., and Europe. These are the jurisdictions which would be willing to actually block a global deal.

20:58And we've seen a little bit of pullback across the board, not so much with China. It's really just a black box there. I can't speak to what they're doing. But in the UK and in Europe, there has also been a bit of a pullback, especially in the UK, after they kind of got really chided from Microsoft Activision and trying to step in there. The thing is, for companies doing a deal that might have scrutiny in Europe, it's a bit scarier than in the US because they have the ability under their law to actually block a deal. whereas the U.S. regulators don't. They have to go to court, right? And they have to win in court in order to actually block a deal.

21:32It is far more difficult for them. It is easier in the EU. And Netflix, by the way, is gigantic. I didn't know this until I started looking at the deal, but it's really, really big outside the U.S. And HBO is getting bigger in many of the countries in Europe. It's recently expanded in Italy and seven or eight other countries. So they will, that deal, I think no matter which company ends up buying Warner Brothers, is going to get a lot of scrutiny and certainly scrutiny in the EU. And that is going to be one area where they're going to have to work, I think, to get clearance. Jen, the past couple of years saw a lot of high profile antitrust cases specifically within big tech.

22:07We had rulings against Google and Meta. What kind of precedent have they set for big tech regulation in 2026? Well, what they're showing is that it's going to be very, very difficult for U.S. antitrust agencies to actually tame what they view as monopolistic conduct. I mean, They did win technically against Google with respect to monopolizing search, but the remedy was fairly weak. They didn't get what they were looking for. Look at what Google's doing now with with AI, with Apple, which is exactly what the plaintiffs were trying to avoid. You know, dominance in AI after dominance in search. So the difficulty they have is even where they win on liability, they have a really tough time with remedies.

22:50Most U.S. federal judges are going to be very cautious when it comes to meddling in business and the way a sector may develop, especially in technology, because it's so rapidly changing and nobody knows where it's going. So when you have these cautious judges, you're just not going to get the drastic remedies that are probably the remedies that are needed to really do something about the market positions of some of these companies. So we're seeing that it's going to be difficult. But what we haven't seen as much of a let up on the cases that were inherited from the Biden administration. This DOJ and FTC are continuing to go after these cases in court.

23:24They're continuing to pursue what you might think of as a drastic remedy, a structural remedy. The next test will be Live Nation, which is going to trial March 2nd against the DOJ in some states. OK, so we'll watch for that. And it's a bit of leftover from the previous administration. We talk about regulators, and that's usually how the antitrust enforcement shows up or any kind of pushback from government authorities. But there's also the role of President Trump as well. And he's made clear that because he has some firm opinions about certain companies in certain sectors that he's going to be what he says personally involved in some of them.

24:00That's right. Is there a playbook for this? I mean, how do regulators work in concert with a mercurial president? You know, there really isn't a playbook. This is somewhat unprecedented. Now, there are many that would I think we're going to argue that this kind of started during the Biden administration. But we have authorities at the Federal Trade Commission and Department of Justice that are very much trying to align what they're doing in the anti-dress space with the policy priorities of this administration, I think much more so than in the past. And they just don't look like they'd be willing to buck the White House if the White House has some feel or some something, you know, an issue with the deal.

24:37Right. So we're seeing a lot of alignment and we're also seeing a lot of preemptive alignment. Yes, preemptive alignment. And we're seeing a lot of lobbying, which we hadn't seen before, too, in the overruling of the antitrust division by senior officials who are talking to lobbyists. And so there is a lot of concern right now in the antitrust community about the rule of lobbying really prevailing over the rule of law when it comes to merger enforcement. And this is stuff that we see after the fact, you know, after an announcement has made as opposed to during it. That's right. We see reports.