Afternoon Coffee: California courts order Uber, Lyft to classify drivers as employees; Child-labor widespread in cocoa harvest; Coca-Cola’s new operating model, brand cuts

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A California appeals court ruled last week that Uber and Lyft must classify their drivers as employees, providing them with benefits and wages under state law, according to the New York Times.

The ruling by the California First District Court of Appeal comes after a lawsuit was brought by the state’s attorney general and city attorneys of San Francisco, Los Angeles and San Diego. The state and city agencies sued the ride-hailing companies in May to enforce state labor laws that aim to make gig workers employees. California voters will weigh in soon when they vote on a ballot initiative sponsored by gig economy start-ups to exempt themselves from the law, the article said.

Uber spokesman Matt Kallman said that if the ballot measure fails, hundreds of thousands of drivers could lose work and the company may shut down its services in parts of the state. Uber has said it would be too expensive to hire their drivers as employees.

“Every other employer follows the law,” Matthew Goldberg, deputy city attorney with the San Francisco City Attorney’s Office, told the appeals court during arguments last week. “This is dollars and wages and money that is being stolen from drivers by virtue of the misclassification.”

Labor Department says 1.56 million children harvest cocoa for companies, number increasing over decades

A report released this week by the research institute NORC and the U.S. Department of Labor found that about 1.56 million children as young as 5 are engaged in harvesting cocoa for chocolate in the Ivory Coast and Ghana, according to Fortune.

The report said the proportion of children between 5 and 17 who work on cocoa farms has increased by 14 percentage points in the past decade, from 31% to 45% of children living in the two countries. The two West African countries supply about 70% of the world’s cocoa beans, the article said. While the report did not fully explain the increase, one reason could be that cocoa production rose about 60% over the past decade.

About 95% of the child workers face one or more significant safety hazards on cocoa farms, the article reported.

“As this report shows, there are today still too many children in cocoa farming doing work for which they are too young, or work that endangers them,” the World Cocoa Foundation President Richard Scobey said in a statement as the report was released. “Child labor has no place in the cocoa supply chain.”

Coca-Cola announces new operating model for products while cutting half of its brands

Coca-Cola CEO James Quincey announced a new operating plan last week that will cut the number of brands the company produces in half while still developing new products, according to Supply Chain Dive.

The company announced a new operating model in August that will consolidate 17 operating units into nine to help eliminate duplicated efforts. Coca-Cola announced wind-downs of Tab soda and Zico coconut water, for example. Decisions about brands that will stay and go have largely been made, the article said. Changes at the bottling plant level will roll out over the next year. Coca-Cola has long championed its localized production model as a strength, saying it helped keep product flowing in the first few months of the COVID-19 pandemic.

"We're letting go of ... slightly more than half of the brand, so we can focus on those with the greatest potential," Quincey said on an earnings call last week.

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