Is Uber on the ropes?

CA: Uber drivers ARE employees

Looks like super-popular app-based ride service Uber recevied a pretty devastating blow recently (at least in the State of California):

“California Labor Commission has ruled that Uber drivers are employees.

Uber has argued repeatedly in various courts that it is not a transportation or taxi company, but rather a software platform that matches customer demand with supply.

This ruling changes all that, turning Uber into a transportation startup instead of a logistics software company. That puts the company in a position to face a number of legal obstacles, as well as rising costs of employing those drivers directly and offering them benefits, etc.”

Names, titles, legal mumbo jumbo

Uber on the ropes doomedSo Uber has risen to stardom and avoided the gauntlet of regulations and anal-retentive control of various government entities for years because of what they are “calling themselves.”

Their founders (and lawyers) have danced through loopholes and managed to march into uncharted territory quickly. Which has caused ruffles with old-school taxi drivers (as well as the control freaks at the state and local levels.) Made a lot of people “angry” for changing things. Now they might be in for a sticker shock if forced to pay back employment taxes, workman’s comp and unemployment insurance.

Whether for good (as most Uber customers will loudly agree with) or bad (change is hard for many others) – this situation has reached a critical point.

Because if Uber (and Lyft) get coerced (by force) to “comply” with outdated rules and regulations – they might be doomed. Either financially doomed with a one-two punch, or will die a slower death if the regulations cause the prices to rise enough to kill their customer base.

But I’ll say it again – the market is the one that has spoken – which is why Uber and others have done so well. If they “go away,” well – you know who to blame. Do you feel comfortable with that prognosis?

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1 Comment on "Is Uber on the ropes?"

1 year 4 months ago

I’d rather the government stay out of how people conduct business. But when you infringe on their cash cow, you will get a fight back. They always put up a fight till the bitter end.