Uber Drivers might become employees and the effect that has on the “On Demand” Economy

LONDON, ENGLAND - JUNE 02: In this photo illustration, a smartphone displays the 'Uber' mobile application which allows users to hail private-hire cars from any location on June 2, 2014 in London, England. The controversial piece of software, which is opposed by established taxi drivers, currently serves more than 100 cities in 37 countries. London's black cabs are seeking a High Court ruling on the claim that the Uber software is breaking the law by using an app as a taxi meter to determine rates.  (Photo by Oli Scarff/Getty Images)

Last Wednesday, Uber lost a case in California that could force them to classify all of their  drivers as full time employees. If this happens, Uber will have to allocate funding for social security, health insurance, and other expenses that come with having employees. This will not decimate Uber, which recently was valued at 40 billion dollars but for other startups that copy the “Uber Model”  this could pose a serious issue.

This effect on the “On Demand” economy is huge. In an industry that Uber helped create, this ruling could now prevent other start ups from scaling like Uber because they will have to set aside large chucks of cash for employees benefits. Other companies that could be affected by this outcome include: Lyft, Seamless, Grubhub and any apps that hire independent contractors.

Uber is currently appealing this vote.




Uber Drivers might become employees and the effect that has on the “On Demand” Economy

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