Uber eats humble pie slice

This week’s edition of name that Uber driver’s employment status comes from the UK Supreme Court where 70,000 drivers will now be treated as full time employees entitled to the minimum wage, pension benefits, and holiday and sick pay. But only when they are driving and not if they are delivering for Uber Eats.
This is the latest instalment in what must be the most convoluted labour battle for decades which has spanned courts across multiple continents with no two rulings seemingly the same. Refusing to make life easy for itself and concede that those who bring in the company’s income might deserve a fair share of the profits, Uber has chosen to fight its drivers every inch of the way. This time Uber will only accept that drivers are entitled to call themselves employees once they have accepted a fare and not when they are waiting for jobs to come in. Rather like only paying sales staff when they serve a customer and not when the shop is empty.
Uber argues that it frees up drivers to accept fares from other ride hailing apps, and was given space in the Evening Standard to write its own puff piece on its decisions under the byline of CEO Dara Khosrowshahi. Unsurprisingly, this repeated the company’s argument to move employment protections more in its direction.
As we’ve written before, these are tricky issues for investors. The reality is that the employment relationship is absolutely central to the company’s valuation. When Uber and fellow gig economy employers won on Prop 22 in the US the share price soared. After Uber announced it was treating UK driver as workers, and providing some benefits, it fell.
Some are willing to say out loud what many financial market participants think. Speaking on CNBC, market motormouth Jim Cramer said that gig economy employers providing benefits was a ‘bad model’ and that the company should focus on autonomous vehicles. It’s the ultimate tech-bro vision: eliminate labour entirely.
Such a view is both extreme and shorter-termist and ignores the reality that driverless taxis, which tech propagandists have repeatedly suggested are just around the corner, seem to be acting more like the traditional minicab and turning up much later than expected. Uber will therefore have a human workforce to manage for some time to come, and the challenges relating to driver employment status will remain the dominant story for this company as long as it does. Rarely are the competing interests of labour and capital so starkly counterposed.

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