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by pyrois
4079 days ago
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Well, it sounds like they maybe shouldn't be: > “Uber and Lyft can survive classifying drivers as employees,” she says. “It might cost them a little more, but it’s a successful concept. It’s not going to go away because we are trying to enforce the rules > And several on-demand companies, such as the house cleaning start-up MyClean and the food delivery service Munchery, already treat their workers as W-2 employees. These companies’ labor costs are higher than their 1099-dependent rivals, but they get additional benefits, such as being able to train their workers and hold them to consistent schedules. I wonder if Uber is fighting this because it will cut into profit margins and raise overhead costs, rather than because it is an existential threat. There seems to be two different opinions presented in the article (though I'm not educated enough in this area to be able to tell which one is closer to being right). |
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Uber is a young company, and they have yet to learn what most mature companies have learned.
Big businesses like regulations. They don't mind jumping through whatever hoops are imposed by regulations, because they can afford to drop the money on it, they can treat the cost of compliance as part of the cost of doing business and pass it on to the consumer, while their smaller competitors can't afford to pay for compliance. The competition gets priced out of the market, and big businesses sweep up all the customers who would've gone with the smaller competition, making regulation a net financial gain for them.
The only big businesses you'll see who don't like regulation are monopolists and near-monopolists, like ISPs. Look at the hissy fit the big ISPs are throwing over Net Neutrality. Why are they so upset? Because there's no real competition, no smaller players who will be priced out of the market by NN, so the established players just see it as a straight-up cut in revenue.
The only sensible conclusion is that Uber either a) thinks like a small player or b) thinks like a monopolist. Both are worrying, though for different reasons (reason A makes me doubt their competence, reason B makes me think they should be squashed sooner rather than later).