Analysis: Uber will survive, no matter what courts decide
Will Uber drop dead if it loses the lawsuit by drivers seeking to be employees? Will the entire constellation of on-demand companies implode?
Not likely. History, economics and consumer demand all show that Uber and other companies are likely to continue to flourish even if the legal battles force them to shift parts of their business model, numerous observers say.
The dancers’ case, resolved after years of haggling, set the stage for today’s lawsuits against Uber, Lyft, Postmates, Try Caviar, Handy and other on-demand companies, said Beth A. Ross, the Oakland lawyer who represented the dancers.
Even while granting class-action status to California drivers suing Uber, U.S. District Judge Edwin Chen on Tuesday emphasized that the ride service will do just fine no matter the outcome.
“Even if Uber loses this case, it will be free to restructure its relationship with its drivers in such a way that the drivers would actually be bona fide independent contractors,” Chen wrote in a 68-page decision.
That restructuring could involve looser controls — the key issue in determining employment.
“The curated model approach that so many companies followed due to Uber’s success will now come under question,” said Jeff Tennery, CEO and co-founder of on-demand hiring platform Moonlighting, referring to the way companies tell workers how to interact with customers, for instance. That “curation” opens them up to lawsuits over employment.
Tennery said an Uber loss could spur startups to create open labor marketplaces modeled after eBay, where two parties can connect directly with fewer rules about their interactions, “as well as offering workers more freedom and choice to generate new income.”