Final Nail in Uber's Cofin?



Posted by Ed 2 mths ago
California Just Made Uber’s Survival Odds Even Longer
A new law probably will lay waste to the money-losing, gig-economy business model.
California’s State Assembly has just passed a bill aimed at forcing Uber, Lyft and other so-called gig-economy companies to treat their workers as employees rather than as independent contractors. Uber, for example, has long argued that its drivers weren’t actually employees, labeling them “driver-partners.” But the California Legislature didn’t buy that argument.
The new law stipulates that companies can only contract out tasks that are “outside the usual course” of the company’s business, and that contractors must be “free from the control and direction” of the company. Any workers who aren’t contractors must receive benefits, like health insurance and paid time off.

Some expect the new law to lay waste to the gig-economy business model. California is a huge, important market — some estimate that the change could cost Uber as much as $500 million a year. And there’s the chance that other states will follow California’s lead.
Uber immediately denied that the ruling applied to it, saying that drivers weren’t part of its usual business, but the argument seems unlikely to hold up in court. 

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