Mobility

Uber's free ride could be coming to the end

uber-logo.jpgCalifornia's labor commissioner ruled Wednesday in favor of a Bay Area Uber driver that she is an employee of the company, not an independent contractor as Uber claims of its drivers. This changes everything for Uber's business model, LA Times business columnist Michael Hiltzik writes. The ruling found that Uber retains too much control over drivers, and their labor too basic to the business model, for Uber to get away with no paying their expenses and complying with standard California rules such as overtime pay.

"Sharing economy" firms like the car services Uber and Lyft have always been based on something of a sham: the idea that the drivers are working for themselves, not for the bosses.


That concept is so alluring, on the surface, that it has spread to house cleaners, launderers, delivery persons -- you name it. But it's fundamentally false, and the California office of the labor commissioner on Wednesday blew a big hole in it.

It may also have blown a hole in Uber's venture capital valuation, which was last quoted at about $50 billion.

In March, U.S. District Judge Edward M. Chen called Uber's claim to be a technology company first "fatally flawed in numerous respects….Uber does not simply sell software; it sells rides. Uber is no more a 'technology company' than Yellow Cab is a 'technology company' because it uses CB radios to dispatch taxi cabs."


More by Kevin Roderick:
'In on merit' at USC
Read the memo: LA Times hires again
Read the memo: LA Times losing big on search traffic
Google taking over LA's deadest shopping mall
Gustavo Arellano, many others join LA Times staff
Recent Mobility stories on LA Observed:
LAX and Metro, partners for jobs
Elon Musk close to drilling under Pico and Sepulveda
LA streets are contested space where no improvement goes unpunished
Swing shift
Shop at a Metro station
Symphony for auto
Questions big and small for Measure M
California Incline redo in timelapse