Uber and Lyft Consider Becoming Transportation Businesses for Real nytimes.com

Kate Conger, New York Times:1

Uber and Lyft, which are facing mounting pressure to classify their freelance drivers as employees in California, are looking for another way.

One option that both companies are seriously discussing is licensing their brands to operators of vehicle fleets in California, according to three people with knowledge of the plans. The change would resemble an independently operated franchise, allowing Uber and Lyft to keep an arms-length association with drivers so that the companies would not need to employ them and pay their benefits.

The idea would effectively be a return to the days of how groups of black cars were run. Lyft has presented the plan to its board of directors, one person said. Uber, which already works with fleet operators in Germany and Spain, is also familiar with the business model.

I know it’s a bummer that the cost of taking an Uber or a Lyft will likely increase as a result of this legislation, but the deal users get on those platforms is an illusion. It is the result of grotesque labour exploitation by companies that somehow still manage to lose billions of dollars every year.

It may also become harder to be an occasional driver — but perhaps rules around transportation companies were in place for a reason. The medallion system is awful, but replacing it with a free-for-all model doesn’t make sense either if it means that gig economy drivers and taxi drivers alike can no longer earn a living.

  1. A local news aside: there is a photograph in this article that includes a billboard for a company called “Brex”. In Calgary, those four letters will forever be tied to the Bre-X scandal, which brought down a huge mining company that grossly exaggerated the amount of gold it found in Indonesia. ↥︎