Uber Dealing with Disgruntled Drivers
Just when the company was gaining traction, winning against unions and officials wanting to halt their expansion, Uber has a much bigger problem. Disgruntled drivers. Until now, the biggest issue for Uber was dealing with local politicians feeling pressure from taxi companies angry about losing revenue. Their customers loved the service. Quick, cheap, and convenient rides here and there. No muss no fuss. But things are getting difficult again, and the challenge, this time, is internal. Sure, Uber is the largest taxi company that “employs no drivers”, but those drivers they don’t employ are tired of working for what they agreed. They want more money. Specifically, 57.5 cents per mile. Not that every driver is asking for that. The tip of the spear, in this case, comes from Uber Technologies, Inc., an organized group of divers in California suing for the right to be “treated as employees” … which, of course, is a relative demand based on their particular understanding of what they would get if they were employed. While this is mainly happening in California, it’s an easy bet many others are watching the outcome with interest. If the move is successful in CA, expect other drivers in cities across the country to follow suit. So, what will that mean for the future of Uber? Will they unionize and cause rates to skyrocket? That’s one of the main issues people have with cab service – exorbitant rates. This is a touchy issue for Uber, one with massive PR ramifications. If it goes well, then everyone is happy again. But, if in reaching an agreement with its drivers, Uber alienates the only group that has always loved them – riders – then the company faces a PR nightmare much, much worse than anything a single group of disgruntled drivers could dish out. Jonah Engler is a financial expert from NYC.