Is Uber Gaining Market Share By Missclassifying Drivers?
Uber Technologies Inc. faces a lawsuit claiming that the ride-hailing company is saving money by bypassing labor laws.
The lawsuit, brought on behalf of a car delivery service, alleges that Uber is misclassifying its California drivers as independent contractors and therefore avoiding the average $9.07 an hour payment in expenses and benefits that it would incur if drivers were properly classified as employees. That means, Uber could potentially be saving circumventing certain legal regulations related to minimum wage, overtime, meal and rest breaks, workers’ compensation and unemployment and health insurance, as well as Social Security and Medicare benefits. According to the lawsuit’s allegations, the ride-hailing company is saving more than $500 million a year through the improper classification, thereby getting more room to lower prices compare to rivals that pay drivers as employees.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
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