Uber, Mobile Tech, and the On-Demand Economy?

i-peopleThere are two kinds of technological developments. The first is an announcement that changes everything, which comes roaring at you like an overflowing river. Think of the first iPhone in 2007. It was a development that blew people’s minds and it was easy to tell instantly that phones were never going to be the same. The second is more slow-rolling. These are changes that develop over time, perhaps without you even noticing, until suddenly the development has become thoroughly ubiquitous. Uber, the San Francisco on-demand ride behemoth, falls into the second category.

It’s more than just Uber, of course. By the time Uber was not only firmly established, but completely dominant, we were well into the era of on-demand services. This era was, of course, partly brought on by Uber itself. And like its fellow Silicon Valley giants Apple, Google, and Facebook, what happens to Uber has huge ramifications down the chain. That’s why this summer’s ruling by the California Labor Commission that Uber drivers are employees, and not contractors, is going to have implications for everyone in the on-demand economy, and possibly even alter the way we use our mobile tech.

Uber and the Law

It’s been a strange summer for Uber and the June ruling was just a start. That ruling, which declared that drivers were technically “common-law employees,” was an interesting one. It’s akin to common-law marriages. In most states, if two unmarried people are together for long enough, they can be considered married by common law, which means they can share benefits and have other legal protections of a spouse. Common law employees work the same way: you are an employee by dint of proximity, if not of legal status.

This is a potentially enormous shakeup for the Uber model, which counted on employees being able to set their own hours, work when they wanted, and make what they wanted without interference. The drivers’ argument, of course, is that they collectively do all the work and that Uber’s actual profit-sharing plan is unfair. Uber exercised loose control over a lot of traditional workplace regulations (though tight control in other areas), so this ruling changes a lot. The ruling also has huge ACA implications for Uber, which means the company will either have to start providing health care to full-time employees or else pay enormous fines. 

Obviously, Uber isn’t taking this lying down. They argue that this limits the freedom of their employees. Various cases are working their way through the courts, including Uber’s attempt to block a class-action suit seeking reimbursement for mileage and tips. A ruling on the class-action, which will be setting an important precedent regardless of the outcome, could come in the next few weeks.

Implications for Your Mobile Technology

We could sit here and talk all day about labor rights, worker protection, company prerogative, business models, and all that, and possibly even end up still being friends. However, for now, let’s focus on what this means for the sharing economy and the on-demand services we’re increasingly relying upon, which are becoming an increasingly dominant feature of our mobile technology age.

If the Uber business model changes, the on-demand economy isn’t going to go away. At this point, it’s far too profitable and too important a part of our society. At the highest level, profit margins will be tightened, which could make it harder, initially, to get a driver. Participation will be initially lowered, as Uber cuts its services in order to keep up with the law, which could take the form of setting hard limits on the amount of hours a driver can drive in a week in order to avoid paying for health care. Companies like Lyft, as well as other industries (house-cleaning, food delivery, etc.) will potentially follow suit.

It will rebound, though, as companies adjust to the new reality. Instead of having (let’s say) 1,000 drivers at 40 hours a week, they’ll have 2,000 at 20 hours. It could actually open up more spots and also let smaller and more flexible companies slip in at the margins. It should also lead to more innovation, so that tech can patch over any potential inconvenience.

Really, this is the heart of mobile tech. New tech or new features change everything, society readjusts, the companies have to readjust, and we move forward. It allows for more competition, so that one company can’t walk like a behemoth over everyone else. Nine times out of ten, that leads to complacency. Rulings like this one ensure that Uber will have to remain responsive.

So this is potentially very good for your reliance on mobile tech. You’ll have more options and a greater ability to demand what you want from the on-demand economy. It’ll make your smartphones, tablets, and affordable plans an even more important part of your life. Things happen quickly in mobile tech – one day, “Uber” is just a word with strange, Germanic overtones, and the next it is fighting court battles due to its size. The world adjusts and tech moves forward. Those are two things we can always count on.

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