Uber Head of Driver Product Daniel Danker addresses the audience during an Uber products launch event in San Francisco, California, on September 26, 2019. - Uber on Thursday unveiled a new version of its smartphone app that weaves together servicesYou can violate the basic rules of business for a little while, but they eventually catch up with you.
This comes to mind in considering Uber’s latest effort to diversify – by supplying staffing services to companies that need temps. Sadly for Uber investors, it looks like a desperate move that won’t solve its growth problem.Uber – whose stock has lost 29% of its value since going public in May 2019 – just launched its entry into the job-finding app business.
And if that’s not bad enough, the regulatory environment is moving away from allowing Uber to treat drivers as independent contractors and instead requiring Uber to employ them full-time – thus boosting its fixed costs. To wit, in September, “California passed employment legislation intended to force companies that rely on gig workers to reclassify such independent contractors as employees,” noted the Journal.I will give Uber credit for targeting a large industry.
On first blush, it is hard to see how Uber Works – which generates revenue by charging businesses a fee after a position has been successfully filled – will carve out a significant niche. Uber must first overcome two obstacles: its app does not specialize by job type, industry or geography and its business model could attract regulatory scrutiny.
Uber’s vision for the future of transport was always way ahead of everyone... now all these other companies are just “me too” jumping on the bandwagon