Naperville Business Lawyer Talks About Driver Strike Just Days Before Uber IPO

Uber, Naperville business lawyerOver the last few years, few companies have made international headlines as often as Uber has. Every few months, it seems, another controversy arises involving the San Francisco-based technology company. Some of the issues have been related to the safety of self-driving Uber vehicles while others have focused on misconduct and sexual harassment allegations at Uber’s headquarters. The most frequently talked about concern, however, is the relationship between the company and its drivers.

As a business law attorney, I am especially aware that all of the pieces of a company need to work in harmony if the business is to enjoy long-term success. Unnecessary friction can result in serious problems with sustainable profitability. With that in mind, I am curious to see how the future will play out for Uber, as tension between the ride-hail giant and its drivers does not show any signs of easing anytime soon.

Drivers Refuse to Provide Rides

On Wednesday, a number of Uber drivers around the world staged a version of a strike to protest what they claim are unfair compensation structures. In the United States, the work stoppages were focused on large cities such as New York, Chicago, Boston, Los Angeles, and Uber’s hometown of San Francisco, but drivers in many smaller communities reportedly took part in the strike as well. The goal of the strike, according to organizers, was to create a shortage of drivers and to demonstrate the importance of drivers to the success of the company.

Many Uber drivers say that they have seen their wages decreased substantially in the last several years due to changes in Uber’s compensation system. Drivers once earned a percentage of a rider’s total fare, but they are now paid based on a per-mile and per-minute formula. Rising costs for riders have not resulted in proportional increases in driver compensation, experts say.

Uber to Go Public on Friday

The timing of the strike was not coincidental. The stoppage was meant to be a response to Uber’s initial public offering, which is scheduled for Friday, May 10. Financial experts forecast that Uber will be valuated at between $80 and $90 billion for its IPO.

Critics and driver advocates have expressed concern that in Uber’s filings, the company essentially guarantees that drivers will continue to suffer, even as company executives receive huge bonuses and incentives. The success of Uber’s business model is contingent on drivers continuing to be classified as independent contractors instead of employees—saving the company millions of dollars in expenses related to benefits, minimum wage requirements, and workers’ compensation insurance.

Call a DuPage County Business Lawyer

While your company might not be as large or as complicated as Uber is, you must still ensure that all of the pieces of your business work well together. Contact an experienced Naperville business law attorney for help with creating a business plan or amending your plan as your company grows. Call 630-756-1160 for a confidential consultation at The Gierach Law Firm today.

 

Sources:

MarketWatch

CBS News