Uber doesn’t want to be just a ride-sharing service. The latest idea for expansion? Temporary staffing.
For the company, that could broaden their business model. But there may be other benefits for Uber behind the latest test run of the expanded service.
After a brief trial run in Los Angeles, the Uber version of temp hiring, dubbed Uber Works, is now in Chicago. The idea behind Uber is that like drivers using their own cars to drive others connected by the app. The short term staffing version works the same way, but no need for a car.
Although many apps and websites already provide similar services or have tried similar models, there is not one or even two go-to companies as there are for ride hailing services. That means that Uber could potentially quickly gain ground do to name recognition and, despite some problems, existing user trust.
From a business standpoint that all makes a lot of sense and would likely help its valuation ahead of a planned public offering next year.
But for Uber there might be other benefits beyond simply the added value of a new service. Some pressing questions from regulators likely loom large in the mind of company executives. For example, if Uber is a ride service, that might merit different consideration than if it can successfully claim to be a staffing service instead.
In 2017, the European Union ruled that Uber is a transportation service and should be regulated as such. That was a loss for the company as it meant that they would be subject to the strict rules that govern more traditional taxis.
If the company could have instead proved that it was not a transportation service but instead simply a platform to connect people, it would have been free from those regulations as well as others that outline treatment of employees.
In the United States, the 9th Circuit Court of Appeals spiked a class action lawsuit by Uber drivers who wanted to be considered employees. In April, a judge in U.S. District Court in San Francisco ruled that limousine drivers for Uber were independent contractors and not employees.
Despite those favorable rulings, there is still plenty of room for litigation in the U.S. and abroad. Just this week, on October 16, Uber agreed to pay $1.3 million to settle a lawsuit with drivers who had opted out of the company's arbitration clause, for misclassifying drivers as independent contractors rather than employees.
For Uber, added justification that it is not a transportation service or employer but instead a general work platform could be key in future legal fights. Uber Works, in addition to adding value to the company, might be just the trick to make that argument work.