Uber will be defending itself before the European Court of Justice on Tuesday in a landmark case which will decide its future in the European Union. And this will happen on the same day that its drivers in America will be publicly protesting for a higher wage.
The crux of he case against Uber is that it is a taxi company and as such must follow the laws and regulations for taxis set by the individual European nations and the EU as a whole. This would also apply to labor laws.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.
Uber, however, maintains that it is merely a digital service which connects consumers with those who provide them with rides. If the Court rules in Uber’s favor, then it will mean that it is not a regular company, that its drivers are not employees and that transportation laws do not apply to it.
But the worst case scenario for Uber would be if the European Court of Justice were to rule that it is, in effect, a taxi company. The case was first brought against Uber by taxi associations in Spain who are worried that it undercuts their business without having to obey the same standards and regulations.
But even if Uber wins the case, individual nations could still enact regulation prohibiting people who are not licensed taxi drivers from selling any kind of ride share service. Such a move would effectively cripple Uber’s operation in a country.
Meanwhile Uber drivers in America are not too happy with how they are compensated for their work. They will be joining protests on Tuesday in favor of a $15 national minimum wage. This would more than double the current nationally mandated minimum wage of $7.25. Many U.S. States already require a much higher minimum wage.
Uber drivers will join protesters will be out in force in more than 20 American cities including San Francisco, Miami and Boston, Fortune has reported.
But Uber drivers are not salaried employees and as such minimum wages do not apply to them in America. They are people with their own cars who are looking to make an extra buck by selling rides. As such, Uber maintains that they are actually in business for themselves.
As report by the National Bureau of Economic Research shows that Uber drivers can net more than twice as much as licensed taxi and limousine drivers in major cities such as New York and San Francisco. But this is before their car expenses such as gasoline, insurance and maintenance, are taken into consideration.
If Uber is ever required to treat its drivers as employees, which would mean paying a minimum wage, paying pay role taxes and paying for insurance as required state by state, then it would mean the death of the company.
