The Legal Argument that could Destroy Uber

Jon York

Member
Nov 30, 2018
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What City & State do you work in?
New York City
Jalopnik (I always want to call it Jail-o-Pink!) had an interesting take on the National Labor Relations Board's recent "advice memo" on Uber. You may remember the NLRB a couple of weeks ago wrote an opinion that everyone saw as a huge gift to Uber. In it, they basically said Uber drivers are independent contractors - not employees. Well, for Uber, that was the best news they could get. Except... this wasn't a legal ruling, it was only an opinion from the NLRB. Although an opinion from the NLRB certainly carries a lot of weight. But it's not the same as a legal ruling.

However, Jail-o-Pink says this ruling:
"would paradoxically expose the ride-hailing giant to a separate legal challenge, one that has gotten far less attention. It poses an even greater existential threat not only to Uber, but most if not all the gig economy businesses: price fixing."
Price Fixing! Wow... that came out of nowhere! How in the world could an opinion declaring Uber drivers independent contractors - lead to charges of price fixing? Well, let's see.

They quote a law professor at Wayne State University who says Uber is:

"effectively trying to have it both ways. They're setting a price for a product they say they don't sell."

Okay, wow!

They then go through a good bit of legal history and details on price fixing and why it's bad and why it's illegal. And basically it boils down to this... Uber claims it's not a transportation company but rather an app that connects drivers to passengers. They say drivers are as much customers of the company as passengers are. Because Uber has to go out and sell drivers on its ability to bring customers to them so that they'll choose to get their riders from Uber, rather than say, Lyft.

But if Uber isn't a transportation company and if its drivers are customers too, rather than employees, then why does Uber charge riders $10 for a ride that Uber will only make $2.50 on? Uber should only charge riders $2.50 (on what would normally be a $10 ride)... or 25% of whatever it is they charge them now. Then, drivers would add their own charge for providing the actual transportation.

In other words, Uber is setting the price for more than its own services. It claims it only facilitates a connection between riders and drivers. Therefore, it should only charge for the service it provides - which is facilitating the connection. And their charge for that has always been 25% of the total fare. The other 75% goes to the driver for the service they provide - which is wholly separate from the service Uber provides. This is at least according to the claims Uber has always made about itself in court and other legal venues.

In other words: Uber is setting, i.e. FIXING, the price for drivers who are actually customers of Uber. "Uber is fixing the price for the ride itself, which Uber contends is a transaction between two separate entities!"

"In other words, there’s an argument to be made that Uber is doing the very price-fixing it says drivers can’t do; and the price it fixes is for a service it contends it doesn’t sell."

Oh and you gotta love this. You know how Uber's "support" responds to us drivers usually with a response that doesn't show any evidence that they actually read our question? Jail-o-Pink asked Uber if it had any comment on the potential legal challenge of price-fixing and an Uber spokesman responded by saying this:
Riders want a reliable and affordable way to get from A to B. Drivers want dependable earnings. Our pricing is designed to meet the needs of riders and drivers — so Uber can be the first choice for both.
Haha! Wanna bet that response was pumped out by an AI bot in the Philippines!?

If all of this is a little too complicated to follow in writing, check out Kevin the Apptrepreneur's take - via video! (It's a little easier to follow).

 

hhoward4

New member
Dec 13, 2019
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What City & State do you work in?
Huntington beach
Well I was working for uber eats on bike and because of medical issues on bike I can't work anymore how does that pan out