Uber may be facing another massive blow to its financial bottom line. A UK Supreme Court has ruled that Uber drivers are employees, not independent contractors as dubbed by the company. The ruling means Uber drivers will now be eligible for minimum wage, holiday pay, and vacation time. While these are all things that would no doubt increase employee engagement and satisfaction, it will certainly not please Uber’s shareholders.
Uber has operated well above its means for the last few years now. Almost every ride that is run through Uber loses the company money. In fact, Uber reported a net loss of $6.8 billion in 2020. This ruling could sink the company’s profit margins even more, which would all but force them to change its current business model.
So what does this mean for the future? Well, it will almost certainly lead to increased prices to book a ride with Uber. Not to mention the long-term effects this could have on similar services in the future. As more people depend on food delivery services like Uber Eats, Door Dash, and Grubhub, we could see a complete transformation within the industry.