Uber and Lyft will eventually face the hard reality of these never-ending fines

“Uber and Lyft are responsible for reimbursing drivers for years of unpaid wages, benefits, and business expenses from before Prop 22 took effect,” said John Coté, spokesman for the San Francisco City Attorney’s Office, which is involved in separate litigation concerning Prop 22. “With this latest decision, these companies may very well owe their drivers even more.”

“A 2019 California state report had them driving 4.3 billion miles in 2018 alone. Repaid at an average Internal Revenue Service reimbursement rate of 56 cents per mile for four years would be $9.6 billion. And those expenses are only one portion of what plaintiffs allege the companies allegedly owe.”

The amount of money Uber and Lyft owe in back pay is only exceeded by the amount of money they owe in antitrust fines. Both products either engage in price fixing with independent contractors, or employee misclassification.

As it stands, almost every consumer “unicorn” aims to deliver one product or another that wants to break the law, bend the law, and run the scheme long enough avoid fines on the back-end, hoping to build a product too big to fail. An opportunity to break these products over their spines is actually bigger than these products will ever grow by themselves. The secondary disruption is able to aggregate a vast amounts of wasted capital that organically supports properly working model. For example, in 2000, Google would not been able to establish a working search engine without Yahoo laying down the groundwork. In fact, in 2002, Yahoo tried buying Google, and they almost sold it. It takes a better model few years to gain on a crappy model, but eventually, the better model implodes the crappy one — it is simply cheaper to operate.

In this #canofworms when Uber and Lyft will eventually face the hard reality of these never-ending fines, both platforms will simply go bankrupt. The “correctly-built Uber” will be a worldwide, highly profitable, subscription-based ride haling service, no liabilities, only pure profit. Lite, simple consumer-friendly models always beat and excel debt-driven legal dumpster fires, but sometimes it takes a decade or more to develop them.

In this case, U.S. Department of Justice has yet to file price-fixing charges against any gig platform as of yet, so it may take even longer.

#laborlaw #labor #gigeconomy #antitrust #pricefixing #misclassification #ecommerce

Author: Litesand

Antitrust, real estate, e-commerce, fintech, proptech, bigtech

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