What do you do when your current business model is so staggeringly loss-making you’re having to warn investors it may never turn a profit, at the same time as it’s under increasing legal and regulatory attack?
One answer might be to pivot. Uber isn’t doing that, exactly. Not yet anyway. But it has just officially announced the launch of a new app for matching shift workers with shifts, called Uber Works, working in partnership with staffing agencies.
The announcement confirms a report by the Financial Times a year ago, which reported Uber was working on an on-demand staffing business. The company declined to comment at the time.
The tech giant is best know for its ride-hailing platform but has been diversifying its business for some time — getting into food delivery (Uber Eats) and buying into the micromobility trend (with Jump e-bikes and scooters).
Becoming a matchmaker for shift work looks to be the next step on Uber’s quest for sustainability — both of its core business and, well, its reputation for exploiting labor.
In a blog post about the Uber Works launch, which is starting in Chicago but slated to be expanding to more areas “soon”, the company writes that it’s “committed to deliver services that support skill up-leveling and promote work re-entry”, saying it will be partnering with “various organizations that support workers in their employment journey”.
A month ago Uber’s home turf state of California signed into law a gig worker protections bill that squarely targeted at ride-hailing giants.
The new law means gig economy workers who are managed algorithmically via platforms will very likely be entitled to minimum wage, workers’ compensation and other benefits because it requires employers to apply the ABC test in order to classify a worker as an independent contractor — meaning they will need to prove the worker is free from the control and direction of the hiring entity; performs work outside the scope of the entity’s business; and is regularly engaged in work of some independently established trade or other similar business.
The law is due to take effect January 1, 2020. Uber is not going gentle into that goodnight, and has continued to deny the law applies to its business — saying it will do what’s necessary to keep the contractor status.
It is pushing against the tide, though. At home and abroad. In Europe it’s already been forced to offer a number of concessions (such as free insurance and caps on working hours) after a series of legal and regulatory challenges, as well as close political scrutiny of how its business operates — including the pay and conditions it provides workers.
The regulator of Uber’s most important regional city — London — continues to withhold a full licence renewal. Transport for London denied its application to renew its licence in 2017, citing safety concerns and questions over its corporate governance and culture. And Uber’s ride-hailing business remains on a very short leash, with just a two-month extension granted last month — along with fresh conditions.
Safe to say, the costs of ride-hailing aren’t shrinking.
Uber Works looks like an attempt to find a less bumpy path to profitability — via a matchmaking platform for workers who are employed by staffing agencies, which Uber’s blog post is careful to note “employ, pay and handle worker benefits”. Ergo Uber doesn’t have to.
What it wants to be is a technology provider to staffing agencies, offering a platform that matches agency workers to available shifts — in roles such as prep cook, warehouse worker, commercial cleaner and event staff — while also carrying out time-tracking, tied to a carrot for workers of more “timely” payments.
The platform’s ability to track their work will also clearly be working for agencies, though — with Uber suggesting its “technology-first approach” will lead to a “more efficient marketplace… [b]y providing a reliable pool of vetted and qualified workers”. So that’s code for workers who slack off will be seen by the technology to be slacking — and likely won’t get matched to great shifts if they do.
Here’s how Uber is pitching the play:
Today, millions of Americans use staffing agencies to find work. Yet the status quo is not ideal, for workers or for businesses.
Workers face rigid scheduling and opaque information about where they can pick up shifts and how much they can expect to earn. Businesses struggle to staff up to meet peak demand, and have to grapple with missed shifts and high turnover.
We believe a new, technology-first approach can provide faster and easier means for people to get work, while offering greater insight into the many opportunities for work that are out there—improving the experience for workers and businesses alike.
That’s why over the past year, we’ve studied and built tech solutions that can help positively impact a workers’ shift experience and eliminate bottlenecks to finding work.
There is — it must be said — more than a little irony here. In that lawyers for Uber, the ride-hailing giant, have been repeatedly instructed to argue it’s just a technology platform, not a transportation company. (Two years ago Europe’s CJEU blew that argument out of the water.)
With Uber Works, Uber is again hoping to cast itself as a technology platform. Though by partnering with staffing agencies it’s hope will be that there’s less legal risk involved.
Uber says the year-long Uber Works project grew out of its business incubator — tapping into its “marketplace technology and operational know-how to help solve pain points that exist in connecting workers with businesses”, as it puts it.
There’s no word on where in the US it might expand Uber Works to next.
The tech giant is certainly entering an already crowded field.
There are a large number of shift, temp and blue collar work finder apps targeting a similar fast-paced, high turnover employment need in the the US and Europe — including the likes of Bacon, Catapult, Gig, JobToday, Limber, Rota, Shiftgig, Shiifty, Snag and Syft to name a few. (Natasha Lomas@riptari)