Uber’s stock price took another plunge earlier this week and analysts are largely pointing to the California legislature passing AB5. The bill is currently on it’s way to Governor Newsom’s desk and is expected to be signed and enacted relatively quickly. Assembly Bill 5, which Uber lobbied hard against, aims to reclassify many gig-economy workers as employees, rather than independent contractors. Employees are entitled to a variety of benefits, which contractors do not receive, and would likely greatly increase Uber’s expenses.
This bill could not come at a worse time for Uber, as they were already expected to announce a multi-billion dollar loss for the quarter. Steven Gunderson, a high level executive at Uber, had this to say about this spate of news.
I’d like to reassure Uber employees and, especially our Uber investors, that we are on top of the situation and we are currently pursuing all of our legal options. Uber is no stranger to legal battles. But I would add that multiple court ruling have found that Uber acts solely as a ‘technology platform for several different types of digital marketplaces.’ We traffic in connecting people. Generating revenue exists outside the usual course of our business and, as such, is not a key part of our success.
Steven Gunderson, Chief Officer
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