The beauty of the Uber business model -- from management's point of view -- is it doesn't have a bunch of needy, pesky employees around always asking for stuff. Like healthcare, schedule commitments, investment packages -- that sort of thing. Uber drivers don't work for Uber, they work with Uber. That's a critical difference -- and a California court just said that difference is hogwash. Uber will appeal, but for now California considers Uber drivers to be Uber employees, not contractors with few rights in a nebulous business relationship with a tech giant.
Uber's entire business is based on running a lean operation. The company, which some estimate has a value of $50 billion, positions itself as merely a technology exchange where supply gets paired efficiently with demand. Parties on both sides use the tech, but they aren't part of the company. California says that position just skirts too many workers rights issues. Uber operates in more than 300 cities in 58 countries. It has a million drivers worldwide. That's a lot of employees on Uber's books, if the California ruling finds broad adoption. Among global companies, only Walmart and Hon Hai Precision Industry have more than a million employees.
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