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The Legal Argument That Could Destroy Uber

Days after Uber began selling stock, the National Labor Relations Board’s top lawyer gave the company a huge gift. In an advice memo, the general counsel’s office determined that Uber’s drivers are independent contractors, not employees. If drivers are legally determined to be employees, it would throw Uber’s entire business model into question by giving drivers, among other rights, the ability to collectively bargain for pay and working conditions. 

While the memo itself is not a court ruling with legal authority, it’s yet another influential voice weighing in on a vitally important legal distinction for Uber and other gig economy companies like it. 

But a ruling in the company’s favor would paradoxically expose the ride-hailing giant to a separate legal challenge, one that has gotten far less attention. It poses an even greater existential threat not only to Uber, but most if not all the gig economy businesses: price fixing.

“Uber is effectively trying to have it both ways,” says Sanjukta Paul, a law professor at Wayne State University who has been writing about the gig economy’s vulnerability to price fixing regulation for several years. “They’re setting a price for a product they say they don’t sell.”

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