Uber IPO is a bad bet
Loss-making Uber’s stock market float is a bad bet on a business that is facing a precarious future, according to the
world’s main trade union body the ITUC. The company is facing strike and boycott actions called by its drivers in
several countries in the lead-up to the initial public offering (IPO). This follows a series of court decisions that
challenge its employment model in several national jurisdictions, and scandals involving accusations of sexual
harassment, software designed to escape regulators, safety risks, breaches of trade secrets, tax avoidance and
allegations of bribery.
In the latest setback for Uber’s business model, a judgement by a Swiss court this week opens the way for Uber drivers
to be recognised as employees instead of the sham “independent contractor” status that they are forced to accept by the
company.
“Incredibly, Uber has said in its IPO filing that it may not make a profit. That in itself should sound alarm bells for
investors. The company’s business model depends on ripping off the drivers who work for it, denying them employment
rights and other entitlements continually driving their incomes down. Even with its poverty-wages model, Uber is unable
to make a profit. With governments now waking up to the need to regulate, and courts recognising that Uber drivers
actually do have legal rights, the prospects for future profit look negligible,” said ITUC General Secretary Sharan
Burrow.
The share price of Uber competitor Lyft has already fallen almost 20 per cent since its March IPO, following a huge loss
in the first quarter of 2019. Lyft has also reduced the amount of information available to investors, apparently to
avoid “confusing” investors.
With only a tiny percentage of Uber drivers lasting more than one year with the company due to the exploitative way the
company treats its global workforce, drivers in Uber operations in many countries are now organising into unions.
Opposition from personal transport companies like Uber and from the American Chamber of Commerce to coerce regulators
into depriving their drivers of basic employment rights have had some impact; however, the actions by drivers this week
are expected to spread, and companies like Uber are now attracting close attention from governments and regulators
around the world.
“The IPO is an opportunity to tell Uber that their business model must change. They are masquerading as modern, but are
actually hiding exploitation. Not respecting labour standards and unions rights is not a sustainable business model.
Uber is an employer and must take its responsibilities seriously. This week, our unions around the world have taken
action to demand decent, safe working conditions for all Uber drivers, men and women,” said Steven Cotton, General
Secretary of the International Transport Workers’ Federation ITF.
“Companies in every sector, including personal transport, can make a decent profit by treating their workforce with
respect and recognising their rights. Unions are ready to talk to Uber about how it could become a legitimate and
respectable company that treats its workers fairly and is sustainable. As it stands, Uber’s IPO offers a few individual
executives and investors the chance to make huge profits, by trading shares in a company that shows no sign of making a
profit. Potential investors should be very wary indeed,” said Burrow.