Uber's Profit Impact if it is an Employer

Jun 17th, 2015
Uber's Profit Impact if it is an Employer

Uber's operatng profit could tumble down to 0. In a ruling on June 3, The CA State Labor commission decided in favor of a contractor/partner/driver declaring that Uber should be considered an employer instead of an on-demand marketplace. If Uber is forced to accept this kind of ruling, it could seriously jeopardize their model by jacking up costs and regulatory requirements like Affordable Healthcare, paid sick leave, etc. that most employers have to pay.

Below is what Uber's cost structure would look like if it had to take on their driver partners as employees instead of 1099 contractors. Their profitability could go down to zero- most significantly due to employer taxes (~10%) and the dreaded medical costs from Obamacare which they have to provide given their size.
Want to run your own numbers and assumptions of what it costs as an employer vs. a contractor? Here's a free Online Rate and Cost Calculator

latest articles