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Uber Is Formally into the Staffing Business

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Uber UBER has been testing its ability to match gig workers to jobs in Chicago and the company is now formally entering the business with a Miami-Dade launch. So people looking for work can sign up to Uber Works (as it’s called), where they can hope to make $11-16 an hour.

Uber Works was easy enough to begin because the core Uber technology could be adjusted for the new service. But this time round, Uber is playing safe. It is partnering with traditional staffing companies for the jobs, which will “employ, pay and handle worker benefits.” Uber technology will simply help make the connection. So the driver problem Uber is seeing in ride-hailing won’t repeat here.

The idea is to do the kind of things that will enable the company to generate a profit by the promised 2021. This is obviously a tall order given the constant need to invest in every aspect of the business, whether it generates sizeable revenue like ride-hailing and Eats or not.

Of course, staffing isn’t the easiest way to do it since it’s a very crowded market with outfits like Bacon, Catapult, Gig, JobToday, Limber, Rota, Shiftgig, Shiifty, Snag, Syft and many others that are already fighting for market share. Uber may be able to leapfrog these others and scale up quickly if it starts recruiting from its huge driver base and expands its partners to cross-country and global staffing companies.

Recruiting from its base of drivers may also alleviate some of the pressure it is seeing from labor law amendments in its home state California. The amendment that goes into effect on Jan 1 2020 seems targeted at ride-hailing services, since most others that it could impact were granted exemptions. It will require Uber to offer its contract workers minimum wage, workers’ compensation and other benefits. 

We still don’t know where the service will launch next, but it does position the company as more of a technology platform than a ride-hailing service as we have come to know it.

Uber shares lost 31.3% in the last 6 months, but investors appear to be taking this news well. The shares carry a Zacks Rank #3 (Hold).

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