The Future of Uber and Lyft Might Look a Lot Like FedEx
A new ‘franchise’ model could help the companies without necessarily improving working conditions
In 2009, the year Uber launched, FedEx made a change to its business model. The shipping firm had previously relied on independent contractors who owned their own trucks and were paid by the delivery or mile rather than the hour. For years, the company faced an onslaught of lawsuits arguing that the people who delivered mail in a FedEx branded truck and uniform should actually be classified as employees, rather than contractors, and protected by minimum wage and other labor laws.
To avoid treating workers as employees as a result of these lawsuits, FedEx pivoted instead to contracting with “independent providers” who managed multiple drivers, instead of independent individuals. The company argued that, in part, because these providers could negotiate their routes and rates, they met the definition of being independent and were not employees. That reasoning is still regularly challenged.
