Disappointing IPOs Could Mean Big Changes from Gig Economy on Out

On Behalf of | Jun 1, 2019 | Business Formation & Planning |

After Lyft’s rocky IPO, Uber hoped for better but found itself in just as much difficulty after recently going public. Unfortunately for the company, the trouble didn’t stop there as Uber then posted a billion dollar quarterly loss.

Unsurprisingly, Uber doesn’t plan to sit back as losses mount. While the company’s IPO was disappointing, it is still highly valued, in the tens of billions of dollars, with investors expecting it to find its way to profitability. This has raised the question of which part of its business, consumer or worker, will have to suffer this burden.

If and how Uber resolves its profitability problems could reverberate through to not just other companies in the gig economy (or those relying on it) but to the approximately one-third of American workers employed in gig economy jobs.

Initially, those looking to compete with Uber may have to reconfigure their own plans if any changes by Uber upend the market. From there, even smaller shops that may rely on gig economy services may see themselves impacted as well. Finally, of course, if the brunt of the impact hits the workers, it could see people squeezed even further by a type of work already not well designed to provide much stability to those working for it.

As any company might, Uber is likely to find the best way for Uber and Uber alone to become profitable. The question is whether the rest of the economy can respond. What if it’s the workers that are squeezed? Will the one-third of Americans in the gig economy begin looking for different work? And if so, how can other companies take advantage of this to potentially find people to strengthen their own workforce?

Meanwhile, if it’s the consumers that take a hit, will they stay with the Uber? Will services like it remain as popular? And if not, it’ll once again offer opportunity to competitors, big and small, to step in and fill a void.

Regardless of what comes, it’s clear Uber and the like will have to adapt. It’s important for all business to watch and see what they do in order to find their own way to take advantage of any opportunities that arise form any changes in an industry that continues to take up more and more space in the economy. Doing this with an experience legal team will ensure a much smoother path forward for businesses needing to change.

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