Uber: A Threat to the U.S. Middle Class?

These past few years, Uber seems to be joining the list of mature tech giants that saw their leaders — typically harsh entrepreneur-founders — replaced by experienced ex-bankers and ex-CEOs. Uber’s current CEO Dara Khosrowshahi, who was brought on board in 2017, is on a mission to cut costs and bring Uber back to profitability.

However, isn’t this propaganda just putting defense lines around Uber’s business model? After more than a decade of Uber’s existence, the company arguably gave rise to the phenomenon of the gig economy. With it, the creation of thousands of Uber-like startups on a mission to disintermediate the “middle man”.

At first, Uber was an idea to solve a genuine problem. But as time went by, it has evolved into the worst nightmare of every management consultant.

Management consulting is an industry that revolves around the idolization of intellect. Companies like McKinsey, Booz Allen Hamilton, and Boston Consulting Group sell enterprises the promise of corporate reinvention. These companies deconstructed other giant companies such as IBM to its constituent parts, removed redundant workers and processes, and put everything back together leaner and more efficient.

Basically, the glorified the top management so much they started eliminating middle management. Eventually, top management remained intact with even more control over how the firm performs.

Over time, consultants like McKinsey instilled a belief among companies that to reject or avoid their help was risky. With that said, some began to point out that companies like McKinsey have, in fact, helped to diminish the U.S. middle class.

But up came Uber and put this idea to bed – and terrifyingly, it’s not good news for the “man in the middle”. If McKinsey indeed helped to diminish the U.S. middle class, Uber may kill it completely.

The ride-share giant has made the consultant’s job obsolete, replacing the consultant’s triple-digit hourly rate, tables, and PowerPoints with technology and sleek design. The company cut the consultant industry’s mission into a short-lived yet fruitful one; it has severed the link between top management and workers. All of the intelligence and decision-making are at the C-suite level. Meanwhile, the workers are given the (illusion of) control and freedom over how and when they work.

For now, Uber also seems well equipped to withstand legislative challenges like AB5. The company is already testing app changes, such as letting drivers set their own rate, to meet AB5’s tests and, most importantly, avoid automatic reclassification of its drivers to full-time employees.

Because, you know. What company would want to give their money-making machines the benefits and job security that they rightfully and lawfully deserve?

Though these legal actions against Uber may disrupt them for a while, they still can’t completely stop it. After all, Uber is not a mere regulatory arbitrage; it is an evolutionary step in management.