1851

<a href="https://www.reuters.com/article/us-uber-california/judge-rejects-uber-lyft-bids-to-delay-california-driver-injunction-idUSKCN2592RT?utm_source=1851franchise.com&utm_medium=article&utm_campaign=uber-and-lyft-are-considering-franchising-2713730" target="_blank" rel="nofollow">Recent injunctions in California</a> are forcing several third-party delivery and ride-sharing companies to reclassify their contractor drivers as full-time employees. Now, Uber and Lyft may be looking for another way — franchising.<a href="https://www.nytimes.com/2020/08/18/technology/uber-lyft-franchise-california.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=uber-and-lyft-are-considering-franchising-2713730" target="_blank" rel="nofollow">According to an article on The New York Times</a>, Uber and Lyft have been discussing licensing their brands to operators of vehicle fleets. “The change would resemble an independently operated franchise, allowing Uber and Lyft to keep an arms-length association with drivers so that the companies would not need to employ them and pay their benefits,” The Times wrote.Last year, the <a href="https://www.hrdive.com/news/california-governor-signs-bill-codifying-abc-classification-test/562685/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=uber-and-lyft-are-considering-franchising-2713730" target="_blank" rel="nofollow">AB-5 codified a state supreme court ruling</a> was designed to grant employment benefits to gig workers. Now, as the recent injunctions show, it could force Uber and Lyft to categorize drivers as employees if it was shown that the drivers’ jobs were part of the companies’ core business, among other criteria.Many third-party delivery companies say most of its workers prefer to be contractors, arguing that flexibility over working hours and location is impossible under an employee model. But critics have said it places unreasonable financial burdens on drivers and gives Uber and Lyft unfair advantages over businesses that follow employment laws.From The Times:<blockquote>Under the proposal, Uber and Lyft would invite other businesses to establish ride-hailing fleets using their platforms. That could bolster the companies’ claims that they were simply tech companies that built sophisticated dispatch services and that providing transportation was outside their core business, protecting them from A.B. 5’s requirements.</blockquote>This franchise-like model isn’t completely foreign to these ride-sharing companies. Transportation rules have already forced Uber’s operations in Germany and Spain to work with fleets. Lyft based its plan on FedEx, which franchises some of its delivery routes to local operators, current and former employees told the New York Times.Of course, franchising comes with its own set of challenges. Working with a franchisee who oversees fleets of drivers could increase costs because it introduces another person in the chain of command who needs to be paid. This could also potentially create raised fares or reduced service fees, current and former employees told the New York Times. The companies would also have to surrender some control over driver behavior to the franchisee, leaving the company more vulnerable to reputational damage if something went wrong. Another hurdle is that few fleet operators in California are large enough to absorb Uber and Lyft’s market share.<a href="https://www.nytimes.com/2020/08/18/technology/uber-lyft-franchise-california.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=uber-and-lyft-are-considering-franchising-2713730" target="_blank" rel="nofollow">Read more at nytimes.com</a>.

Uber and Lyft Are Considering Franchising

1851 Franchise

Under pressure to classify their freelance drivers as full-time employees in California, several ride-hailing companies are discussing the possibility of franchising.

uber-and-lyft-are-considering-franchising

TruBlue Home Service Ally

TruBlue Featured in USA Today as Key Player in Helping Seniors Age Safely at Home

trublue-featured-in-usa-today-as-key-player-in-helping-seniors-age-safely-at-home

Right at Home

Right at Home Marks 30 Years With Continued Franchise Growth

Right at Home Marks 30 Years With Continued Franchise Growth, Tech Advancements, and Strong System Engagement in First Half of 2025

right-at-home-franchise-growth-2025

KidStrong Franchising, LLC

Unlocking Superpowers: How KidStrong Is Building the Next Generation of Confident Kids — and Thriving Franchise Owners

kidstrong-franchise-confident-kids

Image of a kid growing up, developing with kidstrong, high fiving and smiling. 

How KidStrong has Become the Franchise Disrupting Child Development by Partnering with Purpose-Driven Franchise Owners 

kidstrong-franchise-opportunity-child-development

Picture of kids for franchise business Kidstrong which focuses on child development and fitness

KidStrong Is Pediatrician-Recommended for Raising Confident, Capable Kids and Families Can't Get Enough

kidstrong-child-development-program

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Image of Donald Trump pointing with red stripes in the background

August 1 Tariff Deadline Is Said to Have ‘No Extensions’: What This Could Mean for Franchises

august-1-tariff-deadline-franchise-impact

What June’s Jobs Report Means for the Franchise Industry

what-junes-jobs-report-means-for-the-franchise-industry

Drone Delivery Takes Flight in QSR: The Future of Franchise Operations?

drone-delivery-takes-flight-in-qsr-the-future-of-franchise-operations

Chick-fil-A Tops Customer Satisfaction Rankings for 11th Year as Challenger Brands Gain Ground

chick-fil-a-tops-customer-satisfaction-rankings-for-11th-year-as-challenger-brands-gain-ground

Technomic Releases Annual Ranking of the Top 15 Fast-Food Chains in the U.S.

technomic-releases-annual-ranking-of-the-top-15-fast-food-chains-in-the-us

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

Rising Jobless Claims Could Signal Challenges — and Opportunities — for Franchising

rising-jobless-claims-affect-franchising

The Ultimate Guide to Selling Franchises: How To Create a Strong Incentive

how-to-build-strong-incentives-to-attract-prospective-franchisees

Franchisee spotlight graphic with photo of Ricki Oberoi and Layne's Chicken Fingers logo

Multi-Unit Wendy’s Operator Signs 12-Unit Deal With Layne’s Chicken Fingers

ricki-oberoi-laynes-chicken-fingers-growth

How Vishal Juneja Turned a Family Tradition Into a Paris Baguette Franchise

How Vishal Juneja Turned a Family Tradition Into a Paris Baguette Franchise Built on Heart and Community

paris-baguette-franchise-rockaway-new-jersey-vishal-junjea

Franchisee spotlight graphic with photos of Danielle Rosemond & Usman Khan & TruBlue logo

Family Members of Local Physicians Bring TruBlue Franchise to North Central Nassau, Long Island: A Health Care-Inspired Approach to Aging in Place

family-brings-trublue-franchise-to-north-central-nassau

Top 25 Franchise Marketing Leaders: Kelsey McManemin — Vice President of Marketing, HTeaO

top-25-franchise-marketing-leaders-kelsey-mcmanemin-vice-president-of-marketing-hteao

Uber and Lyft Are Considering Franchising

MORE STORIES LIKE THIS