Uber launches staffing business in Chicago

After more than a year in stealth mode, Uber, which has become synonymous with the “gig economy,” is launching a staffing business in Chicago on Friday to supply on-demand workers to other companies.

The new business, called Uber Works, has been operating Covertly in Chicago for more than a year. It is The second business outside of uber’s original on-demand taxi service, based in Chicago. Uber Freight, an on-demand freight platform, operates out of Chicago, where the company plans to add 2,000 jobs as it moves into an Old downtown post office.

Uber Works will be headed by Andrei Liskovich. He declined to specify how many employees the unit would have, but said, ” We plan to grow rapidly.”

Uber’s move to temporary staff isn’t entirely surprising. At its core, Uber is a mobile app that allows workers to find work by driving people from one place to another.

Temporary staffing is somewhat different as employers need workers for certain shifts. Uber will partner with staffing agencies, starting with TrueBlue, to process paperwork for employment, background checks and payroll.

Meanwhile, Chicago has become a test bed of sorts for the gig economy. Shiftgig, which started as an online site for workers in the hospitality business, ultimately morphed into a contract-staffing agency that supplied temporary workers for industries as varied as retail and warehousing. The company ultimately sold off its staffing business to focus on tech. BlueCrew, a competitor acquired by IAC that moved to Chicago this year, employs its own workers. And Chicago-based food-ordering and delivery company Grubhub, which also has become a significant player in the gig economy, treats its drivers as independent contractors.

Uber seems to be deliberately avoiding becoming the official employer of the workers it provides by partnering with staffing agencies. 

“We have built a technology platform to solve the problem for workers,” said spokesman Xavier Wang Chau. According to him, the contract and personnel business is still largely analog.

As Uber looks for profitability, it is looking for ways to squeeze more revenue out of its brand platform and technology. Uber, which already has 3.9 million drivers in its taxi business, also has 400,000 drivers in its freight operations. Uber Works will open a platform for workers outside of transportation.

“We will make (Uber Works) accessible to drivers,” Lishkovic said. “This will give us a more diverse workforce than our customer base for travel. It will open up a platform for people who want to make money but don’t have cars.”

Uber’s move into staffing comes at a difficult time for the gig economy. As more service workers find themselves struggling to get pay increases and benefits such as health insurance, there is a growing political backlash. California recently passed a law that would require companies like Uber, Lyft and Grubhub to treat workers as employees, not as contractors. 

State Rep. will Guzzardi says he is considering similar legislation in Illinois.

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