Uber chief doubles down on Europe in face of new tech rules

AMSTERDAM — Europe tamed Uber.

The once-rebellious ride-hailing application faces European Union legislation that aims to overhaul its business model, but the company’s chief executive officer is pledging allegiance to the European market, doubling down on the firm’s presence.

“The European way is increasingly going to become the Uber way,” Dara Khosrowshahi told POLITICO in an interview at Uber’s European headquarters in Amsterdam. “If you characterize a European model, probably too simplistically, as responsible capitalism, capitalism with protections, we think that is an appropriate model going forward.”

The European Union is finalizing a Platform Work Directive law that could make many Uber drivers and couriers full employees. The law takes aim at the lack of social protections and benefits in the so-called gig economy driven by apps organizing short-term work stints. Uber, for its part, has long been the poster child for the regulation-defying Silicon Valley firms that created the gig economy. 

Today, Uber has promised to green its fleet, improve benefits and protections for drivers and has recently launched efforts to work closely with former mortal enemies such as labor unions and taxi companies. All these initiatives started in Europe or are significantly more advanced in the EU than the U.S. or other markets. 

Unlike some of its Silicon Valley peers — most prominently Facebook parent Meta — Uber is not threatening to pull out of Europe if the EU introduces new laws that hurt its business.

“It’s difficult to make up a red line,” Khosrowshahi said. “We’re not looking to make threats, we’re not looking to jump out; what we want to do is lean in.” But if Brussels were to force Uber to recognize some of its drivers as full employees “we would have to significantly reduce the number of drivers and/or couriers on the road,” he warned.

The European Union is close to adopting new rules that could reclassify up to 4.1 million gig workers as employees instead of independent contractors, granting them perks like minimum wage and holiday pay, which could impact the bottom line of companies like Uber. 

If EU legislators get to a deal this year, the bloc’s member countries would have until late 2025 to turn transpose the law into national regulations and start enforcing them. 

Uber has not given up its fight to change the current proposals, Khosrowshahi said: “The best outcome for us is a platform work directive that has clear rules as it relates to the nature of work and employment …We do not believe [the current version of the law] is the right answer.”

To back up its efforts in Europe, the company plans a hiring spree in the coming months and years.

The CEO was in Amsterdam on Monday with his global leadership team to sketch out the company’s strategy for the next three years. Uber’s brand-new campus on the outskirts of the central city currently houses 1,100 employees but there is office space for another 1,000.

Part of the plan is to increase engineering jobs in Europe, while reducing the number in the U.S., where tech workers are more expensive and competition is fiercer. The bulk of Uber’s payments development work is already based in Amsterdam, the company said. 

Uber policy ‘born in Europe’

Europe’s stricter labor laws and employee protections, as well as its more progressive approach to tackling climate change, have already shaped the way Uber operates, and not just in Europe, Khosrowshahi said.

The company is applying its softer, cuddlier “European way” to relations with organized labor in the U.S. and elsewhere now too, he claimed.

Uber has pledged to be “fully green” — meaning all vehicles on its platform would be electric and it would be a “zero-emissions transportation platform” — by 2030 in the U.S., Canada and Europe and by 2040 all over the world.

At present, 10 percent of the distance driven over its platform in Europe is done in electric vehicles, while the figure is only 5 percent in America.

The company’s growing efforts to partner with taxi companies, rather than put them out of business, was “born in Europe,” Khosrowshahi said. “Taxis represent around 10 percent of our volume in Europe; it’s one of the fastest growing segments for us and it’s a new initiative that we’re thrilled about.”

All this talk of responsible capitalism is a stark change from Uber’s hard-charging genesis under the leadership of co-founder and OG tech bro Travis Kalanick, that led the firm from startup to industry giant.

Khosrowshahi’s polished and highly controlled style may be diametrically opposed to his predecessor’s, but he told POLITICO he still meets up with the mercurial Uber founder, who no longer has a stake or a role in the company.

“My job is to be smart about what’s going on in the industry and Travis is a smart person so once in a while we do compare notes,” he said, adding that their last meeting was in a bar and they try to get together at least once a year.