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California legislates to protect gig economy workers

Graham Watson

12th September 2019

Uber has responded to California's new law designed to protect workers in the gig economy, suggesting that it's not going to hurt its business.

It makes you think: are there going to be increased costs incurred? If so, are they fixed costs or variable costs? Depending upon your answer to this, you might think about whether this changes the profit-maximising output or not. However, I suspect that Uber's position is based on the fact that all firms operating in the gig economy will have to face the same increase in costs, and thus their relative positions will remain the same. Equally, these companies are likely to be able to pass on increased costs to their customers.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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