Uber is destroying the bike messenger. The app company's new bicycle-messenger business undercuts the competition. But is it legal?

Crain's New York reports:

The work that bike messengers do is so dangerous that most traditional courier companies in New York can no longer afford to hire them. Workers' compensation premiums for bikers have quadrupled since 2008, to between $30 and $40 for every $100 in payroll. A foot messenger, by comparison, costs a company about 50 cents per $100.

That is one reason seasoned bike messengers—those famed and feared Olympians of the streets, celebrated in movies like Quicksilver and Premium Rush and the Travel Channel reality series Triple Rush—have largely faded from the scene, replaced on company payrolls by messengers who walk their wares to customers.

Uber and other app-based delivery services, like Postmates, Zipments, DoorDash and Caviar, have in some ways spurred a revival in the bike-messenger trade. Uber, which began rolling out UberRush in 2014, now has 600 bike couriers in New York. But those operations are flourishing, traditional couriers say, by flouting the law.

Uber does not pay workers' compensation insurance because it classifies its couriers as independent contractors, who are considered to be in business for themselves and are not covered by state and federal labor laws. (For basically all of its New York drivers, Uber pays workers' comp through the Black Car Fund, which was established years ago for the hired-car industry.) Traditional courier companies, by contrast, are required to hire messengers as employees and to pay workers' comp, unemployment insurance and other fees.

Competition.