In a major ruling by the UK’s Supreme Court, Uber drivers will no longer be considered self-employed but as employees which will entitle tens of thousands of drivers to minimum wage, annual leave and other employee benefits.
The ruling in the UK’s highest court could have wider implications as other companies working within the gig economy sector will be nervously looking over their shoulders waiting to see if their workers will be looking to make a claim of their own.
It will now be a requirement to pay minimum wage to the Uber drivers from the moment they are logged on to the app to the moment they are logged off and not just at the times when they have passengers in their vehicle. How this will be handled remains to be seen as does the issue of back pay for all the drivers that are affected.
The judgement was made by Lord Leggatt of the Supreme Court who unanimously dismissed Uber’s appeal. The key determination they had to make was whether Uber drivers were “workers”. Uber had argued that they were merely a ‘technology partner’ who acted as a booking agent for the drivers and that the contract was made directly between the drivers and their passengers and that drivers were free to work as much or as little as they wanted.
The Supreme Court however disagreed with this. The Uber drivers had their fees paid to them by Uber who collected the fare from the passenger on behalf of the driver and then paid the driverless a “service fee”. There was no written contract between the drivers and Uber and therefore the nature of the relationship had to be determined by the Supreme Court.
The determination was that Uber drivers had little or no say in their working conditions and they were subordinate to Uber. The judgement highlighted five key areas from the findings of the original 2016 employment tribunal to justify their decision:
- Uber sets the fares – There is no ability for an Uber driver to determine their own fee structure so therefore it must be shown that Uber are the party that dictates how much drivers are paid.
- Uber sets the terms of the contract – There is no ability for a driver to negotiate their working conditions. The contract is offered on a take it or leave it basis.
- Drivers do not have the freedom to reject a job – Whilst technically a driver has the ability to reject a journey, should this occur too frequently they are disincentivised to do so by the use of ‘time outs’ where if they reject too many journeys they are logged off for ten minutes.
- Uber exercises control over the way the service is delivered – An example of this is that Uber maintains a rating system for all drivers where passengers are encouraged to leave feedback after their journey. Should the Uber driver have a low rating they receive warnings followed by termination of their relationship if it doesn’t improve.
- Uber restricts communication between the driver and passenger – Any interaction between the passenger and the Uber driver is kept to a bare minimum with only enough communication to facilitate the journey and the customer is not able to establish a relationship with the driver.
With all of these factors put together, the Supreme Court ruled that the relationship between the driver and passengers is almost entirely defined by Uber and that there was no way to financially improve their financial position through ‘professional or entrepreneurial skill’. The only way for them to earn more would be to work more hours with no guarantee of work. Further to this, the comparison between other digital platforms such as hotel booking apps was invalid. Therefore the ruling was that Uber drivers were true “workers”.
The Supreme Court also ruled that the time working for Uber was not limited to the time periods when they had passengers in the vehicle but also included the time where the driver was logged in to the app and ready and willing to accept passengers.
Uber’s Regional General Manager for Northern and Eastern Europe, Jamie Heywood, has sought to play down the ruling: “We respect the Court’s decision which focused on a small number of drivers who used the Uber app in 2016.” Clearly, this is likely to send ripples through the industry and the gig economy will have no option but to adapt.
James Farrar and Yaseen Aslam, the two former Uber drivers and App Drivers & Couriers Union (ADCU) representatives who won the original employment tribunal have said they were “thrilled and relieved” by the Supreme Court ruling. They started their fight in helping drivers in 2013, with the campaign starting to be classified as workers in 2015 and the case entering the Supreme Court in July 2020.
Their demands include a £2 per mile minimum fare with app commission limited to 15%, ending unfair dismissals/de-activations, passing the burden of charges (such as congestion and Ultra Low Emission Zone (ULEZ) fees) to the operator and collective bargaining agreements. This ruling will now give their members a boost as the ruling could lead the way to workers rights to all in the gig economy.
What exactly this will mean for the industry remains to be seen as there is still some confusion on how this will now be applied. If Uber drivers are indeed workers and there is no longer a thin veil over this fact, then it is likely that they will be treated as such including limiting maximum hours and other controls.
There are likely to be additional costs for Uber who will now need to make National Insurance contributions and VAT payments to HMRC as well as other knock-on effects that will likely completely change their business model. With this ruling and the continued fight with TFL over their private hire operator licence, there even remains the possibility that Uber could pull out of the UK market altogether.
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