A British employment tribunal has rejected Uber’s appeal on a case involving the employment status of its drivers. While the popular ride-hailing app believes drivers should be considered self-employed, and insists the vast majority of them prefer it that way, the tribunal has ruled that the drivers are employees and thus entitled to minimum wage, overtime/holiday pay, and other protected benefits.
Uber’s appeal came in response to a tribunal ruling last year which reached the same conclusion. Following this rejection, the company says it will take the opportunity to elevate its case to the Court of Appeals or the Supreme Court. Uber is embroiled in other legal battles in the UK, as the company is also in the process of appealing a ban issued by London authorities, who deemed the service unfit due to “public safety and security implications.”
This case has major implications for the gig economy, the long-term viability of which may be called in question due to the potential closing of this employment loophole. Deliveroo and Addison Lee are appealing similar decisions at the moment in the UK, and a similar case is underway in California involving the food-delivery app GrubHub. Additionally, Uber has settled class-action lawsuits on drivers’ employment status in California and Massachusetts, and other states are following suit. Not being on the hook for benefits and regular wages has helped gig economy companies grow at scale while keeping labor costs low and making it easier to deal with fluctuating demand for their services.
London Taxi Protest Against Uber in 2016 (Dinendra Haria/Shutterstock.com)
In a bombshell decision last October, a UK employment tribunal ruled that Uber drivers were employees of the ride-sharing platform, not independent contractors as Uber contends, and as such had the right to paid vacation and a minimum wage. Uber immediately appealed the ruling. On Wednesday, less than a week after losing its license to operate in London, the company was back in court to plead its case for why the court’s understanding of its labor model is misguided, Reuters reports:
At the two-day appeal hearing starting on Wednesday, Uber said its drivers were self-employed and worked the same way as those at long-established local taxi firms. The self-employed are entitled to only basic protections such as health and safety, but workers receive benefits such as the minimum wage, paid holidays and rest breaks. This would add to Uber’s costs and bureaucracy across Britain.
“The position of drivers who use the App is materially identical to the (familiar and long-established) position of self-employed private hire drivers who operate under the auspices of traditional minicab firms,” Uber said in its court submission. Minicabs, or private hire vehicles, sprung up in Britain more than 50 years ago. Minicabs cannot be hailed in the street like traditional taxis, but can be booked for specific times and places via a registered office with a call or via the internet.
The comparison to minicab companies is not going over well with Uber’s UK critics, Bloomberg’s Jeremy Hodges notes, as the company had previously argued before the tribunal that it was a technology company, not a transportation company, and played no role in the transport business beyond connecting its self-employed drivers to customers: