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.
“Today’s decision will not just affect Uber but will have a huge impact on other gig economy models,” employment lawyer Glenn Hayes tells Bloomberg. “Uber have been keen to treat this case as being discrete and have tried to suggest that it has no bearing on the rest of its workforce of around 50,000 drivers in the U.K. That is nonsense.” Other legal experts are advising gig economy employers to be proactive in light of the ruling, while also cautioning that the full ramifications won’t be known until higher courts weigh in.
Uber claims 80% of its UK drivers would prefer to be self-employed, favoring autonomy over the added burdens of employment. Tom Elvidge, Uber’s acting UK GM, believes the company has taken the right steps towards improving conditions for its drivers, telling the Guardian that they have been given more control via changes to the Uber app over the last year, and that the company has worked to provide drivers with access to illness and injury coverage. So far, the British government is clearly looking for a lot more.