UK Tribunal Rules Uber Drivers Are Employees

UK Tribunal Rules Uber Drivers Are Employees

A labor tribunal in the UK on Friday ruled that Uber’s drivers are employees of the ridesharing company and have the right to paid vacation and a minimum wage, the Associated Press reports:

The GMB labor union says the decision will have a “major” impact on the drivers, who argued they should get the labor rights of employees, not self-employed workers. The Central London Employment Tribunal’s decision Friday affects as many as 30,000 drivers. Uber argues it is a technology company that links self-employed drivers with people who need rides. It also says drivers should seek arbitration in the Netherlands, where Uber’s European operations are based.

“Uber drivers often work very long hours just to earn enough to cover their basic living costs. It is the work carried out by these drivers that has allowed Uber to become the multi-billion-dollar global corporation it is,” said Nigel Mackay, the attorney from law firm Leigh Day who is representing the workers. “We are pleased that the employment tribunal has agreed with our arguments that drivers are entitled to the most basic workers’ rights, including to be paid the national minimum wage and to receive paid holiday, which were previously denied to them.”

Uber intends to appeal the ruling, which, if it were upheld, could have major consequences for Uber and other gig economy platforms in the UK. Uber has long maintained that its drivers are independent contractors or self-employed business owners and that it does not have an employer-employee relationship with them as it does not dictate when or where they work. The drivers who have brought lawsuits against the company in several US states as well as the UK disagree—in this case, the plaintiffs’ lawyers argued that because drivers receive ratings and are not told in advance where riders wish to be dropped off, they are not operating as self-employed businesses as Uber claimed. One study concluded that features of the Uber app exercise enough control over drivers’ behavior to constitute “algorithmic management.”

Ivana Kottasova at CNN Money touches on what the ruling means for Uber, its drivers, and other firms:

Under U.K. law, [drivers] could even claim back pay for the period they’ve already worked for Uber, said Ed Marchant, an employment lawyer at IBB solicitors. “From Uber’s perspective the substantial additional cost resulting from the judgment means that they are likely to significantly change their business model and/or pass these extra costs onto customers,” Marchant said. …

The GMB said it is already reviewing contracts at other companies.

At the CIPD, Georgi Gyton delves into the potential ripple effect:

Lee Rogers, an associate in the employment team at legal firm Weightmans, said the judgment was not only likely to have serious ramifications for Uber, “but for many organisations that operate in the so-called ‘gig economy’”. However, he said this was not likely to be the end of the story. “Given what is at stake, not just for Uber, but for the industry as a whole, the decision is likely to be appealed,” he warned, adding that today’s ruling could “open the floodgates” for further claims from other workers in similar positions.

Despite the likely impact on other organisations, Dominic Holmes, partner at Taylor Vinters, said there was “no reason, in principle, why flexible business models operated by Uber and other market disruptors in the ‘gig economy’ cannot work”.

“There is increasing consumer demand for the innovative services they offer, coupled with the desire of many people to work on their own terms. However, innovators need to be very clear about how they want to run their businesses,” he said.

One company that could be affected is Deliveroo, a platform that uses freelance couriers to deliver takeout meals to customers, Stephen Simpson notes at Personnel Today:

Other large businesses that operate in a similar way include Deliveroo, which engages couriers to deliver takeaway food to customers. Deliveroo hit the headlines in July after reports that it is including a clause in its agreements with couriers warranting that they will not bring a legal claim challenging their employment status. Legal experts have suggested that the clause, which could put couriers off bringing employment tribunal claims arguing that they are workers, is unenforceable.

Another gig economy business, City Sprint, has its own court case coming up in which its couriers are also challenging their classification as self-employed. Guardian commentator Aditya Chakrabortty hears from one of the plaintiffs in that case:

A few months back, I interviewed a courier called Mags Dewhurst, whose job is biking urgent medical supplies to hospitals around London. Like most other cycle couriers and drivers, she’s also classified as self-employed; she’s also fighting to change her status. Next month she will be battling her company, CitySprint, in court.

Dewhurst has a strong case. She wears a uniform with a logo, clocks in with a controller each morning. And then: “For 50 hours each week, I’m told what to do.” She’s been impatient for the Uber verdict, knowing that it will be of huge symbolic importance for her own case. On Friday afternoon, I texted her: How pleased are you? Her reply: “On a scale of 1-10? A GAZZILLLLION.”