The highest court in the UK has ruled that Uber drivers can’t be considered self-employed, a result that could have wide-ranging affects on the larger gig economy. Here’s what you need to know.
What was the court ruling on?
Uber lets people book taxis and delivery services through its app, then lists these jobs for drivers to accept. The company has always considered its UK drivers to be self-employed and paid them for each ride or delivery they carry out, rather than paying a fixed wage.
The UK’s Supreme Court has now ruled against this, saying that Uber drivers must be considered “workers”. This means unlike self-employed people, they should receive a minimum wage and holiday pay. A “worker” is slightly different to an “employee” under UK law, however: workers don’t have the right to sick pay and maternity or paternity leave.
Why was the case in court?
Two Uber drivers took the company to an employment tribunal in London in 2016 and won the right to be considered workers. Uber appealed this, but lost the case. It lost another appeal in the High Court in 2018. Today’s hearing at the Supreme Court was the final legal avenue for the company.
What does this mean for Uber in the UK?
James Farrar, one of the drivers from the original tribunal, said the ruling will “fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery”.
The drivers from the case will now be considered workers from the time they log on until they log off, not just when they are carrying a fare.
But the decision isn’t the end of the matter. The company has already said that it doesn’t believe the ruling applies to all current and future staff, but only to those involved in the original tribunal. Jamie Heywood at Uber said in a statement that the case “focused on a small number of drivers who used the Uber app in 2016”.
This interpretation will be tested very soon, as there are thousands of similar employment tribunal cases from other Uber drivers waiting to be heard. They had all been paused to await the outcome of this test case.
Will Uber increase its prices to cover the extra cost?
Despite its large share of the market for taxi apps, Uber made a loss of $6.8 billion in 2020, so increased costs could force it to raise prices. Last year, Uber CEO Dara Khosrowshahi said costs could double if California imposed measures that required drivers to be treated as employees.
Will this affect other gig-economy technology companies?
The decision from the Supreme Court was unanimous, with all seven judges ruling that the contract signed by the drivers could be seen to deliberately avoid giving them employment benefits as workers.
The decision sets a precedent for any other case brought against companies operating in the same way. A 2019 survey found that 4.7 million people work in the UK gig economy, and it is possible that this ruling could also see them apply for stronger employment rights.
More on these topics: