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Uber Happy Cabbies….

3rd November 2016

Uber drivers may be revelling in their victory this week as an employment judge ruled that they were ‘workers’ under UK law and therefore entitled to more rights than Uber cares to give them. The global transport company Uber, valued at $63bn in June 2016, argues it simply provides a technology platform for users and service providers. Dismissing the drivers' employment claims, it has vowed to appeal last weeks’ decision.

UK employment law has an intermediate class of protected worker. This is where an individual does not reach the higher pass mark to qualify as an employee, but is still afforded some degree of protection because in reality they are not carrying on their own business as a self-employed contractor either. In the Uber case, the tribunal considered that the following facts pointed the cabbies towards the middle road ‘worker’ category:

  • Uber imposes conditions on drivers, instructing them on how to do their work and controlling them in the performance of their duties. For instance, Uber asserts ‘sole and absolute discretion’ to accept or decline bookings, sets the default route (drivers suffer penalties if they deviate) and fixes the fare;
  • Save for a few individuals who operated more than one vehicle on their Uber account, each such ‘business’ consisted of an individual with a car seeking to make a living by driving it. This put paid to Uber’s argument that the workers were self- employed individuals running their own business undertaking. The court briskly dismissed Uber’s efforts to evade responsibility on this front concluding “the notion that Uber in London is a mosaic of 30,000 small businesses linked by a common platform is to our minds faintly ridiculous”.

As a result, these happy cabbies will now, amongst other rights, be entitled to 5.6 weeks paid annual leave, the national minimum wage and protection under whistleblowing legislation.

Whilst the London ruling has found in the drivers’ favour, other global jurisdictions have been less charitable to their cabbies and there have been Uber successes. Indeed, this is all very timely as the UK Government launched an inquiry last week into the future world of work focusing on the rapidly changing nature of work and the status and rights of the self-employed and those working in the “gig economy”.

New businesses in the “gig economy” (such as Uber and Airbnb) have entered established markets and are now challenging traditional status categorisation. Whilst it is essential to accurately categorise status to assess the rights of individuals, many argue the law should also encourage the creativity and growth of the increasingly popular and innovative low-cost business models being dished out by the “gig economy”.

After all, the fast growing success of this industry demonstrates that we enjoy choosing which gig to attend just as much as the worker enjoys the flexibility to choose which gig to play at.

The contents of this newsletter are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this newsletter. © Mundays LLP 2016.

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