Gig Economy 2.0

19 February 2021


Cogito Ergo Non Serviam

UK Court Says Uber Drivers are Employees


OIn a blow to its business model, Uber suffered a defeat in the British Supreme Court, which held that its drivers are not independent contractors. Instead, they are employees entitled to all of the benefits and protections that status affords. The ruling applies to the 25 drivers who brought the case, according to the company and not all of its 60,000 drivers. However, management will enter discussions with them, and in the end, the drivers will get the protections even if the employee status is avoided. This will upset the basis of the entire gig economy in the UK, and that is probably for the best.

Lord Leggatt delivered the unanimous verdict of the court. In its judgment, the court considered:

  • Uber set the fare which meant that they dictated how much drivers could earn;

  • Uber set the contract terms and drivers had no say in them;

  • Request for rides is constrained by Uber who can penalise drivers if they reject too many rides; and

  • Uber monitors a driver's service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve.

Moreover, the court said that the contracts the drivers must sign "can be seen to have as their object precluding a driver from claiming rights conferred on workers by the applicable legislation."

James Farrar, the co-lead claimant and general secretary of the App Drivers and Couriers union, said, 'This ruling will fundamentally reorder the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery. Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.

'The reality has been illegally low pay, dangerously long hours and intense digital surveillance. I am delighted that workers at last have some remedy because of this ruling, but the government must urgently strengthen the law so that gig workers may also have access to sick pay and protection from unfair dismissal."

Jamie Heywood, Uber’s regional general manager for northern and eastern Europe, said, "We respect the court’s decision which focused on a small number of drivers who used the Uber app in 2016. Since then we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.

"We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see."

The biggest impact will be on the drivers themselves, but the ruling will affect gig workers and gig companies across the UK (and may set precedents for the rest of the world). Any gig company that requires a signed contract that has no input from the would-be contractor is now at risk of losing a similar court case. Setting of rates, amount of work and quality of service are all now negotiable. Some firms will have to start charging VAT. Others may simply choose to close down.

The Uber app and similar technological tools have created opportunities where none have existed before, and for that, the world should be grateful. At the same time, these opportunities must be win-win situations or they can damage the underlying social fabric. One does not believe for a minute that Uber deliberately set out to take advantage of its workforce, but that is how it turned out. Uber now has a chance to fix things. This journal hopes the company succeeds and flourishes as a result.

© Copyright 2021 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.

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