Uber latest legal bid
It will be interesting to see how this pans out with their appeal to the Supreme Court. There is potential for it to be upheld and so will have a significant impact on their current business model as well as ramifications for the wider gig economy.
There is clearly a place for flexible arrangements in the gig economy, however, the EAT obviously felt that the employment documentation did not reflect the actual reality of the employment relationship. Uber claims that they simply facilitate the deal between the driver and passenger via their app and take a commission for doing so. The level of control that they have over their drivers though was one of the key factors that led to the EAT decision.
If the decision is upheld, then the drivers will be entitled to compensation and it asks the question whether they will be able to modify their model and still be able to operate in the UK.
The following article from theconversation.com covers some of the key points in more detail:
Uber supreme court battle: even if drivers win, they need new laws to protect them
The UK supreme court has just heard an appeal from Uber that has far-reaching implications for UK drivers and the wider gig economy. Uber wants to overturn an employment tribunal ruling from 2016, which improved the lot of its drivers by classifying them as “workers” instead of “self-employed contractors”.
If upheld, many Uber drivers can look forward to an hourly minimum wage, paid breaks, sick pay and holiday pay, and an average £12,000 in compensation for their past work – all provided they lodge a claim.
Drivers with other companies won’t automatically benefit from the ruling, though it will create a strong precedent for similar claims. The 2017 Taylor review of modern working practices highlighted the need to “be clearer about how to distinguish workers from those who are legitimately self-employed” as one of its “seven steps towards fair and decent work”.
Uber last challenged the ruling in the court of appeal in 2018, but lost the case. If it loses in the supreme court, the original tribunal finding should be implemented.
Many taxi drivers are in a very precarious position in their work, as both my research team and others have shown. Uber controls fares, aiming to be significantly cheaper than its competitors, and takes a 25% commission, which limits drivers’ earnings per mile. Our research suggests that after purchasing, maintaining and running their vehicle, some Uber drivers in England earn as little as £5 an hour.
Some of our industry participants suggested that Uber has contributed to a systematic oversupply of drivers by attempting to ensure a driver is available whenever required. Local private-hire competitors have adopted some of the American company’s practices, such as offering bookings via an app, although their relationship with drivers was described to us as less impersonal. Other international private-hire platforms like Ola, Bolt and Kapten are also entering the British market.
We found indications that the increasing number of drivers has combined with low earnings to lead some private-hire drivers to illegally “ply for hire”: they pick up fares without a pre-booking, which invalidates their insurance. This increases competition for Hackney drivers, some of whom said they now work significantly longer hours to survive. Forcing Uber to guarantee an hourly minimum wage may help by removing its incentive to recruit so many drivers.