The UK Supreme Court ruled on Friday February 19, that cab hailing app, Uber drivers are workers and not self-employed and must be treated as such.
This is a landmark ruling which means that thousands of Uber drivers are set to be entitled to minimum wage and paid holiday.
Uber was taken to the UK’s Supreme Court by former Uber drivers, James Farrar and Yaseen Aslam. These two were seeking the court’s interpretation whether they are classified as workers or self-employed.
The drivers originally won an employment tribunal against Uber in October 2016. Uber later appealed to the Supreme Court after losing three earlier rounds and the company’s share price fell 1% on Wall Street’s after the ruling.
Uber now runs out of options considering that Supreme Court is the highest court of the land.
“I think it’s a massive achievement in a way that we were able to stand up against a giant,” said Mr Aslam, president of the App Drivers & Couriers Union (ADCU).
“We didn’t give up and we were consistent – no matter what we went through emotionally or physically or financially, we stood our ground.”
Lord Leggatt delivered his judgement saying that the Supreme Court unanimously dismissed Uber’s appeal that it was an intermediary party and stated that drivers should be considered to be working not only when driving a passenger, but whenever logged in to the app.
The court considered several elements in its judgement:
1. Uber set the fare which meant that they dictated how much drivers could earn.
2. Uber set the contract terms and drivers had no say in them.
3. Request for rides is constrained by Uber who can penalise drivers if they reject too many rides.
4. 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.
The above elements informed the Supreme Court that drivers were in subordination to Uber where the only way they could increase their earnings was by working longer hours.
Jamie Heywood, Uber’s Regional General Manager for Northern and Eastern Europe, reacted to the ruling as follows:
“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.”
In their defense, uber argued that they are a booking agent which hires self-employed contractors that provide transport services.
Uber does not pay 20% VAT on fares considering that they are not classified as a transport provider. The Supreme Court ruled that Uber has to consider its drivers “workers” from the time they log on to the app, until they log off.
“This is a win-win-win for drivers, passengers and cities. It means Uber now has the correct economic incentives not to oversupply the market with too many vehicles and too many drivers,” said James Farrar, ADCU’s general secretary.
“The upshot of that oversupply has been poverty, pollution and congestion.”
“It took us six years to establish what we should have got in 2015. Someone somewhere, in the government or the regulator, massively let down these workers, many of whom are in a precarious position,” he Mr. Aslam.
“We’re seeing many of our members earning £30 gross a day right now,” he said, explaining that the self-employment grants issued by the government only cover 80% of a driver’s profits, which isn’t even enough to pay for their costs.
“If we had these rights today, those drivers could at least earn a minimum wage to live on.”
Rachel Mathieson, senior associate at Bates Wells, which represented Farrar and Aslam, said her firm’s position was that the ruling applies to all 90,000 drivers who have been active with Uber since 2016.
“Our position is that the ruling applies to all of their drivers at large,” she said.
“However, we don’t think it stops there. The judgement today underscores some very important principles in respect to workers.”
This favorable ruling for uber drivers is likely to set precedent around the globe with similar cases expected to be filed against Uber.
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