Uber has lost another appeal against a landmark 2016 UK employment tribunal ruling that found a group of drivers to be workers, rather than self-employed, meaning they’re entitled to benefits such as holiday pay and the National Minimum Wage.
The court of appeal today upheld previous decisions classifying the drivers as workers.
Although the ruling was not unanimous and Uber has been granted permission to appeal direct to the Supreme Court.
Commenting on the ruling in a statement Uber said:
This decision was not unanimous and does not reflect the reasons why the vast majority of drivers choose to use the Uber app. We have been granted permission to appeal to the Supreme Court and will do so.
Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed. Drivers who use the Uber app make more than the London Living Wage and want to keep the freedom to choose if, when and where they drive. If drivers were classified as workers they would inevitably lose some of the freedom and flexibility that comes with being their own boss.
The original tribunal dismissed Uber’s argument that its platform merely supplies drivers with “business opportunities” — calling it a “pure fiction which bears no relation to the real dealings and relationships between the parties”.
But Uber points out that one of the appeals court judges, Lord Justice Underhill, expressed the view that the relationship it argued for “is neither unrealistic nor artificial”, accepting it being “in accordance with a well-recognised model for relationships in the private hire car business”.
The company also points to a number of changes to its business since the 2016 ruling, such as offering insurance cover for drivers.
“Over the last two years we’ve made many changes to give drivers even more control over how they use the app, alongside more security through sickness, maternity and paternity protections. We’ll keep listening to drivers and introduce further improvements,” its statement adds.
On the other side, co-lead claimant James Farrar, a former Uber driver who is now chair of the Independent Workers Union of Great Britain (IWGB), welcomed the ruling — but also criticized Uber for “delaying inevitable changes to its business model”
In a statement Farrar said:
I am delighted today’s ruling brings us closer to the ending Uber’s abuse of precarious workers made possible by tactics of contract trickery, psychological manipulation and old-fashioned bullying. However, I am dismayed that implementation of worker status for drivers is further delayed while Uber seeks yet another appeal. This is nothing more than a cynical ploy to delay inevitable changes to its business model while it pursues a record breaking $120 billion stock market flotation. It’s time for Uber to come clean with all its stakeholders and abide by the decision of the courts.
Fellow co-lead claimant, and secretary of the IWGB’s United Private Hire Drivers branch, Yaseen Aslam, also expressed frustration at the protracted legal fight — writing:
I’m delighted with today’s ruling, but frustrated that the process has dragged on for over three years. It cannot be left to precarious workers like us to bring companies like Uber to account and despite the personal price we have had to pay, we are the lucky ones. We know of many that are under such hardship, that it would be unimaginable for them to take a multi-billion pound company to court. It is now time for the government and the Mayor of London to act and stop letting companies like Uber take them for a ride.
Uber lost its first appeal against the 2016 tribunal ruling a year ago but vowed to keep on appealing.
At the same time unions are keeping up the pressure on the ride-hailing giant, calling a drivers strike two months ago and urging Uber to immediately apply the tribunal judgement — and implement “employment conditions that respect worker rights for drivers, including the payment of at least the minimum wage and paid holidays”.
Uber has previously told policymakers that if it was required to pay such benefits to the circa 50,000 drivers operating on its platform in the UK it would cost its business “tens of millions” of pounds.
Commenting on today’s decision, Rachel Farr, a senior professional support lawyer in the employment, pensions & mobility group at Taylor Wessing, suggested the judgement could have ramifications for other gig economy platforms, bolstering those that argue such workers “deserve a better deal”.
Though she also emphasized the case-by-case nature of employment classification decisions.
“This decision will have an impact both across the gig economy and in more traditional sectors and will give encouragement to claimants in other cases which are awaiting a hearing or stayed pending the outcome,” she said in a statement. “But just because Uber lost, it doesn’t mean that others will: Each case will be considered on its specific facts, including the contractual terms between the parties and what actually happens in practice.”
Food delivery startup Deliveroo, for example, has so far prevailing in UK courts against union-backed attempts to gain collective bargaining rights by challenging its classification of couriers as independent contractors.
Last year a UK employment tribunal judged that Deliveroo riders could not be considered workers because they had a genuine right to find a substitute to do their job for them.
At the same time the government has been consulting on updating employment law to take account of tech-fuelled changes to working patterns. And earlier this week it set out a labor market reform package — billing it as a major upgrade to workplace rights.
Although unions dubbed the plan heavy on spin and weak on substance, reiterating accusations that gig economy giants are getting fat by exploiting workers.
Reacting to the Uber decision today, Frank Field MP — who has conducted an inquiry into gig economy pay and conditions (and whose report on Deliveroo likened its asymmetrical model to 20th century dockyards) — dubbed it “another stunning victory for workers against the exploitation and poverty wages that stem from bogus self-employment in the gig economy”.
“The Government’s job now is to ensure justice is delivered for workers all year round, not just at Christmas,” he added.
This week the government said it’s committed to legislate to improve the clarity of the employment status tests — to “reflect the reality of the modern working relationships” — which could have major implications for platform giants like Uber.
Although at this stage it’s not clear what the reformed employment tests will look like, nor how its approach might end up redrawing the line for workers. So there’s much tbc there.
“The long-drawn history of the Uber case shows that the current law is not easy for businesses and those who work for them to understand. Clarifying such a complex area of law is easier said than done and it remains to be seen what this promise will actually mean,” noted TaylorWessing’s Farr.
“However, what is certain is that there is an evolving consciousness around the nature of work within an increasingly flexible and digitalised economy. The future of work will change and employers sticking to arguably outdated relationships with their employees are likely to be left behind.”
Congestion charge looming
In other news today that’s also likely to impact Uber’s business, London’s mayor and transport regulator, TfL, have announced they will lift the congestion charge exemption for private hire vehicles (PHVs), as part of a strategy to tackle pollution and congestion in the city.
From April 8 only zero emission-capable vehicles will be exempt from the charge in London.
PHVs that are not wheelchair accessible will also have their exemption removed. So even Uber drivers using Prius (or similar) electric hybrid vehicles will still have to pay the charge from early next year.
The change of policy, which follows a public consultation, is expected to reduce the number of PHVs circulating in London’s Congestion Charging Zone by up to 8,000 per day.
The mayor’s target is a 65% reduction in taxi emissions by 2025 with the stated aim of protecting the health of Londoners.
Air toxicity in the UK capital has been exceeding legal limits for years, coinciding with a big rise in the number of PHVs on London’s streets after Uber’s 2012 launch kicked off the ride-hailing craze.