Taxi app firm Uber must classify its drivers as workers, entitling tens of thousands of drivers to minimum wage and holiday pay, the UK Supreme Court held on Friday.
Under s. 230(3) of the Employment Rights Act 1996, a “worker” is anyone employed
(a) under a contract of employment or
(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.
In 2016, an employment tribunal found that Uber drivers satisfied the limb (b) worker test. Consequently, Uber brought an appeal to the Employment Appeal Tribunal and the Court of Appeal, before approaching the Supreme Court.
Uber stated that its drivers are independent contractors, arguing that Uber BV acted solely as a technology provider with its subsidiary, Uber London, acting as a booking agent for approved drivers. When a ride is booked through the Uber app, Uber’s argument continued, a contract is made directly between the driver and the passenger, with Uber taking a 20 percent “service fee.” Uber relied on the wording of its contracts, and emphasized that its drivers are free to choose their working hours and times.
The Supreme Court dismissed Uber’s appeal. It considered that the service offered by the drivers is very tightly defined and controlled by Uber, with the former having little or no ability to improve their economic position through professional or entrepreneurial skill. The judgment provides five key findings that supported the conclusion that the claimants were working for and under contracts with Uber:
1. Uber sets the fares charged by drivers, from which drivers cannot deviate
2. The contract terms on which drivers perform services are imposed by Uber without input from the driver
3. Uber constrains the driver’s choice concerning the acceptance of rides, for example through monitoring the acceptance and cancellation of trip requests and imposing a penalty if too many trips are declined or cancelled
4. Uber significantly controls the way in which services are provided, for example through terminating a driver’s relationship with the company if they receive a below-average rating from passengers
5. Uber restricts communications between drivers and passengers, taking active steps to prevent drivers from developing relationships with passengers
Claimants Yaseen Aslam and James Farrar have released statements praising the decision, with Farrar stating, “This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery.” Academics have echoed this sentiment. The judgment brings the UK in line with a number of other European jurisdictions. The position is not, however, universal, an example being the November classification of Californian gig workers as independent contractors.