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The Supreme Court of the United Kingdom has ruled that Uber drivers are legally workers, not self-employed contractors, as Uber has argued in courts around the world. The ruling means drivers in Britain and Northern Ireland are eligible for additional benefits and protection, including a minimum wage.
Uber claims that it merely acts as a technology provider and broker between independent managers and their customers, just as eBay facilitates sales between buyers and sellers. According to Uber, this means that he does not owe his managers benefits such as unemployment insurance, managers do not have to reimburse their costs, and are not bound by the minimum wage and overtime rules. Uber emphasizes that its drivers can freely decide when, where and how much they work.
But critics point out that Uber exercises far more control over its drivers – and over the driver-passenger ratio – than a conventional platform such as eBay or Airbnb. Uber sets rates, collects payments from customers, collects its own fee and hands over the rest to the driver. This requires drivers to accept a large majority of the rides offered to them. It handles customer complaints and kicks drivers off the platform if their average rating drops too low.
“A position of subordination and dependence”
So the British High Court on Friday ruled that Uber executives are legally Uber workers, not independent business owners who happen to get most of their business from Uber.
“Drivers are in a position of subordination and dependence on Uber, so they have little or no ability to improve their economic position through professional or enterprise skills,” said Lord George Leggatt, one of the judges of the Supreme Court. delivered the verdict.
One consequence is that Uber drivers have to pay at least the minimum wage. And importantly, the Supreme Court has ruled that drivers should not only be paid for the time they drive, but also for the time they are logged into the app and waiting for another fare.
This could have significant consequences for Uber’s relationship with drivers. While executives are likely to appreciate a minimum earnings guarantee, it could also mean that Uber will limit when executives are allowed to work – as too many executives online during low-demand periods can cost Uber more than it earns in rates.
According to the Financial Times, the ruling means that Uber must draw up a pension program for its drivers. Thousands of drivers could be eligible for reimbursement due to the ruling.
A global struggle
In recent years, Uber has been battling the same issue in jurisdictions around the world. California passed legislation in 2019 that requires Uber (and Lyft) to treat its executives as employees. Uber and Lyft fought the law in court for the next year and delayed its implementation until voters overturned it in a November 2020 vote.
According to the Financial Times, British law has three legal categories – employees, workers and independent contractors. Workers in the UK have more rights than independent contractors, but not as much as employees. Labor law in the US generally has only two categories – employees and independent contractors.
Last year, the French Supreme Court ruled that Uber executives should be treated as employees. Spanish courts reached a similar ruling in September. Uber is facing a lawsuit in Canada over the same issue.
Uber is also facing the legal status of its drivers in Massachusetts.
Of course, Uber could eventually undo some of these rulings in the courts or national legislatures, or through referendums. But it seems unlikely that Uber will gain the upper hand in all these battles. Which means that unless Uber wants to abandon the broad sections of the hard-won area, it will have to figure out how to make its business model work while executives are considered employees.
This could mean higher prices for consumers and less flexibility for drivers. However, lawyers say managers will eventually benefit from the same legal protection as most other workers.