Uber suffered a major labor defeat in its largest European market on Friday when the Supreme Court in Britain ruled that drivers should be classified as workers entitled to a minimum wage and holiday time.
The case has been closely watched because of its implications for the gig economy, in which companies like Uber rely on an extensive workforce of independent contractors to provide car rides, deliver food and clean homes.
Uber and other gig-economy companies say their model gives people the flexibility to choose when they work, while critics say it has eroded job protection and the traditional relationship between employees and employees.
The court ruled that while Uber said it was only a technology platform that connects drivers with passengers, it acts more like an employer by setting rates, allocating rides, requiring drivers to follow certain routes and a rating system used to discipline managers.
“Managers 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 entrepreneurial skills,” said Lord George Leggatt of the Supreme Court while reading the ruling. . “In practice, the only way they can increase their earnings is by working longer hours while constantly complying with Uber’s performance metrics.”
For the past five years, Uber has been fighting for the efforts of drivers in Britain to be classified as workers, and appealed the decision to the country’s Supreme Court. The ruling on Friday is expected to affect only the 25 executives filing the case, but is seen as a precedent for others nationwide.
Following the decision, a labor court will decide how the drivers will be rewarded and how the ruling will affect other drivers in the future.
Uber tried to reject the ruling, saying it would press the labor court to limit its scope.
The company said the ruling should affect only a small number of managers, and that it does not expect it to classify all of its managers as workers.
The company said it would argue against the tribunal that it has made a number of changes to its business model to provide more protection to employees since 2016, when the case was filed, such as offering managers insurance if they are ill or be injured. and to allow drivers to take certain rides without a ride.
“We are committed to doing more and will now consult with every active driver in the UK to understand the changes they want to see,” said Jamie Heywood, Uber’s Regional General Manager for Northern and Eastern Europe, in said a statement.
But some employment advocates have said the decision has wider implications than Uber has suggested, and that it represents an important moment in the broader labor debate over gig workers, whose role in the economy grew during the pandemic.
The case has “far wider implications than the Uber case alone and is likely to be seen as a watershed moment in labor rights for workers in the gig economy,” said Schona Jolly, a human rights and labor law lawyer at Cloisters Chambers in London. .
Nigel Mackay, a partner at Leigh Day, the law firm representing the executives, said the decision would have a broad impact and that Uber should start offering a minimum wage and vacation time to executives, or to reduce the risk of to experience a wave of similar cases from others. He said none of the changes Uber has made since 2016 would affect the Supreme Court’s central findings that Uber executives are workers. ‘
“Any driver of Uber can now join the claim to claim compensation for Uber’s failure to provide paid leave and to ensure that the drivers are paid at least the national minimum wage,” he said.
Uber drivers are currently paid per ride, and Uber charges a 20 percent fee from each fare. Drivers must pay for their car, insurance and taxi licenses.
Uber and other gig-economy companies have fought off efforts in other parts of the world to classify workers as employees with mixed success.
In France, Uber lost a ruling in the country’s high court last year that a driver has the right to be considered an employee. But in California, Uber and other companies in the November election funded a successful ballot box to exempt them from a law that would require them to hire drivers and pay for health care, unemployment insurance and other benefits.
Britain, where Uber has about 60,000 drivers, was one of the company’s most important markets, but also a source of legal problems. In London, where Uber cars are just as common as traditional black taxis, the city transport regulator has twice twice taken steps to revoke Uber’s taxi license before the company agreed to new safety policies.
Mr. Mackay said he hopes the decision will provide support to workers and lawyers seeking stronger legal protection for workers in other countries.
“People around the world will follow this decision,” he said.