Landmark case recognises Uber drivers as workers. What are the implications for gig workers in the UK and beyond?

Posted on 01.03.2021
Inside of ride sharing cab

By Rodrigo Carelli, Pablo Aguera, Kelle Howson, Shelly Steward, Matthew Cole, Fabian Ferrari, Alessio Bertolini, Srujana Katta, David Sutcliffe, Akhil Kumar, Mark Graham

Last Friday, February 19th, the UK Supreme Court reached a final verdict on a six-year long case challenging Uber’s classification of ride-hailing drivers as self-employed. The court ruled that Uber drivers are Limb (b) workers.

Under the UK’s employment classification system, workers are entitled to certain employment rights, including the right to national minimum wage, paid leave, protection against unlawful discrimination, and protection for whistleblowing. The benefits of workers are limited compared to those of employees. For instance, as workers, rideshare drivers will still not be protected from unfair dismissal or deactivation, a major problem which is also being raised in a recent Early Day Motion . Nonetheless, this ruling represents a huge step forward in tackling the precarious nature of gig work in the UK.

This judgement comes after a long-running battle in the UK courts led by former Uber drivers and labour organisers Yaseem Aslam and James Farrar, who won an employment tribunal against the ride-hailing multinational in October 2016. Uber has since unsuccessfully appealed the decision four times, taking it all the way up to UK’s highest court. Finally, the Supreme Court has unanimously dismissed Uber’s appeal that the company acted as an intermediary party.  The case will now return to the employment tribunal, which will determine in the coming months the level of compensation for the workers involved in the case, which could be up to £12,000 each.

This victory for workers is the direct result of the tireless efforts of unions and workers’ associations and is a firm testament of the growing power of gig workers organising in the UK and across the world.

Here are some of the most important points of the ruling:

Drivers are in a position of subordination with Uber

The Court justified its decision on the basis that drivers are in a position of subordination and dependency with Uber. This decision was based on five criteria:

  1. Uber sets the fare: the remuneration paid to drivers for their work is set by Uber and workers have no say in this (except choosing when and how much to work). How much “service fee” Uber charges drivers is also set by the company. Uber’s control over remuneration is such that it decides when to charge customers who complain about the worker’s service.
  2. Drivers have no say in the contract terms: The contractual terms are entirely dictated by Uber, with workers having no option for negotiation.
  3. The driver’s choice about whether to accept requests for rides is constrained by Uber: Uber exercises control in two ways: a) by restricting the information provided to the worker (e.g. the driver is not informed about the destination of the passenger until they are picked up), and b) by punishing drivers based on the rate of ride acceptance and cancellation.
  4. Uber exercises significant control over the way drivers deliver their services: While drivers own their car, the technology behind the service is wholly owned and controlled by Uber, and is used as a means to exercise control over worker, for instance through the rating system. If the driver does not maintain an average rating specified by Uber, they can receive a warning and even be terminated. Uber’s rating system is purely an internal tool to manage performance, which the court states “is a classic form of subordination that is characteristic of the employment relationship”.
  5. Uber restricts communications between passenger and driver to the minimum necessary. There can be no contracting between driver and passenger. This also prevents them from developing any relationship beyond that specific ride.

All logged in time should be considered working time

Another important element of the ruling is that the Court considers worker time to include all the time drivers are logged in to the platform. This includes the time workers spend waiting for a ride or travelling between locations. This is in accordance with Fairwork’s principle of Fair Pay, which states that workers should earn a decent income after taking account of work-related costs and active hours, which includes both direct and indirect hours of work.

Worker protection is not incompatible with flexibility

Platforms often mislead public opinion by framing work flexibility as a positive aspect of the gig economy that is incompatible with the protections and rights offered by standard employment. However, the Court has made clear that worker flexibility is not incompatible with labour law, whether they are classified as employees or tier (b) workers. The Court used the example of intermittent or seasonal workers—what should be observed are the conditions at times when they are working, and not when they are not.

The purpose of legislation

More generally, the Court also clarified that the purpose of relevant employment legislation is to provide protection to vulnerable people who have little or no say over their working conditions, due to finding themselves in a position of subordination and dependency. The aim of that legislation is to prevent employers, who are typically in a stronger bargaining position, from finding loopholes or contracting out of those protections. This is important since Uber’s practice of misclassifying their drivers as self-employed for years, has had an outsized effect on migrant and BAME  (Black, Asian and Minority Ethnic) workers, who make up a disproportionate share of the UK’s platform economy . This judgement makes clear that the tactics that Uber and other companies have used to avoid their obligations as employers to workers will not be tolerated.

What next for workers in the gig economy?

This decision represents a challenge not only to Uber, but to the norms and conventions governing the gig economy. The decision adds to a growing list of similar court rulings in Spain, Italy, the Netherlands, France, Switzerland and Belgium, ruling in favour of reclassifying gig workers. Furthermore, this case has opened the way for thousands of other cases by Uber drivers that were awaiting on the decision, and it could also influence similar challenges against other delivery and ride-hailing platforms in the UK and beyond. Already the London-based law firm Leigh Day, who is also representing UK drivers seeking compensation, and Johannesburg-based Mbuyisa Moleele Attorneys have announced plans to launch a similar class action lawsuit against Uber in South Africa.

However, Uber has signalled no intention to review their business model to comply with the Court mandate. In a statement released on the day of the ruling, Uber claimed that the decision only affects a small group of drivers using the app in 2016, and that they have made significant changes to their business since then that challenge the applicability of the ruling. We have seen platform companies introduce strategies to circumvent labour laws in other countries. Uber could, for instance, adopt the strategy it used in Germany and Poland of sub-contracting drivers through an opaque system of transport intermediaries. The lead claimants, as part of the ADCU union, have already stated taking action to prevent Uber from dismissing the ruling by requesting London mayor Sadiq Khan in an open letter to demand Uber’s compliance as a condition for its Transport for London license.

The Court decision arrived just as the European Commission started a consultation process on the regulation of platform work on 24 February. As signalled by Uber’s recent white paper, the company has already started lobbying regulators for a ‘third way’ that carves out an exemption from EU labour laws. Gig work platforms are deploying a similar strategy in Europe as they did recently in California, where they spent over USD $200 million pushing for a ballot measure, Proposition 22, which exempted delivery and transport platform workers from classification laws in exchange for stripped-back versions of workplace benefits that have already been shown to be inadequate. Uber could attempt to do the same in the UK, by pushing for a change in legislation to redefine the status of workers.

Perhaps, the most important message of this judgement is that it reinforces the role of the labour law in protecting vulnerable workers who have little power relative to their employers. The Court dismantled the narratives built by companies in their attempt to circumvent their legal duty to protect their workers. It is the law, not platforms, which gets to decide who qualifies for employment protections. At the same time, enforcement should not be left to individuals going through the courts. This judgement represents an important contribution to the public debate about the need of platforms to take responsibility for the protection of their workers. At Fairwork, we will continue to work with platforms, policymakers and workers’ organisations across the world to promote fair and decent conditions in the platform economy.