HR 29 September 2017

How will Uber’s legal controversies effect the status of gig economy workers?

Uber
Uber lost its operating licence in London on 23 September
Here, employment law director at Peninsula, Alan Price, asks what implications there are for Uber drivers and other UK gig economy workers following several high-profile legal cases brought against the embattled ride sharing platform.

Almost immediately after losing their operating licence in London on 23 September on safety and security grounds, Uber were once again in the news, as their appeal regarding the employment status of two of their drivers has been heard in the Employment Appeal Tribunal (EAT).

Uber, one of the giants of the UK’s gig economy, has faced a number of legal controversies across the world in recent times.

One such legal battle, involving a tribunal claim brought by two drivers who argued that Uber had wrongly classified their employment status, was the highest profile tribunal claim in a number of claims brought against companies with similar operating methods.

The drivers were successful at the employment tribunal and it was judged that they were workers, rather than self-employed contractors as argued by Uber.

The outcome of the original tribunal had serious implications for Uber. It meant that the drivers would be entitled to certain employment rights. Those rights included the right to national minimum or living wage for hours worked, paid holidays, rest breaks and pension rights if eligible.

Uber would, in theory, have to make arrangements to provide these rights to all drivers across the country, with 30, 000 located in London alone, or face a significant number of tribunal claims. In addition, their workers would also be entitled to receive back pay in many circumstances.

Uber have now argued at the EAT that they are not a gig economy employer but are, in contrast, acting in an identical way to traditional minicab firms with self-employed drivers.

In these circumstances, minicab firms act as the driver agents by referring the passenger to the driver and receiving payment for this. This does not create an employment relationship, and the driver does not become a worker or employee.

The decision of the EAT will have far-ranging implications, whichever way they decide. If they agree with Uber and apply the traditional minicab firm arrangement to their business model, their drivers will be reclassified as self-employed. Not only will Uber drivers lose their newly established worker rights, other so-called gig economy employers may also apply this approach to their business models.

Most notably, Addison Lee, a minicab company who lost a claim against two drivers claiming to be workers, may apply this approach to their (very similar) model.


 
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