Uber loses UK court battle, told drivers must be classified as workers

19 Feb 2021216 Views

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The ruling means Uber drivers will be entitled to certain employment rights such as minimum wage and holiday pay.

After a lengthy legal battle, ride-hailing company Uber has been dealt a major blow regarding how it classifies its drivers.

Today (19 February) the UK’s supreme court ruled against Uber, stating that the company’s drivers should be classified as workers and not independent contractors.

The ruling from the top court follows an almost five-year legal battle. An employment tribunal ruled in favour of a group of former Uber drivers in 2016 who claimed they were entitled to certain employee rights and protections, such as minimum wage and holiday pay. Uber appealed the decision to the UK’s employment appeal tribunal, the court of appeal and finally to the supreme court.

In the supreme court’s ruling, it considered several elements and found that Uber was in enough control of its drivers that they could be classed as workers rather than contractors. The court said that Uber set the contract terms, dictated how much drivers earn because it sets the fares, could penalise drivers if they rejected too many rides and monitored drivers’ service.

Additionally, the court ruled that Uber must consider its drivers as workers from the time they log on to the app until they log off. This means drivers will be counted as workers in between journeys and not just when they have passengers in the car.

Gig economy wars

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Uber has long insisted that its drivers are self-employed independent contractors and has been fighting to maintain its gig economy model.

Last year, the company was locked in a similar legal fight in California, when a judge ruled that Uber and Lyft must classify their drivers in that state as employees. However, Proposition 22 was passed in California in November 2020, meaning that drivers, couriers and others working in the gig economy could remain as independent contractors and do not have to be reclassified as employees.

In an attempt to get ahead of potential changes in Europe, Uber published a paper earlier this week urging EU lawmakers to maintain the independent contractor status of its drivers.

Today’s ruling is a major blow for the company as it will now have to go back to the employment tribunal to determine compensation for the drivers involved in the case.

The ruling also has wider implications for the gig economy in the UK, which stretches beyond Uber drivers. In 2019, the UK gig economy was said to have 4.7m workers, including those working for companies such as Bolt and Deliveroo.

Jenny Darmody is the deputy editor of Silicon Republic

editorial@siliconrepublic.com