The gig economy: reining in a giant

It’s been hard to miss the news coverage given to the tribunal decision on the employment rights of Uber drivers.

When it comes to disputes over employment classification, it’s generally been a case of taxpayers wanting to establish self-employed status to benefit from the related tax advantages. However, the Uber drivers involved argued that they should be treated as employees, wanting entitlement to the national minimum wage, company pension contributions, holiday pay and sick pay.

The decision, if it stands, only applies to the Uber drivers involved in the case, but it would mean Uber having to amend contracts for all 40,000 drivers in the UK. The ramifications could extend throughout the so-called gig economy, to groups such as self-employed delivery drivers, food couriers, builders and even hairdressers. But it would depend on the working conditions in each case and whether workers want to be treated as employees.

Uber argued that it is a technology company rather than a taxi provider, and that its drivers are independent self-employed contractors who use the technology to make money. The company does not own a single vehicle. However, the tribunal dismissed as ridiculous the claim that it simply linked thousands of small businesses through a technology platform. Many of the facts do support a case for self-employment. Uber drivers provide their own vehicles, pay for all the related costs (such as private hire insurance), are permitted to work independently or for other companies, do not wear an Uber uniform and are free to accept work only when they want to by turning the Uber App on or off.

However, when the Uber App is turned on, the relationship is one of employment with drivers generally having to accept most of the work offered to them. Drivers do not know the name of passengers, do not know the destination until a journey begins, have little control over the route, have no control over the fee charged, do not collect the fee and are discouraged from accepting tips. Uber, rather than the driver, accepts the risk of any financial loss and deals with passenger complaints. The company exerts considerable control over drivers, even going as far as accepting only a limited choice of vehicles.

Uber has downplayed the decision and will be taking the case to the employment appeal tribunal. There could then be further hearings in the court of appeal and the supreme court. Watch this space.