by James Bloodworth
Friday, 19
February 2021

Uber: the end of the road for the gig economy model

The Supreme Court's ruling could have profound implications for other companies
by James Bloodworth
The Supreme Court ruled unanimously against Uber

The Supreme Court has dismissed Uber’s appeal against an employment tribunal ruling that its drivers must be classed as workers rather than self-employed contractors. The verdict has been a long time coming and means Uber drivers are entitled by law to a minimum wage and annual leave.

The case was first brought in 2016 by 35 Uber drivers. They argued that Uber exercised significant control over its drivers, including setting fares, imposing contract terms, monitoring trip acceptance rates, a punitive driver ratings system, as well as restricting communication between drivers and passengers.

The Supreme Court agreed. A key passage in today’s judgement, which was unanimously against Uber, said that Uber drivers were in:

“a position of subordination and dependency to Uber such as they have little or no ability to improve their economic position through professional or entrepreneurial skill”.
- The Supreme Court

Crucially, the judgement also found that working time is not limited to passenger time in a vehicle, but is accrued whenever an Uber driver is logged into the Uber app. This is significant because Uber’s existing transportation model relies on offloading the business risk of worker ‘downtime’ onto Uber drivers themselves. The ruling means the company will in future have to pay drivers a flat rate at or above the minimum wage, rather than the current piece rate.

I drove for Uber in 2017 while I was researching my book Hired. During the induction process at Uber’s offices in London, I was told that I could not “pick and choose” the jobs I accepted. Uber even laid down rules over what it was acceptable to talk about with passengers in the back of my cab. Politics, religion and sport were out of bounds. In other words, it felt like my passengers were Uber’s customers rather than my own.

Following today’s ruling, it is expected that thousands of Uber drivers will launch a mass action lawsuit against the company which could result in Uber having to pay out eye-watering sums of money in backdated claims for holiday pay and the minimum wage (worker status is a halfway house between self-employment and employee status, and does not entitle someone to sick pay or an unfair dismissal claim). The verdict could also have wide-ranging implications for other companies operating under the ‘gig’ economy model in which workers eschew certain rights for supposed flexibility and autonomy.

But the battle by Uber drivers to win recognition as workers may not be over just yet. Uber is still putting up resistance. Jamie Heywood, Uber’s regional manager for northern and eastern Europe, has emailed those working for the company to say that the ruling “does not apply to drivers who earn on the app today”.

However, as Lord Leggatt says in the judgement, the law will not “accord Uber power to determine for itself whether or not the legislation designed to protect workers will apply to its drivers”.

In other words, for all Uber’s reluctance to accept drivers as workers and not self-employed entrepreneurs, the company’s days operating in London under its current model are probably numbered.

Join the discussion

  • The whole gig economy is pretty bad news for workers but in some ways it’s a product of the increasing onerous burden of employing anyone of a normal contract. I left school in 1968. At that time there was little formality in getting a job. Employers could hire and fire at will in most small companies. This meant in practice that you could go for an interview and if the employer thought you fitted their requirements start work the following day. If you failed to meet their expectations you probably wouldn’t last the week. Because of the lack of commitment required on the part of the employer they would take a chance on the most unlikely candidates. Today’s employment situation is entirely different. Employer’s are hesitant to take on people because it’s far more expensive and complicated to get rid of people even if they are hopeless in the job. If employment is to be redefined much of the legislation put in place over the last twenty years will need scraping.

  • I don’t think so, not unless they can match uber for cheapness, which I don’t think they will. Especially not with the current situation. This may be a case of be careful what you wish for. But like the first commenter I don’t have a smartphone and have never used Uber, I just get the bus

  • I used Uber all over the world and it was never about cheapness for me. It was because it simply worked, you could almost always get a car with the same app on your phone, and not driven by a local mafia operative. As one Uber driver said to me, “You get better drivers, and I get better customers” .

    But I do appreciate that many young people used it because it was cheap and convenient and they felt safer with the drivers. As a result they made more journeys. Journeys that they weren’t making otherwise. Maybe they’ll simply turn to the old taxi cartels as this author supposes, but more probably many will just go back to using unreliable public transport or not making those journeys at all.

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