The London Central Employment Tribunal has found against the company Uber, which allows people to book and pay for a taxi via an app, in a case regarding employment status. The decision is the first high-profile case on the gig economy in the UK.

What was the main issue?
The main issue was whether those who work for Uber should be classified as “self-employed” or “workers”.

The distinction is an important one because a person’s employment status determines the individual’s rights and employer’s obligations. If someone is self-employed, they do not have any significant employment law protections. Workers, however, do enjoy certain rights such as the right to the National Minimum Wage and holiday pay.

What did Uber and the drivers argue?
Uber maintain that they are a technology company that makes it easier for independent drivers to connect with passengers and deny that they were a taxi company who employ drivers. They insist that drivers are allowed to be their own boss, are not exclusively tied to working for Uber and are free to work for others.

The case was brought by two of the firm’s drivers, with the support of the GMB union. They argued that they are, in fact, workers and should enjoy all the employment rights attached to this status.

What did the Employment Tribunal decide?
The Employment Tribunal rejected Uber’s claim that they are a technology company. They were particularly scathing of this argument, stating that Uber is a supplier of transportation business and to insist the contrary is going against simple common sense.

The Employment Tribunal reached the conclusion that the drivers work for Uber. In reaching this decision, they considered a number of factors:

  • Uber interviews and recruits the drivers.
  • Uber requires drivers to accept trips and/or not cancel trips and enforces this by logging off drivers who do not comply.
  • Uber sets default routes.
  • The fees are fixed and drivers cannot agree a higher fee with the passenger.
  • Uber subjects drivers to a rating system, which essentially amounts to a performance/disciplinary procedure.
  • Uber, in many ways, controls the drivers in the performance of their duties, instructs them how to work and imposes conditions of the vehicle they can drive.
  • Uber handles complaints by passengers.

Taking into account all the circumstances, the Employment Tribunal took the view that the drivers provide the labour which is needed for Uber to deliver its services and do so through a contractual relationship. As such, they concluded that they are workers.

How has Uber reacted?
Uber, which has more than 40,000 drivers in the UK, has confirmed that they will be appealing the decision.

What can we take away from this case?
The decision could have wide-ranging implications for businesses that have similar business models. However, we must remember that the decision is fact-specific and was decided on its own individual merits. It is also a first-instance decision, therefore it is not legally binding on other tribunals. As the matters discussed in this decision go straight to the core of the gig economy business model, it is expected that this will go to the Employment Appeal Tribunal and beyond. It is very likely that it will go all the way to the Supreme Court.

Are there more cases like this?
As well as this case, we are also waiting to see how the case against bike courier firms Excel, City Sprint, Addison Lee and eCourier unfold. Four bicycle couriers have taken legal action against their respective companies as they dispute their classification as self-employed. The first case is due to be heard in November 2016.

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