Uber has famously maintained a bright and shiny line between its drivers and its full-time employees. There is a laundry list of reasons for why it does so, from tax purposes to liability. The company used this distinction often, maintaining that as a technology company they are not the same as a taxi service, and not subject to the same regulations and liabilities as a result. According to the blog TorkLaw: "They’re not responsible for maintaining vehicles. Their drivers are not Uber employees, but “independent contractors.” As such, they don’t need to offer them benefits, paid time off, or any of the standard protections an employee would receive. In terms of the law, they are also less responsible for the actions of an independent contractor than for those of an employee. This is why Uber has frequently been able to get away with denying liability for their drivers’ actions."
This may be about to change in Britain. The UK Supreme Court has ruled unanimously that Uber drivers in Britain should be classed as “workers” and not self-employed. The ruling paves the way for Uber drivers to get benefits such as paid holidays and the minimum wage, handing defeat to the ride-hailing giant in the culmination of a long-running legal battle.
Judge George Leggatt said Uber drivers working time isn’t limited to time spent driving passengers, but also “includes any period when a driver is logged into the app and ready and willing to accept trips.”
The case was brought by former Uber drivers Yaseen Aslam and James Farrar, who argued that the platform effectively controls how they work. In 2016, an employment tribunal in London found that they qualified for workers' rights - a decision Uber appealed all the way to the Supreme Court. Aslam, president of the App Drivers & Couriers Union (ADCU), said in a statement he was "overjoyed and greatly relieved" by the decision.
Every gig employer in the world will be following this news, as it creates a path for everyone from food delivery workers to IKEA assemblers to advocate for full-time status. If the ripples from this ruling spread - and that is likely in the EU, where Uber has been under scrutiny for some time in this matter - they may encompass other gig employers.
If Uber is considered as an employer and the driver as an employee, then the Company will be responsible for certain matters. For instance, depending on the jurisdiction, withholding taxes on the amounts paid to the driver, social security and unemployment insurance obligations as well as other compliance related obligations. [Kluwer Tax Blog]
The company released a statement in response to the ruling: "We have made some significant changes to our business, guided by drivers every step of the way,” Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, said. “These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.”
An employment tribunal will now decide how much to award the group of 25 drivers involved in the case in compensation. Some 1,000 similar claims against the platform that were pending until after Friday's ruling may now go ahead. The employment tribunal will make decisions on compensation for drivers over lost pay. Drivers could be entitled to an average of 12,000 pounds ($16,800), estimated law firm Leigh Day, which is representing drivers.
The company's Driver business has been hit hard by the pandemic, with the company eliminating 6,000 jobs in 2020 and dramatically slowing down its Driver recruitment efforts. Uber Eats has surged, however, allowing the company to maintain revenue to an extent as it rides out the storm.
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