The Supreme Court asked to decide whether Uber drivers are workers.
In 2018 the Court of Appeal declared that Uber drivers are to be classified as ‘workers’ under the Employment Rights Act 1996, reaffirming previous rulings from employment tribunals. This definition was incredibly important as it meant their drivers, after being previously considered as freelance, would now be afforded the same rights and statutory protections that all ‘workers’ enjoy, most importantly the national minimum wage, holiday and sick pay.
Now, however, Uber is again insisting that these rulings were incorrect, and the Supreme Court will decide on the matter once and for all in the case of Uber BV and others v Aslam and others. The argument may initially seem shocking - that Uber drivers (of which there are 45,000 in London alone) should not be given the same rights as other workers - but Uber is determined. They argue that Uber drivers are self-employed, and Uber is not their boss, but merely a “matchmaker” whose technology. helpfully connects drivers and passengers.
The Supreme Court will examine the following issues:
The argument may initially seem shocking - that Uber drivers (of which there are 45,000 in London alone) should not be given the same rights as other workers - but Uber is determined.
Whether the Respondents were "workers" providing personal services; and
If the Respondents were "workers", what periods constituted their "working time".
The case in favour of Uber drivers is arguably driven by policy concerns (that is, deliberate legal intent to pursue decisions that favour the general public). There is a moral argument that Uber drivers are essentially the same as any other form of worker, such as taxi drivers who are employed directly and have rights such as paid leave and the national minimum wage. Uber drivers have an unpredictable working life as a shortage of bookings on a quieter day will mean that their wages are significantly reduced meaning they are often paid below the minimum wage. Being paid less, as Uber drivers often are, has the consequence of forcing drivers to work long hours, increasing fatigue and making roads less safe. In addition, the need to get as many customers as possible also pushes drivers to try to deliver customers to their destination at breakneck speed, furthering road safety concerns.
Uber, however, hopes that policy considerations will swing in their favour. Their previous regional general manager, Jo Bertram, argues that not being classified as a worker is what attracts people to Uber: “Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss”. They will also emphasise the arguments that Lord Justice Underhill used in his dissenting argument for the 2018 case, whereby he stated it was “perfectly explicit in the Agreement that drivers provide their services to the passengers as principals, with Uber’s role being that of an intermediary”. The contract, it is argued, makes clear that Uber drivers are independent contractors rather than workers.
However, there is more to this reasoning than is at face value. The argument that Uber is simply an ‘intermediary’ between the driver and customer is a cynical and unethical attempt at reducing costs for a company that has never managed to make a profit. In essence, Uber is classifying its workers as self-employed whilst taking away all the characteristics of self-employment. It sets centralised fares calculated by an algorithm that all drivers have to comply with - just one example of how drivers lack the basic freedoms that we would expect from supposedly ‘self-employed’ workers. Furthermore, as Sir Terence Etherton and Lord Justice Bean argued in the 2018 Court of Appeal case, Uber drivers have an active duty to accept customers when the app is turned on, which clearly amounts to ‘work’, even if they can set their own hours. The courts have consistently agreed with the employment tribunal that originally heard the case that while the app is on and the driver is responding to customers, they fit the definition of a “worker”.
The Supreme Court could follow their own precedent from the case of Autoclenz Ltd v Belcher (2011). This landmark judgment decided that you are an employee if you fulfil the requirements of “mutuality of obligation”, which was held to amount to the exchange of work for a wage. It allowed the claimants, a group of car valets comparable to Uber drivers, to claim entitlement to minimum wage. Their contracts that claimed they were self-employed were rightly disregarded due to their failure to reflect the reality of the employees’ situation: “the true agreement will often have to be gleaned from all the circumstances of the case” (Lord Clarke).
Even when Uber drivers make above the minimum wage, this is largely reduced by expenses such as fuel, maintenance, insurance and any other cost related to their vehicle.
In the face of significant research alleging that a number of Uber drivers earn below the minimum wage, Uber will be stretching themselves when arguing that the current system is beneficial to its drivers. The Center for Automotive Research at Stanford University found that 54% of Uber drivers in the US earn less than they would if paid the hourly minimum wage of their state. Even when Uber drivers make above the minimum wage, this is largely reduced by expenses such as fuel, maintenance, insurance and any other cost related to their vehicle. If the Supreme Court upholds that they are workers, Uber will be obliged to cover many of these costs. With this in mind, it becomes increasingly clear why Uber is so determined to overturn any ruling that classifies its drivers as workers. As it means,financially, Uber drivers would benefit from the Supreme Court ruling that they are workers with the ability to claim compensation for fuel and depreciation costs of their vehicles. The thirty-five drivers bringing the case to the Supreme Court could receive reimbursement from Uber, and lawyers have indicated that the thousands of drivers in the UK could bring a group claim against the company.
However, passengers will likely be paying higher fees which may discourage them from using the service. This creates a risk that if Uber does have to pay their driver minimum wage, it will reduce their net income. In New York, for example, the minimum wage requirement was implemented and rides fell 8% due to depressed demand in response to the higher fares. Uber had lost their cost advantage over taxi services: there is a concern that enforcing a minimum wage for Uber drivers will make Uber so uneconomical in particular areas that drivers will lose their jobs, and will be placed in an even more desperate situation.
Yet on a broader scale, the Supreme Court upholding the previous rulings would set an important precedent for the gig economy, which employs over 4.7 million UK workers. As a legal grey area, the gig economy has proven to be ripe for cynical companies, desperate to achieve profitability and exploit legal loopholes that allow for harsh treatment of workers such as denying them basic sick pay or the national minimum wage.
Cost advantages often come at the price of poorly treated workers, and this is very much the case with Uber. Uber BV and others v Aslam and others will have very significant implications for Uber and all businesses which adopt similar models. The Supreme Court potentially closing Uber's loophole will mean that the company can find a way to achieve the necessary just treatment of workers alongside profitability.