Uber awaits UK Supreme Court decision on whether drivers are workers

LONDON – Uber’s problems in the UK are not over, despite having regained its license to operate London.

The company is awaiting a major decision by the country’s highest court on whether its drivers should be classified as workers rather than independent contractors.

It is a case that echoes Uber’s struggle with Californian regulators over the labor rights of its drivers last year. A loss to the company could damage its business model and have broader ramifications for the so-called gig economy.

Here’s what you need to know.

It all started with a decision by the UK Labor Court in 2016.

The court ruled in favor of a group of Uber drivers, led by Yaseen Aslam and James Farrar, who claimed that they were workers employed by Uber and therefore had rights such as minimum wage, vacation and rest.

Uber insists its drivers are self-employed, a rating that gives them minimal protections. She does not want them to be treated as workers, as this would reduce the flexible work regime for which her service has become known and result in higher costs for the company.

The company lost all appeals against the original labor court ruling in Britain’s lower courts and therefore appealed to the Supreme Court as a last resort.

Uber says it has improved over time with regard to the treatment of its drivers, introducing benefits such as insurance to cover illness or injury and maternity and paternity payments. But lawyers representing drivers say the company’s relationship with drivers means it should pay them a minimum wage.

Uber is not the only platform that draws attention to the problem of reclassifying its drivers as workers. Free Now, a taxi application jointly owned by Daimler and BMW, said that most of its drivers use various services and “take advantage of the flexibility that comes with it.”

“This, by its very nature, would make it very challenging and not necessarily beneficial for them to change their status from hired to workers or employees,” a Free Now spokesman told CNBC.

The Supreme Court will issue its verdict on Friday, around 9:45 am, London time. The sentence will be broadcast live on the court’s website.

Friday’s decision could have huge long-term consequences for Uber and the UK economy, which has an estimated workforce of 5.5 million people.

For Uber, a loss would mean the company would have to return to the UK labor court to determine drivers’ compensation.

What will matter in the Federal Supreme Court’s decision is not just whether drivers should be classified as workers, but in what scenarios they are working. For example, is a driver working as soon as he opens the app or just after picking up passengers? That is what the judges are debating.

Pinar Ozcan, professor of entrepreneurship and innovation at Oxford University’s Saïd Business School, told CNBC last year that the case was an example of “another power struggle confrontation between platforms and their members”.

The world has changed since Uber lost its case in the labor court. The coronavirus pandemic affected hitchhikers and demand fell amid the ongoing global health crisis. Meanwhile, Uber Eats messengers and other take-out food apps are now seen by many as essential workers, delivering food to people who stay at home.

The pandemic has led to an “acceleration of concert work,” according to Ozcan, with people losing their jobs as a result of blockade measures.

“I think we will see more people questioning how we should redefine the terms of the concert work and make it attractive to (platform) members,” she said.

“Of course, the platforms are going to strike back because it really reduces their revenue,” said Ozcan. “This struggle for power will increase, at the very least, because more people will be attracted to work at shows.”

Uber last year won a battle with the state of California, which introduced new legislation in an attempt to classify application-based taxi drivers as employees. But voters supported an electoral measure called Proposal 22, which allowed companies like Uber and Lyft to continue to treat them as independent contractors.

Uber is promoting a “third way” for the employment status of gig workers, which would offer drivers some protection, but would still guarantee flexible work.

The company shared proposals for such a model with the EU on Monday, ahead of a European Commission review of gig economy platforms. One measure that Uber suggested is the idea of ​​benefit funds that could be used by workers for things like health insurance and paid time off.