This afternoon (28 October 2016) an employment tribunal has handed down its decision in a Preliminary Hearing in a case brought against Uber.
Uber is a platform which enables customers to obtain passenger services using drivers, who Uber maintains are independent. Uber has been in the news over the last couple of years, with black cab drivers in London staging numerous protests about Uber’s presence and lack of regulation.
Today’s decision arises out of claims brought by drivers who claimed to be workers rather than genuinely self-employed. In a decision that could have wide ranging consequences for many businesses and individuals operating in the so called “gig” economy, the employment tribunal determined (as a preliminary issue) that the drivers were in fact workers, giving them additional rights, including to receive holidays, national minimum wage and breaks.
Uber offers a variety of products allowing customers to access passenger services. The company specifically claims not to be a taxi company or a provider of passenger services itself.
Passengers book a trip by downloading the Uber app onto their smartphone and logging on. The passenger requests a ride and the Uber app locates the nearest Uber driver using the Uber driver’s smartphone (which the driver can rent from Uber if they don’t have their own). The app sends the trip to the most appropriate driver and gives them 10 seconds to accept it. If it is not accepted, another driver is located. If the driver does accept the trip, the booking is confirmed to the passenger and the app puts the driver and passenger in direct contact with each other. The driver is not aware of the destination until the passenger is collected.
At the end of any trip, the fare is calculated and collected by Uber by means of credit card/debit card or PayPal. On a weekly basis, Uber pays the drivers the fares which they have earned minus a service fee of 25%.
Uber’s terms and conditions with both customers and drivers explicitly characterise the drivers as being self-employed and distance the company from any suggestion that they are operating a taxi or private vehicle hire company. Uber characterises itself as merely a technology platform entitling drivers to sell their own services, analogous in a way to Ebay putting together buyers and sellers of goods and taking a fee.
Aslam and others v Uber B.V. and others
The claimants in the case brought against Uber are drivers operating in London.
They argued that they were not genuinely self-employed but were workers. For these purposes, under s230(3) Employment Rights Act 1996 a worker is an individual who works under a contract, undertakes to do or perform personally work or services for another party where the individual is not doing the work through a business in their own right.
Uber argued that the drivers were individual businesses and Uber simply put them together with customers.
The employment tribunal found that the claimants were workers, giving them the right to receive minimum wage, holidays and breaks.
In a complex judgment dealing with other matters such as jurisdiction, the decision of the employment tribunal came down to the central question of how much control Uber exercised over the drivers. In particular, the tribunal found that Uber:
- has the sole discretion to accept/cancel bookings;
- interviews and recruits drivers (although it calls the process ‘onboarding’);
- controls key information like the intended destination and withholds it from the driver;
- punishes drivers who frequently refuse/cancel trips by logging them off the app;
- sets the route and punishes drivers who significantly depart from it;
- sets the fare;
- sets strict rules for quality of vehicles, instructs drivers how to drive, and otherwise controls the way the services are provided;
- has a rating system, which the tribunal likened to a performance management mechanism;
- deals with refunds, sometimes without involving the driver;
- pays a number of refunds itself, without deducting them from the driver;
- handles complaints, including complaints about drivers;
- reserves the right to unilaterally change the drivers’ terms.
These indicate a worker relationship.
Interestingly, the tribunal assessed that for the purposes of working time (both for calculating rest breaks and minimum wage), the drivers were ‘working’ whenever they were logged into the driver app in the pickup zone, not just when they were carrying passengers.
Now that preliminary issues have been dealt with, subject to any appeal the cases will continue to determine the individual claims of each driver.
The so called “gig” economy is becoming more and more prevalent in employment law. It exists where individuals are providing flexible services in an environment in which temporary positions are common and organisations contract with independent workers for short-term engagements.
This case could have wide ranging implications both for businesses and individuals operating in the “gig” economy; it will likely increase the number of individuals seeking to argue that they are workers to benefit from enhanced rights.
It should be noted that despite workers having enhanced rights in relation to pay and leave, they do not have the ability to claim unfair dismissal, any redundancy payments or implied terms such as relating to trust and confidence.
It is almost certain the Uber will appeal this case given the financial consequences of the decision. We will of course keep readers of our alert up to date with any developments.
If you have any queries in relation to employment status or any other HR queries then please do not hesitate to contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.