Uber drivers: workers or self employed?

15 Nov 2017 | Comment


The Employment Appeal Tribunal (EAT) has agreed that Uber drivers are considered to be workers when they have the Uber app switched on. This is due to the level of control exerted by the company over its drivers. This has significant implications for people working on flexible, short-term engagements within the ‘gig economy’, which has recently seen many similar claims in relation to establishing worker status for these individuals.

The Uber drivers case has been one of the most high profile of recent cases dealing with employment status. Customers of the cab-hailing company are able to use a smartphone app to order a taxi, which locates an available driver who is logged into the app. Drivers are given 10 seconds to accept a booking through the app, failing which, warning messages can be sent to them. Failing to follow this process could result in the driver being suspended or blocked from accessing the app and carrying out further work. Uber’s servers calculate the taxi fare at the end of the journey and it is not open to the driver to agree a higher fare.

Uber claimed that its drivers were self-employed, and that written agreements characterised the relationship between the drivers and Uber, setting out that Uber London Ltd specifically provided its services to the drivers as their agent.

In the judgment handed down by the EAT on 10 November 2017, it was held that Uber drivers are considered to be workers for the purposes of the Employment Rights Act 1996, Working Time Regulations 1998 and National Minimum Wage Act 1998, in the following circumstances:

  • the drivers had the app switched on;
  • they were within the territory in which they were authorised to work; and
  • they were able and willing to accept assignments.

This finding upheld the Employment Tribunal’s decision in 2016.

The EAT found that the written contractual documents in place were inconsistent with the reality of the situation. The drivers were essentially incorporated into the Uber business of providing transportation services, and were subject to the company’s control. The obligations placed by Uber onto the drivers were found to indicate a worker relationship, and include requirements such as accepting a minimum of 80% of trip requests, as well as facing penalties should they fail to accept requests or cancel a trip.

It was therefore held that Uber was not acting as an agent between its drivers and the passengers.

Uber was unable to rely on the argument that the arrangements which pointed towards drivers having a worker status were simply required by the regulatory framework. Uber operated an interview process in recruiting its drivers, which the framework did not require.

It was also acknowledged that although there could be ‘gaps’ (when drivers were not signed into the app), this was not considered fatal to their status as workers.

This judgment is significant given the importance of an individual’s employment status, particularly in terms of the rights to which they are entitled. Self-employed individuals, as Uber claimed that its drives are, do not have any employment rights. Having fewer rights than employees, Uber drivers (as workers), will be entitled to important rights which include:

  • receiving the national minimum wage and the national living wage;
  • protection from unlawful deductions from wages;
  • paid annual leave;
  • a working week limited to a maximum of 48 hours, as well as rest breaks; and
  • protection for making a disclosure under the whistleblowing legislation.

Uber’s appeal against Transport for London

Uber has also lodged an appeal against Transport for London’s decision not to renew its five-year private hire licence to operate in London. Whether it really is the end for Uber in London remains to be seen. Although Uber’s licence expired on 30 September, its taxis will continue to remain available and in operation until a decision has been reached by the courts.

Following the EAT’s decision regarding worker status of the company’s drivers, whose numbers stand at more than 40,000, no doubt Uber’s continued temporary operation comes as welcome news to them.

Looking forward

A number of similar cases are working their way through the courts at the moment, and it will be interesting to see if case law relating to employment status in the gig economy continues to follow in this direction. The impact on companies operating with this business framework – and those who engage self-employed contractors – are likely to be significant, particularly as the focus on innovation grows.

The social policy implications of the gig economy remains divided; some commentators consider that it is ideal in creating opportunities for individuals seeking flexibility and informality, whilst others consider the gig economy as placing vulnerable workers at risk of being subjected to abusive employment practices.

Uber can appeal the EAT’s decision, and the company may in fact seek to apply for the case to be heard in the Supreme Court alongside the case of Pimlico Plumbers Ltd & Another v Smith, which is due to be heard next year and which also deals with employment status and the gig economy.

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