The Employment Tribunal says that Uber Drivers are Workers - where now for the gig economy?

Background

Uber engage some 30,000 Uber drivers providing their services in the London area alone, with a further 10,000 driving Uber cars elsewhere across the UK. In Aslam, Farrar and others v Uber, two Uber drivers argued that they met the definition of workers under the Employment Rights Act 1996.

Uber gave evidence to say they contracted with their drivers on the basis that they were self-employed partners, rather than workers. Uber argued that it is a tech company that puts drivers in touch with customers - rather than a transportation service. In support of this interpretation, Uber argued that its driving partners are free to choose when they switch on the app and therefore when they work. The drivers also own and maintain the vehicles that they use.

The Decision

The Employment Tribunal (ET) Judge found in the drivers favour, finding that the drivers were not self-employed partners of Uber, but rather workers under the Employment Rights Act 1996.

The ET judge said that 'It is… unreal to deny that Uber is in business as a supplier of transportation services…the notion that Uber in London is a mosaic of 30,000 small business linked by a common 'platform' is to our minds faintly ridiculous'. The judge also indicated that it was relevant that Uber:

• interview and recruit the drivers
• control key information regarding the passenger (such as their name, destination and the fare they will be charged)
• log drivers out of the app platform if they do not accept fares
• set the drivers' routes
• do not allow drivers to agree a higher fare with a customer
• impose various conditions on drivers regarding their vehicle
• operate a driver rating system
• administer a customer refund process that does not involve the driver
• handle passenger complaints
• reserve the power to amend the drivers' terms without consultation

Impact of the Decision

Workers are entitled to a minimum level of rights that include:

• 5.6 weeks' paid annual leave each year
• statutory rest breaks and a maximum 48 hour working week
• the national minimum wage (if the driver is aged 25 or over, the national living wage)
• the protection of the whistleblowing legislation

Interestingly, the ET judge found that Uber's drivers were workers as soon as they were within the territory in which they were authorised to work, logged into the app and available to pick up customers - not from the moment that the customer starts a trip.

Of course, the ET did not find that the drivers were Uber's employees. Employees have additional rights above the level of workers - such as a right against being unfairly dismissed. Nevertheless, the rights that the drivers can now avail themselves are extensive and are likely to impact significantly across Uber's business. It appears certain that Uber will appeal the decision.

Best Practice

Many businesses across various sectors seek to engage individuals through an independent contractor/self-employed model. Online businesses, like Uber, may even seek to argue that they do nothing more than provide a platform bringing together independent contractor and customer. It seems likely that other businesses who engage staff in this way will be challenged as a result of the decision in this case.

Businesses who rely on the gig economy to meet customer demand should therefore review their position carefully. Interestingly, the ET judge noted that 'none of our reasoning should be taken as doubting that [Uber] could have devised a business model not involving them employing drivers. We find that that the model which they chose fails to achieve that aim'. This suggest that there may be arguments available to other businesses who operate a similar - but not identical - business model to Uber that may find more favour in the ET if they were called into question.

For more information please contact Mark Stevens in our Employment Law team on 0117 314 5401.