Uber’s Employment Case – An Update

MEDIA ROOM

An employment tribunal in London is likely to hand down what could be a notorious judgement in a case which could have wide implications on the gig economy.

What is a gig economy?

A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.

The case

Self-employed Uber drivers are claiming that Uber is acting unlawfully by not paying holiday or sick pay. The legitimacy of this claim is based on the premise that the drivers’ actions are controlled by Uber. Indicative examples which can justify this are the following: Uber assigns journeys to drivers; prior to the assignment of a journey, the driver is not aware of the destination; and the company is capable of enforcing punitive measures against drivers in the event of poor performance of the driver. On the basis of the element of control Uber retains of the drivers, the drivers are claiming that in effect they are employed by the company.

Uber and it’s modus operandi

Uber is an American worldwide online transportation network company headquartered in San Francisco, California. The Company bases its operation on the Uber mobile “app”, which allows consumers with smartphones to submit a trip request. The software program then automatically sends to the Uber driver nearest to the consumer, alerting the driver to the location of the customer. Uber drivers use their own personal cars along the course of the engagement. Uber contracts with their driver partners under legal arrangements as contractors, and not employees. This designation is proving to be controversial. Uber has more than 40,000 licensed drivers in the UK with circa 30,000 of these being in London.

Why is this case noteworthy?

The trend towards a gig economy gives this case an added importance and value. On this note, the outcome may change the relationship between many companies and their self-employed workers. In effect it has a huge implication for employment law as an area of practice in itself. In the event that the outcome of this case favours the claims being made by the drivers, one is to point out that the outcome is capable of extending employment rights to many more people and impact on how the growing gig economy function. In the event that the Uber loses, the trend of companies taking on self-employed workers who engage with work through apps may have to change radically. These companies would either have to change their business models, face similar employment tribunal claims, or pass the increased costs onto customers. But if the case goes against the Uber drivers, then it will be validating the type of flexible working.