Why the ‘gig economy’ may never be the same again after Uber tribunal case
You’ve probably heard the one about the taxi driver telling his fare how he loves his job: “I’m my own boss and nobody can tell me what to do,” to which the customer responds: “Take a left.”
Just last week, however, an English employment tribunal made it clear that, in respect of Uber at least, it might not just be the customer calling the shots.
Essentially, due to the control apparently exercised over its drivers, Uber may have to grant basic employment rights such as the National Minimum Wage and holiday pay after it lost a preliminary hearing in a London tribunal, which found that Uber drivers are in fact “workers”.
The car-hailing app has vowed to appeal the decision, which it says threatens to destabilise its unique and increasingly successful business model.
Uber, which runs as a platform for thousands of drivers across the UK (and has in recent months seen a surge in popularity in Belfast), insists that it is a company which simply connects independent drivers with passengers in a move that takes us away from the traditional taxi model.
In an email to customers, Uber said a recent poll of 1,000 drivers found that “the overwhelming majority prefer being self-employed and joined Uber precisely because they want to be their own boss”.
However, the tribunal decision is being viewed as a success by those advocating employment rights and protections for all in the workforce, particularly those operating in the new ‘gig economy’ in which large companies rely on an increasing number of self-employed contractors on short-term engagements to deliver core services.
The gig economy in the UK has grown by around14% in the past few months alone. For example,Delivery firm Hermes recently made headlines when it emergedwith news it had engaged over 10,000 people paidon a piece-work basis to deliver parcels using their own cars, fuel and undertheir own car insurance. What though,does the Uber decision mean for these businesses?
Although the decision only affects the two drivers at the centre of the case, it shows the real possibility that “self-employed contractors” in the new gig economy may well qualify as “workers” within the meaning of the relevant legislation. It is probable that this decision will be appealedupward, possibly all the way to the Supreme Court. As such, the advice for businesses potentially affected at this moment in time is simply a word of warning: although this decision is fact-specific, where there is sufficient control over supposed self-employed contractors, there is now an increased chance that claims will flow from those seeking worker status.
*John Kelly is a solicitor in Worthingtons experienced in employment law. He can provide urgent advice and can be reached on 028 9043 4015.