New Supreme Court Ruling Determines Uber Drivers Not Self-Employed

26 Feb 2021

The UK’s Supreme Court has ruled that under current circumstances Uber drivers are classed as part of a company workforce rather than as an individual working on a self-employed basis.

This decision is likely to have hefty consequences for the revolutionary taxi app, including possible compensation bills due to the long-term battle between Uber and its drivers. Uber has previously challenged the ruling of the Supreme Court but after losing the previous three rounds they have finally accepted the decision.

The company’s share price dipped as investors struggle with the possible implications the UK ruling could have on the firm’s overall business model. Many drivers across multiple countries are now challenging Uber on whether they should be classed as workers and not considered self-employed.

This outcome means thousands of Uber drivers will likely be entitled to minimum wage as well as holiday pay.

Where did all this start?

Back in 2016, two previous Uber drivers James Farrar and the president of the App Drivers and Couriers Union, Yaseen Aslam, took the giants to an employment tribunal to contend that they were in fact employees and therefore worked for Uber and they won the case, Yaseen Aslam deemed it a huge achievement of standing up to a giant. Back then Uber claimed that all its drivers were self-employed so therefore they held no accountability for the drivers being paid a minimum wage or holiday pay.

Uber then appealed the decision, their case being that they are a booking agent who hires self-employed drivers on a contract basis. In 2017 the tribunal then maintained the viewpoint of the original decision. After that Uber then brought it to the Court of Appeal where once again the original ruling was upheld. The case was then taken to the UK Supreme Court for a final hearing and Ubers final chance to appeal. They once again lost and now have to accept the fate that thousands of drivers are in fact their employees. The ruling made on Friday was the last opportunity for Uber to make appeal, with Supreme Court decisions always being final.

Several factors were considered for the ruling which consisted of: Uber having the ability to meter the rates of fares, putting them firmly in control of what a driver can earn. The terms drivers adhere to are set by Uber and the drivers have no way to appeal or seek to change them. Uber are able to constrict available rides if a driver rejects a large number of rides.

The app has a star rating system which means that Uber can withdraw and end the contract of any driver who does not meet their standards. Due to these practices, the Supreme Court ruled that the drivers have no options to increase their earning except to drive for longer hours, therefore, Uber are in a position of power as their drivers depend heavily on their business model and restrictions to earn a wage.

When passing judgement, it was stated that when drivers are signed into the Uber app they should be considered as working, not only just when they have a passenger.

 

What Happens Now?

A pivotal point of the ruling was that the court deemed any Uber driver to be working from when they log on to the app not just while they have a passenger. In the current climate, drivers have seen a huge dip in the number of rides being requested meaning they are currently earning very little – sometimes no more than £30 for a day’s work. Under the new ruling, Uber will need to pay the drivers a wage for the entire time they are making use of the app. It’s currently unclear how the new rules will affect the current fares Uber charge, but they have stated that such a ruling would result in significant additional expenses and a change to their overall business model.