UK Supreme Court rules that Uber should treat drivers as workers

The UK's Supreme Court has today upheld a judgment (.PDF) that says Uber drivers in the UK are entitled to the legal rights and protections afforded to workers. It is the latest in a series of cases where judges have found that, despite Uber’s claims to the contrary, its drivers are not self-employed entrepreneurs. In his judgment, Lord Leggatt said that workers were logging in to the Uber app had entered into a contract with the company to “perform driving services for Uber London,” rather than the riders themselves.

Leggatt added that, essentially, since Uber sets the fare, imposes the contract terms and exerts significant control over the service, it was acting as an employer. The court found that while drivers could choose when they worked, the rest of the process was within Uber’s control. That included, crucially, setting the price, and the ratings system that, should ride quality fall below a certain level, Uber could sanction drivers. The court was also satisfied that, since Uber withholds the details of the ride’s destination, drivers had less control than other taxi operators.

In British law, there are specific rules to determine working time, in order to ensure that employees have the right of breaks and rest periods. Uber contended that its drivers are, broadly speaking, only working when they are driving a passenger, which the court disagreed with. It found that the way Uber communicates to its drivers suggests that, as soon as the app is activated, they need to be ready to accept a ride. And so whenever the app was active, they were deemed to be working. This also meant that individuals were less able to accept rides from alternative taxi hire or ride-sharing companies.

WOW - first reaction is that this is a huge deal. Can't wait to read the judgment in depth, but for now: UKSC joins a growing number of Supreme Courts across Europe (incl France, Spain) in looking through the myths of entrepreneurship and innovation

— Jeremias Adams-Prassl (@JeremiasPrassl) February 19, 2021

The case will now be returned to the Employment Tribunal, which will determine how much compensation drivers are owed. Uber, however, is not likely to take such a threat to its business model laying down, as it didn’t when a similar judgment was made in California. In response, it dragged its feet on reclassifying its drivers as employees, buying enough time to push through the controversial Proposition 22. The law, which cost $220 million in advertising to push through, undid the court ruling and AB5, an earlier California law offering better rights and protections to drivers.

Uber UK has published a blog post saying that the court ruled "a small group of drivers using the Uber app in 2016 should be classified as workers." It contends that the judgment does not apply to "other drivers on the app," including those who "earn on Uber Eats." The post goes on to talk about the changes it has made to its business model since 2016, and how its current drivers have never had it so good. The post ends by adding that Uber will soon launch a "nationwide consultation" which seeks the views of its active drivers to identify "where things could improve."