Last week a UK employment tribunal ruled against the American worldwide online transportation network company Uber Technologies Inc. in what could be a landmark decision, affording drivers working for the tech company the right to be classified as employees rather than self-employed contractors. Uber is now obliged to provide them with the national living wage, paid holiday and other rights reserved for employees. The result is expected to affect tens of thousands of Uber drivers as well as setting a precedent for numerous other companies that have replicated its business model such as Lyft and SideCar.
Uber, founded in 2009, has completely revolutionised the way that people use transportation and its cab-hailing services are now available in 77 countries and over 527 cities across the globe. The company declared revenue of $1.5 billion in 2015 and has been valued at a staggering $63 billion, however, despite this success the tech giant has often been at the receiving end of criticism with regards to safety, working conditions and accusations of creating an environment of unfair competition.
The action was brought to the courts by James Farrar and Yaseen Aslam, on the behalf of themselves and 19 other Uber drivers, who argued that they were pressured into working longer hours, accepting jobs and that they were penalised for refusing pickups. They presented evidence that due to these circumstances there were times when they earned as little as £5 an hour, far less than the national minimum wage of £7.20. Furthermore, these conditions meant that workers could not afford to take holidays, sick leave or even breaks and that Uber was abusing their position and the rights of their drivers. Uber has always maintained that it is not a transport company, but rather a technology platform which merely facilitates a link between drivers and passengers, as well as providing a brand, marketing and payment services. However last week’s ruling stated that “The notion that Uber in London is a mosaic of 30,000 small business, linked by a common ‘platform’ is to our mind faintly ridiculous.’
The ruling has been hailed as the first step to regulating the so-called “gig economy” whilst exposing the dark side of the UK’s labour market. It is not known yet if this will affect the way that Uber operates in any other jurisdictions and whether the company decides to appeal this ruling, remains to be seen. For now, it is expected to impact the tens of thousands of Uber drivers operating in the UK as well as having a knock-on effect on other companies offering similar type business models such as Deliveroo, Addison Lee and Hermes.