British Uber drivers are employees entitled to national minimum wage and holiday pay, an employment tribunal ruled on Friday.
It’s a ruling that will have huge implications for the company’s 40,000 UK drivers, and will likely have significant knock-on effects across the broader “gig economy.”
In a statement, Uber said it plans to appeal the ruling.
The Californian transport company has always maintained that drivers who use its platform are independent contractors. It frames itself as a technology platform, connecting riders and drivers and taking a fee in the process.
But its critics argue that it is actually more akin to a traditional taxi company, that its drivers are effectively employees, and that it has legal responsibilities towards them.
The case was brought against Uber by the GMB union on behalf of two Uber drivers, and it argued that Uber was breaking UK employment law by failing to provide benefits.
There will be a further ruling that will determine the holiday and pay that drivers should be entitled to.
Here’s the key section of the Uber judgement on control ie on who is really in charge – the driver or Uber – the tribunal said Uber pic.twitter.com/qG2DCKCG11
— Torsten Bell (@TorstenBell) October 28, 2016
The case will likely have broader implications for the “gig economy” — a fast-growing industry of on-demand services like transportation, food, and cleaning, often accessible via mobile apps. Its advocates argue it provides convenience for users and flexibility to workers, but detractors argue that it strips away employment rights for workers, who are often independent contractors.
The Social Market Foundation estimates that nearly 60% of self-employed people working in transport and storage industries earn less than the minimum wage.
Ahead of Uber/GMB ruling due out soon, we estimate that almost 60% of self-employed in transport+storage earn less than National Living Wage pic.twitter.com/EDVcrTdCJ0
— Nida Broughton (@FiveMinuteEcon) October 18, 2016
Maria Ludkin, legal director of GMB, hailed the ruling. “This is a monumental victory that will have a hugely positive impact on over 30,000 drivers in London and across England and Wales and for thousands more in other industries where bogus self-employment is rife,” she said in a statement.
“GMB puts employers on notice that we are reviewing similar contracts masquerading as bogus self-employment, particularly prevalent in the so called ‘gig economy’. This is old fashioned exploitation under new-fangled jargon, but the law will force you to pay GMB members what they are rightfully due.”
Nigel Mackay, from law firm Leigh Day (which represented the drivers in the case) said in a statement: “This judgment acknowledges the central contribution that Uber’s drivers have made to Uber’s success by confirming that its drivers are not self-employed but that they work for Uber as part of the company’s business.
“Uber drivers often work very long hours just to earn enough to cover their basic living costs. It is the work carried out by these drivers that has allowed Uber to become the multi-billion-dollar global corporation it is.”
In a statement, Uber UK general manager Jo Bertram said the company plans to appeal the ruling: “Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss. The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people we will be appealing it.”