“The End of the Road for Uber”

The Supreme Court has handed down its long-awaited and arguably unsurprising decision, finding that Uber drivers are classed as ‘workers’ not self-employed contractors for the purpose of the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998.

Most of us will be familiar with ‘Uber’ either having used the app ourselves or having seen the name on taxis in cities all over the Country. For those not familiar with the company, Uber essentially provides taxi drivers with access to their app which enables drivers and potential passengers to connect. In cities where Uber is available, a prospective passenger can use the app to request a ride to their chosen destination.

In 2016, two former Uber drivers took Uber to an Employment Tribunal, claiming that they were ‘workers’ and thus entitled to minimum wage and holiday pay.

Those following the case will be aware that Uber have always sought to maintain that the company and their app acted as an ‘intermediary’ and that the drivers using their app are ‘self-employed contractors’ and not ‘workers’.

Uber were unsuccessful in defending this stance in the Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal, with all three finding that the drivers were in fact workers. Uber then appealed to the Supreme Court.

The Supreme Court’s ruling marks the end of a six year challenge for Uber. Delivering his judgement, Lord Leggatt confirmed that the Supreme Court unanimously dismissed Uber’s appeal that it merely acted an in intermediary party and determined that drivers should be considered to be workers, not only when transporting a passenger, but in fact whenever they were logged into the Uber app.

In reaching their decision, the Supreme Court made the following findings:

  • Uber dictated the fare and drivers could not charge more than the fare calculated by the app. Accordingly, Uber determined how much the driver was paid for that journey;
  • Drivers had no control over the contract terms imposed by Uber;
  • Once the driver was logged into the Uber App, their choice whether to accept a potential passenger was constrained by Uber. Uber monitored their driver’s rate of acceptance and cancellation of prospective passenger requests;
  • Passengers were asked to rate drivers on a scale of one to five following a journey. If the driver did not maintain Uber’s standards of service, the driver would receive a warning and if there was no improvement in the ratings, their relationship with Uber would be terminated;
  • Uber limited communication between the passenger and the driver.

Taking into account these findings, the Supreme Court determined drivers were in a position of subordination to Uber and that the only way they could increase their earnings would be to work longer hours.

The impact of the judgement is that Uber drivers are entitled to claim:

  • Minimum wage (including backpay for minimum wage), with their minimum wage claims being based upon their entire working day, not just when they had a passenger;
  • 6 weeks’ paid annual leave each year;
  • Whistleblowing and similar rights.

The question of an individual’s employment status is an area open to challenge and debate and we have seen an increase in the number of cases being brought to the Employment Tribunal and making newspaper headlines. The distinction is crucial and the implications of getting it wrong are significant. We would urge any Employer with a flexible workforce to seek advice at the earliest possible opportunity in relation to any questions over an individuals’ status.

The articles are only accurate at the time of drafting, their content is merely informative and should not be relied upon as a substitute for legal advice.