The UK’s gig economy landscape has been deal a major change this week after a ruling by the Supreme Court in London.
The court ruled that ride-hailing firm Uber now has to classify its drivers as workers, rather than self-employed people.
This ruling means means tens of thousands of Uber drivers in the UK are now set to be entitled to minimum wage and even holiday pay.
It clear that this ruling will have wider consequences for the gig economy in the United Kingdom.
The BBC reported that this is the culmination of a long running legal saga in the UK, and comes after Uber had appealed to the Supreme Court after losing three earlier rounds.
The case began when former Uber drivers James Farrar and Yaseen Aslam, originally won an employment tribunal against the ride hailing app giant in October 2016.
Both men told the BBC they were “thrilled and relieved” by the ruling.
“I think it’s a massive achievement in a way that we were able to stand up against a giant,” said Aslam, president of the App Drivers & Couriers Union (ADCU).
“We didn’t give up and we were consistent – no matter what we went through emotionally or physically or financially, we stood our ground,” said Aslam.
Uber reportedly appealed against the employment tribunal decision but the Employment Appeal Tribunal upheld the ruling in November 2017.
The ride hailing taxi app firm then took the case to the High Court, which upheld the ruling again in December 2018.
The ruling on Friday was Uber’s last appeal, as the Supreme Court is Britain’s highest court.
In reaching its decision, the court considered a number of issues with Uber, including the fact that Uber set the fare which meant that they dictated how much drivers could earn; Uber set the contract terms and drivers had no say in them; request for rides is constrained by Uber who can penalise drivers if they reject too many rides; and finally that Uber monitors a driver’s service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve.
Looking at these and other factors, the BBC reported that the court determined that drivers were in position of subordination to Uber where the only way they could increase their earnings would be to work longer hours.
And apparently a key point in the Supreme Court’s ruling is that Uber has to consider its drivers “workers” from the time they log on to the app, until they log off.
The implications of this ruling is expected to have a significant impact not only for the gig economy and Uber, also other firms who rely heavily on self-employed staff.
In the United States, an Appeals court in California unanimously ruled in October 2020 against Uber Technologies and Lyft
It backed the San Francisco Superior Court that in August 2020 had ruled that drivers for Uber and Lyft were employees, and not freelancers or contractors.
As a backgrounder, “the Gig Worker Bill,” California Assembly Bill 5 (AB5) went into effect on 1 January, 2020.
That bill required companies that hire independent contractors and freelancers to reclassify them as employees if their jobs and duties meet certain conditions.
But Uber and others funded a ballot initiative, Proposition 22, to exempt both ridesharing and delivery companies from the AB 5 requirements, while also giving drivers some new protections, including minimum wage and per-mile expense reimbursement.
Proposition 22 passed in November 2020 with 59 percent of the vote.
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