We have all experienced a taxi not turning up but on this occasion Uber, the US taxi app giant has been left high and dry by UK employment law in a new landmark decision.
What is Uber?
- Rather than hailing a cab, passengers request a journey through the Uber app which notifies an available driver within the vicinity.
- The driver in accepting a fare is not aware of the passenger’s exact location or who he is picking up until he or she reaches the destination as determined by GPS.
- Fares are determined by the GPS route. Drivers are then paid these fares weekly by Uber minus a service fee of around 20-25%.
- Uber drivers do not have to make a commitment to work, however if a driver fails to accept bookings, he is at risk of having his app access removed.
- The only indication Uber gets of a driver clocking in for work is when he signs into the mobile app.
The Uber case
A number of drivers claimed they were being paid less than the National Minimum Wage and that they were not entitled to paid annual leave. To be entitled to these statutory provisions the drivers argued they were “workers”. Uber on the other hand contended that the drivers were self-employed and that the app was merely providing a platform for commuters to flag down their taxis through cyberspace.
The Employment Tribunal had to determine whether or not there was a contract between Uber and its drivers and considered the following;
- Was there a personal service.
- Was there a professional or business relationship between Uber and its drivers rather than:
- a relationship between the drivers and passengers; or
- a relationship where Uber is actually the customer of the drivers.
- Was there mutuality of obligation between the drivers and Uber.
The Employment Tribunal also looked at the reality of the situation and found Uber to have used ‘fictions’ and ‘twisted language’ to misrepresent its contractual relationship with its drivers.
The Employment Tribunal found in favour of the drivers stating they were ‘workers’ as long as they were signed into the app and ready and willing to pick up passengers in an area in which they were authorised to work. It did not agree that the business was the customer of the driver or that each driver was a small business on their own account and it identified that there was no bargaining power between the driver and passenger and no connection until they actually meet. Furthermore, the Employment Tribunal found time spent signed into the app was ‘working time’, under the Working Time Regulations along with time actually spent completing jobs for the purpose of the National Minimum Wage.
What can we conclude from this case?
With technology constantly growing and evolving, more and more companies are using apps and formats such as Uber to generate business. These companies will need to clearly establish the contractual relationship it has with individuals selling their skills and services as they may be deemed as “workers” and therefore entitled to certain employment rights and protections such as national minimum wage and working time holiday and rest periods.
Uber has confirmed that it intends to appeal. Clearly this is not a dispute that has reached the end of the road just yet …
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