Supreme Court finds that Uber drivers are workers, not self-employed

The judgment focused on 5 factors that were relevant in determining the drivers as workers:

• 1. Where a ride is booked through the app, it is Uber that sets the fare. It is therefore Uber that dictates how much drivers are paid for work performed.
  2. Contract terms are imposed by Uber and drivers have no say in them.
  3. Once a driver has logged on to the app, their freedom to accept or reject rides is constrained by Uber, who monitor rates of acceptance of trip requests. Any drivers who fall below a threshold rate of acceptance can be constrained from accepting further rides by Uber, i.e. by automatically logging the driver off for 10 minutes.
  4. Uber exercises significant control over the way drivers deliver services to riders. A rating system is used by passengers, with drivers rated between 1 and 5 stars. Any driver that fails to maintain an average rating will receive warnings from Uber and may have their relationship terminated.
  5. Interactions between passenger and driver are restricted to the minimum needed to undertake the journey.

Taken together, the Supreme Court considered that these factors demonstrate that the transportation services provided by drivers are very tightly defined and controlled by Uber. Drivers are “in a position of subordination and dependency in relation to Uber” and cannot improve their economic position through their own entrepreneurial skill. Rather, the only way in which they can increase earnings is by working longer hours whilst being subject to factors listed above and meeting Uber’s performance standards.

The Supreme Court also upheld the Employment Tribunal’s decision that working time (for the purposes of the Working Time Regulations 1998 and the National Minimum Wage Act 1998) included time during which drivers were logged in to the Uber app within the licensed territory and were ready and willing to accept work. It was not limited (as argued by Uber) solely to periods spent actually driving passengers to their destinations.

The decision places thousands of holiday pay and minimum wage claims firmly in Uber’s rear view mirror and could lead to wider ramifications for the gig economy. Moreover, it comes at a time when businesses are already preparing for changes to off-payroll working rules (IR35) in April 2021 which may affect the tax status (aside from the employment status) of individuals and intermediaries providing services to companies.

If you have any questions about employment status within your workforce or the impact of changes to IR35, please get in touch with your usual Memery Crystal contact or the authors below.