In victory for workers’ rights, London panel rules that Uber drivers aren’t self-employed

A court battle threatens to undermine the company's business model even further.

The latest employment tribunal hearing is part of a series of setbacks Uber has suffered in London (CREDIT: studioEAST/Getty Images)
The latest employment tribunal hearing is part of a series of setbacks Uber has suffered in London (CREDIT: studioEAST/Getty Images)

A British employment tribunal has delivered a major blow to Uber, ruling that its drivers needed to be classified as workers and receive a minimum wage, sick leave and paid time off.

The appeal decision on Friday followed a ruling initially issued last year. The case was bought before the employment tribunal by former Uber drivers James Farrar and Yaseen Aslam, who claimed that Uber’s model of saturating a market to provide lower costs and faster services on its app had a direct effect on the well-being of its drivers.

“The only way [the drivers] can respond to that [saturation] and to cover their costs is to work longer and longer hours,” Farrar told the Guardian last year. “If you want to make a reasonable return for your working week you just simply have to work 80, 90,100 hours a week. And that’s just inhumane and unsafe.”

“You can hide behind technology, but the laws are there and need to be obeyed and respected,” Aslam told the New York Times after Friday’s decision. “The impact of this ruling could affect thousands of drivers, and not just drivers but millions of workers across the U.K.”

Uber has argued that since its drivers are “self-employed,” they do not need to provide the basic benefits and safeguards that come with a formal employment contract. Tom Elvidge, Uber’s acting chief of British operations, said Uber would again appeal the decision, potentially bringing the case to either the Court of Appeal or the British Supreme Court, according to the Times.

The company has faced a fraught few months in London, its biggest market outside the United States, with over 40,000 minicab drivers and 3.5 million passengers. In September, Transport for London (TfL) ruled that it would not renew the company’s private hire licence, saying that it was not “fit and proper” to own one. “TfL considers that Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications,” TfL said in a statement. In August, London’s Metropolitan Police accused Uber of failing to report sex attacks made by drivers.

Uber is currently fighting TfL’s decision, but its CEO Dara Khosrowshahi has admitted that the company needs to make changes to the way it does business. The company this year has faced a wave of challenges for its brash business style and aggressive expansion, including allegations it does not properly vet its drivers and that it uses software to deceive authorities in areas where Uber’s introduction was resisted.

More broadly, the latest decision in Uber employment case shines a spotlight on the so-called “gig economy,” where firms offer low cost and convenience at the expense of basic employee security for their workers. A July report by Labour MP Frank Field outlined that, because of the way Uber had structured its business, drivers in the U.K. were taking home as little as $2.64 an hour — less than a third of what they were entitled to under the country’s National Living Wage.