By Sam Schechner
The U.K.'s top court ruled that a group of former drivers for
Uber Technologies Inc. were entitled to a minimum wage and other
benefits while working for the company, dealing a setback to Uber
and other gig-economy firms in world-wide battles over their
employment model.
The U.K.'s Supreme Court, in a unanimous decision issued Friday,
upheld lower court decisions that granted the group of 25 drivers a
type of U.K. employment status at Uber. The company had appealed
those rulings, maintaining that its car-service and food-delivery
drivers are independent contractors, without employee rights.
While Friday's decision directly applies only to the former Uber
drivers involved, labor activists say it sets a potential precedent
for others in the U.K. who work for companies in the gig economy,
where apps distribute individual tasks to a pool of people that the
app makers regard as independent contractors.
Uber said that the decision doesn't automatically reclassify all
of its U.K. drivers, and that it is unrelated to its Uber Eats
food-delivery business. The company said that since the case was
filed it has added driver benefits such as insurance for sickness
and injury.
"We are committed to doing more and will now consult with every
active driver across the U.K. to understand the changes they want
to see," said Jamie Heywood, Uber's regional chief for Northern and
Eastern Europe.
The precise impact of Friday's decision on current Uber drivers,
and workers for other apps, will likely have to be litigated in
future cases.
Still, the U.K. decision offers a boost to labor activists in
Europe and the U.S. who have been sparring with Uber and other
companies such as DoorDash Inc. and Deliveroo Inc. over the
employment status of gig workers. Uber drivers and workers from
other companies will be able to bring new cases to claim benefits
on behalf of gig workers, said Rachel Mathieseon, a lawyer at Bates
Wells who argued on behalf of the drivers.
Uber and other gig-economy companies say reclassifying workers
as employees would add to costs, result in job losses and reduce
flexibility that their workers prize. The labor activists say
companies are shifting business risk to precarious workers without
other employment opportunities.
"This ruling will fundamentally reorder the gig economy and
bring an end to rife exploitation of workers by means of
algorithmic and contract trickery," said James Farrar, one of the
former drivers who led the case and who is now general secretary of
the App Drivers & Couriers Union.
Labor advocates have recently notched some other legal victories
in Europe. Swiss courts have forced Uber Eats to stop using
independent contractors in the Geneva area. A French court
reclassified a former Uber driver as an employee.
But the ride-hailing and delivery companies won a major battle
in California last fall when voters approved a ballot measure that
protected their contract-worker systems. The measure allows
companies including Uber, Lyft Inc. and Instacart Inc. to avoid
complying with a California law that would have reshaped the way
they operate in the most populous U.S. state.
Companies such as Uber have also been sweetening their benefits
as the pressure has increased. Uber has in recent years increased
benefits for its drivers, including new coverage for things like
sick leave and parental leave.
Some gig-economy companies have also started trying to strike
deals with labor unions that give workers some benefits but stop
short of making them employees.
Earlier this week, Uber published a white paper for European
policy makers outlining its proposals for how to regulate gig work,
something the European Union is set to consider this year. Among
its proposals are pooled eligibility for benefits and mechanisms to
ensure minimum earnings -- while maintaining gig workers as
independent contractors.
Uber says any precedent set by the U.K. ruling will be limited
because it has changed how it handles its relationships with
drivers since 2016, the beginning of the case that led to Friday's
decision. At that time, Uber had roughly 40,000 drivers in the
U.K., the court said Friday.
For instance, Uber says that drivers currently get to see the
destination and fare for rides before they accept them, and they
face no penalties for repeatedly turning down fares. In 2016,
drivers weren't given such information, and would be temporarily
locked out of the app as a penalty if they repeatedly declined
fares.
On Friday, the Supreme Court cited that penalty as among the
reasons it found that the former drivers were workers, though it
was one of several criteria listed.
The U.K. court also said that the group of Uber drivers weren't
independent contractors because Uber decided how much they are
paid, controlled how they work using a customer-rating system and
imposed contractual terms upon them. The court said those factors
entitled them to status as workers, a legal employment status in
the U.K. that falls between a full employee and an independent
contractor.
The court also found that the Uber drivers' working time -- when
they are entitled to worker rights -- extended to whenever they
were connected to the app in the relevant territory, and were ready
and willing to accept fares. The court said Uber had contended that
their working time should be limited to when they were driving
passengers to their destinations.
"Drivers are in a position of subordination and dependency in
relation to Uber such that they have little or no ability to
improve their economic position through professional or
entrepreneurial skill," said George Leggatt, a judge on the Supreme
Court who read a summary of the decision Friday.
Uber has said that its drivers are their own bosses and choose
the hours they work, citing surveys showing that the majority say
that flexibility is the most important reason they work for
Uber.
Write to Sam Schechner at sam.schechner@wsj.com
(END) Dow Jones Newswires
February 19, 2021 07:07 ET (12:07 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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