Uber Ruling at Top Court May Change Its U.K. Business Forever
(Bloomberg) -- Uber Technologies Inc. is bracing for a ruling from the U.K.’s top court that threatens to alter the firm’s business model in its biggest European market.
The Supreme Court will rule Friday on whether Uber drivers should be classed as “workers,” entitling them to minimum wage and holiday pay. Although the decision will only directly apply to the 25 drivers who brought the case in 2016, it will set a precedent for how gig workers are treated in the U.K.
While it’s not uncommon for the Supreme Court to overturn decisions, Uber has lost at every stage of this case so far. If they lose again this week, an employment tribunal will get to decide how much compensation to award the 25 drivers. And about 1,000 similar claims against the company, which had been stayed until after the ruling, may advance.
“It’s one of the biggest employment law decisions of my career,” said Joe Aiston, lawyer at Taylor Wessing. “It’s going to have a massive knock-on affect both to the gig economy and any business that engages independent contractors.”
A representative for Uber declined to comment ahead of the ruling.
Although the ruling will only apply to Uber, a lot of businesses will have to review their contractual terms as it could give people the impetus to pursue similar claims, said Aiston, who’s not involved in the case.
Many of the companies that rely on these workers have thrived during the global pandemic, deploying drivers to make deliveries to customers stuck at home while shops and restaurants were shut. Uber’s shares have gained about 50% in the last 12 months as the company leaned on its food-delivery service, Uber Eats, to make up for a drop off in customers using its ride-hailing app.
In Uber’s worst-case-scenario, the panel of Supreme Court judges may decide that drivers are entitled to minimum wage as long as they’re logged into the app. But this stance could let workers earn money from multiple companies at once, even if they aren’t taking jobs, and the court is more likely to take a “middle ground” on the issue, Aiston said.
Whatever the decision, Uber is unlikely to re-classify all of its drivers as workers. Since the claim was lodged five years ago, the company has reacted to political pressure to introduce safeguards for drivers, such as insurance that covers illness, injury and parental leave. It’s also provided financial assistance for a limited time if they catch Covid-19 or are forced to isolate. Uber’s betting these concessions will help prevent any future lawsuits over employment rights.
Earlier this week, Uber published a white paper proposing more benefits and protections to independent workers. Although it was targeted at European Union policy makers, who are expected to publish recommendations for improving working conditions later this month, it’s a vision that applies across its global business.
“We believe independent workers across Europe deserve better: work that offers flexible and decent earning opportunities when they want it, and protection and benefits when they need it,” Uber’s Chief Executive Officer Dara Khosrowshahi said. “All workers, irrespective of their employment status, should have access to protections.”
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