Are Uber drivers workers or self employed?

10th November 2017

Uber has lost its appeal against a ruling to regard its drivers as self employed rather than workers. This is good news for anyone working in the ‘gig economy’ as it reinforces their position and entitles them to workers’ rights (which in principle are limited to holidays, sick pay, national minimum wage and a maximum 48 hour working week). Today’s news follows a number of challenges by people in the gig economy wanting to be recognised as workers. So far, this position has been upheld.

Will Uber challenge this ruling?

Read the full details about the latest Uber ruling.

28th October 2016

A tribunal has decided that Uber drivers are workers – which changes their employment rights.

The tribunal’s decision following a test case brought by two drivers is not only going to have an impact on Uber, but is likely to also affect other companies taking part in the ‘gig economy’ like Deliveroo and Taskrabbit.

What does it mean for Uber?

With drivers now classed as workers it means they will be entitled to:

  • the national minimum wage
  • holiday pay
  • maximum 48 hour week
  • rest breaks
  • protection under whistleblowing legislation.

The ruling could challenge the whole business model of Uber. It will most likely lead to higher fares for customers, as the costs of workers benefits are passed on.

However, the tribunal decided on the facts of the case that the Uber drivers were not employees. This means they cannot claim unfair dismissal or the right to a statutory redundancy payment along with a whole host of other ‘employee’ rights.

According to Uber, its UberX drivers earn well above the national living wage, with the average reported income at £16 per hour. The ruling may now mean a drop in income for the average driver, who will be unhappy with the court ruling.

Is this the end for the ‘gig economy’?

Uber’s loss will most likely drastically alter the trend of companies entering into contracts with self employed individuals.

The independent workers union of Great Britain are bringing a similar case against courier firm City Sprint in November 2016, in which the Uber ruling will be very persuasive. Leading companies Excel, Addison Lee and Courier are currently facing legal action too.

Someone who welcomes the decision is Jason Moyer-Lee, the leader of the Independent Workers Union of Great Britain, who said, “the so-called gig economy is a euphemism for exploitation.”

What does the ruling mean for others?

The decision increases the chance of other gig economy businesses facing claims of worker or employee status from their contractor workforce.

This may not necessarily be the end of the fight; with so much at stake it’s likely that Uber will be making an appeal, as a last attempt to save their business model.

Lindsey Kidd, Partner specialising in employment law at Hillyer McKeown said, “this represents a need for employment law to be more responsive to the fast changing, internet led, gig economy. Ahead of the decision today on the Uber case, the Commons Select Committee on Business, Energy and Industrial Strategy (previously BIS) launched an inquiry into this area focusing on the status and rights of those working in the ‘gig economy’ along with agency workers and self employed; this is in response to the rapid changes in atypical worker patterns and business models.”

The Inquiry, which closes on 19th December 2016, will look at working conditions and pay for people working in non-traditional employment roles, such as the Uber drivers in this case.

Today’s decision is a useful barometer as to where the lines may ultimately be redrawn.  Watch this space!