Uber is as well known for its run-ins with regulators and the traditional taxi trade as it is for its app and car service. Its impact on traditional business models has even spawned the term ‘Uberfication of the economy’. Uber recently added a spat with the GMB trade union to its PR portfolio, which played out at the end of October before an Employment Tribunal in London. While the GMB trade union is no doubt fighting to retain a role for itself at a time when national trade unions are increasingly marginalised and have yet to find an effective way of confronting the globalised ‘gig’ economy, this (albeit first) round went squarely and rightly to the labour movement.
The test cases were brought by two Uber drivers with the support of the trade union. They claimed that they were workers within the employment rights legislation and therefore entitled to certain basic rights and safeguards. Uber maintained that its drivers are self-employed contractors. That, of course, suits its business model and corporate profits because it allows the company ready access to a workforce without having to assume any of the responsibilities of an employer. It effectively takes the model of the zero-hour contract a step further, for the proliferation of which some retailers have recently rightly been criticised.
In its landmark decision, the Employment Tribunal (even quoting the headline above from Shakespeare’s Hamlet) was scathing in its criticism of Uber’s arguments and agreed that the drivers were workers (but interestingly not employees, who have greater legal rights and protections). As a worker, drivers are entitled to paid annual leave, a maximum 48-hour average working week, minimum rest breaks, the national minimum wage and living wage, and protection against unlawful discrimination, to name a few key entitlements. They are still not entitled to statutory employment rights though, such as protection from unfair dismissal or statutory redundancy payments.
Not everybody is happy. More and more Uber drivers are clogging up the streets of London and, apparently, some drivers like the flexibility and added opportunities that Uber offers them. Users (including myself) like the convenience of a cheap ride at the push of a button. Uber’s business model is of course replicated in other sectors, too, with ever growing armies of self-employed contractors on ever shrinking incomes delivering our online shopping and take-away food 24/7.
The decision conceivably has a massive knock-on impact on other ‘gig’ economy businesses. Unsurprisingly, Uber has already indicated that it will appeal. Ultimately though, we will have to decide whether we want to support large multi-national corporations who undermine society by eroding traditional employment models that enable people to earn a living while at the same time minimising the taxes and national insurance contributions they pay and thereby the contributions that keep the society, in which we all live, functioning. As far as I have been able to work out, the so-called ‘sharing economy’ involves you and me sharing our money with these corporations. I for one do not believe for a moment that Uber is concerned about the flexibility that it offers to its workforce as opposed to simply its bottom line. The message has even arrived with Government, which is setting up a review of modern working practices, and with HMRC, which is setting up a new employment status and intermediaries team to investigate businesses.
Gregor Kleinknecht LLM MCIArb
is a German Rechtsanwalt and English solicitor, and a partner at Hunters Solicitors, a leading law firm in Central London.
Hunters Solicitors, 9 New Square, Lincoln’s Inn, London WC2A 3QN,
TEXT & PHOTOS: GREGOR KLEINKNECHT
Disclaimer: The views and opinions expressed in this column are those of the author and do not necessarily reflect the official policy or position of Discover Germany.