Uber loses employment rights case

The legal action started in October 2016 against Uber on behalf of first the GMB union and the IWGB union has resulted in a ruling against Uber’s appeal that its drivers are self-employed.

It is not the end for Uber, however. The firm plans on taking the case to the employment appeal tribunal and if that fails, to the Court of Appeal and the Supreme Court.

Their appeal revolves around two ideas. The first is that people are under no obligation to use their application. The second is that according to Uber, 80 percent of their drivers in the UK would rather be self-employed.

It seems, however, that popular support is against Uber. Judges in London also accused Uber of “resorting in its documentation to fictions, twisted language and even brand new terminology.” If the judges view Uber this way, a positive outcome for Uber can hardly be expected. While there would be advantages to Uber losing the legal case – such as drivers becoming eligible for pensions, minimum wage and benefits – it would also negatively affect many of its current drivers who prefer being self-employed.

The advantage of being self-employed is that drivers can work at any time and do not have to answer to management. This would change if the drivers are considered employees. Additionally, Uber claims that £565 can be made for 35-40 hours of driving a week, with about 20 percent of that to pay for petrol. While it may not be an appealing salary for someone driving for Uber full time, its flexibility may make it appealing as a side job. If Uber loses, it will also have broad repercussions.

Many drivers have invested in costs to become drivers: Private Hire Vehicle Licenses, initial tests of £240 and an additional £80 every six months or a one-off payment of £450, car insurance and for some, a car. Many drivers also depend on Uber to support their families.

On the other hand, small companies that were incapable of competing with Uber will be more successful again.

The legal case is another cost for Uber and begs the question if Uber will be able to continue to exist. While they made profits of $107m in the first trimester of 2014, this figure stands in stark contrast with the $2.8m loss in the first trimester of 2016. And even though the loss of net revenue has gone from 250 percent in the start of 2012 to 54 percent in the start of 2016, Uber is still losing money.

If Uber loses, other companies may be brought to justice. General secretary of the IWGB Jason Moyer Lee said that they would continue to hold companies to account by “challenging them in tribunal.”

The final outcome of the case is likely to be known in 2018.


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Elkyn Ernst

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October 2021
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