Uber Loses Right to Classify UK Drivers

Posted by: admin Date: 28 October 2016

Landmark Employment Tribunal Ruling

A UK employment tribunal has ruled that Uber drivers are not self-employed contractors but are entitled to workers’ rights, including the national living wage and holiday pay. The decision could affect more than 40,000 drivers across the UK and has major implications for the wider gig economy.

Impact on the Gig Economy

The ruling opens the door to claims from all UK drivers currently classified as self-employed and not entitled to holiday pay, pensions or other basic rights. Unite, the UK’s largest union, has already established a new unit to pursue cases of bogus self-employment, while Citizens Advice estimates that 460,000 people may be misclassified, costing the Treasury up to £314 million a year.

Background to the Tribunal Case

The case was brought by two drivers, James Farrar and Yaseen Aslam, on behalf of a group of 19 Uber workers. They argued that the San Francisco-based company set the terms of work, controlled fares and imposed penalties for refusal of jobs. In July, Farrar described “tremendous pressure” to work long hours and “repercussions” for cancelling pickups, sometimes earning as little as £5 an hour—below the £7.20 national living wage for those over 25.

Tribunal Findings

The judges dismissed Uber’s claim to be a mere technology platform and criticised its documentation for using “fictions, twisted language and even brand-new terminology.” They stated: “The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is… ridiculous.” Drivers accept trips strictly on Uber’s terms, negating any true self-employment status.

Responses and Reactions

• Leigh Day’s Nigel Mackay: Praised the judgment as “ground-breaking” and beneficial to all gig-economy workers wrongly classified as self-employed.
• GMB Union: Called the verdict a “monumental victory” that will ensure drivers enjoy employee rights and improved passenger service standards.
• Citizens Advice: Highlighted the complexity and cost of employment-status cases, calling for clearer rules and reduced tribunal fees.
• Uber UK Regional Manager Jo Bertram: Argued that many drivers prefer self-employment for flexibility and will challenge any move to worker status.

Next Steps for Uber

Uber has announced its intention to appeal to the Employment Appeal Tribunal. Any back-pay or changes to contracts will await the outcome of subsequent hearings, potentially escalating to the Court of Appeal or the Supreme Court.

Uber in Numbers

• 40,000 – Number of Uber drivers in the UK
• £5 – Hourly wage reported by a driver, below the national living wage
• $62.5 billion – Uber’s valuation at its last funding round
• 7 – Years since Uber began operating
• 460,000 – Estimated number of falsely classified self-employed workers in the UK
• £314 million – Annual tax and National Insurance revenue lost due to misclassification (Citizens Advice)