On February the 19th, the UK Supreme Court came forward with their decision that Uber drivers must be treated as workers rather than self-employed people. This has undoubtedly been a long-awaited verdict following a 5-year legal battle and has consequently made a dent in both the business model and value of Uber as an enterprise. With share prices falling since the announcement, let’s take a look at their rebuttal.
For Uber, a notion they have been consistent in arguing since their launch is that they are not a transport providing app, but rather a booking service that hires transport providers. Whilst this might sound like a small difference in a turn of phrase, the difference, in reality, is unquantifiably magnified. In doing so, Uber is exempt from paying a 20% VAT on fare alongside, up until late last month, avoiding obligations such as minimum wage and holiday pay.
In an official release that the company posted on their blog following the landmark judgment, they use an interview with a worker to argue that ‘at a time when we need more jobs, not fewer, we believe Uber and other platforms can be a bridge to a sustainable economic recovery.’
Here, in fewer words, Uber’s underlying message is clear that in a business model that champions flexibility, benefits denote further responsibility for both driver and company thus sacrificing the aforementioned USP. Whilst many understandably crave stability in an increasingly uncertain world, on the other hand, Uber markets on the age-old desires of freedom and independence. In a nutshell, their appeal is that if you so choose to, working for Uber can be a full-time job. However, should you decide against it nothing is stopping you, least of all set working hours?
Reasons behind the decision
On the surface Uber’s business model presents a workplace environment haven; flexible working hours and opportunities to pursue other careers name a few, however, the execution of it paints a slightly different picture. As recognized by the Supreme Court, Uber workers fell under the category of an employee in everything but their title. Here are some things that the courts took into consideration during deliberation that led them to their final verdict.
According to the BBC:
‘Uber set the fare which meant that they dictated how much drivers could earn’
‘Uber set the contract terms and drivers had no say in them’
‘Request for rides is constrained by Uber who can penalize drivers if they reject too many rides’
‘Uber monitors a driver’s service through the star rating and can terminate the relationship if after repeated warnings this does not improve.’
From this perspective, workers’ frustrations can be felt as many began their Uber career journey with expectations of independence and flexibility only to be met with restrictions. Instead of broadening opportunities, Uber’s business model has narrowed them for many in setting a precedent meaning that the only way to enhance your economic situation as a worker was to work longer hours, rather than to demonstrate professional skill.
It is also important to note that changes have been made in their approach over the course of these past 5 years, including removal of penalization should drivers reject rides and transparency over fare rates. Despite this, there is still room for change in improving the working conditions for gig workers in general. For example, due to the U. K’s legal system, those who brought forward the tribunal will most certainly feel the effects of being considered as employees rather than self-employed.
However, for the rest of the workers, Uber is under no obligation to enforce this verdict on the company as a whole, and instead, it is up to the workers to bring forward subsequent tribunals.
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