Uber is, after all – and as we know – an employer

This morning’s Supreme Court judgment that workers employed by Uber are, in fact, workers rather than people operating on an entirely bogus self-employed basis is welcome. Uber has been getting away with this kind of regulatory arbitrage for too long and the unions – both mainstream (GMB) and grassroots (the app drivers union) – as well as the officers and representatives, and members, responsible for bringing it to the very top of the UK court system deserve praise and congratulations.

The simple lesson is that unions work – do join one.

The Supreme Court ruled that Uber drivers are workers because:

  • Uber sets the fares and the drivers have no say
  • the contractual terms under which they work are dictated by Uber
  • while drivers are free to log in and out of the app as they choose, their choice of whether to accept rides is constrained by Uber
  • Uber exercises a significant degree of control over how drivers offer their services via specifying age, colour and condition of their car; as well as the route they need to take to carry the passenger. The approval ratings system also has something to say here, too
  • Uber restricts communication between passenger and driver to the minimum necessary to perform the trip; Uber handles all the co-ordination between driver and passenger.

As a consequence of these facts, the Supreme Court agreed with the conclusion of the original employment tribunal that Uber drivers were ‘workers’. The Supreme Court also ruled that Uber drivers were working whenever they were logged in not, as Uber had argued, whenever they accepted a trip request. This important finding in relation to the operation of the working time regulations means that Uber drivers are entitled to the minimum wage in respect of periods when they are logged-in to the app but not engaged on trips. Uber, while now licking its wounds, is clearly thinking about what to do next.

The UK court decision came shortly after a Dutch court decision ruling earlier this week (in Dutch) that employees there of Deliveroo, the courier-based food delivery operator, were also employees on the grounds of the control to which they were subject while at work administered through the (in)famous company algorithm which allocates tasks and which controls ‘the line’ between the production of food and the couriers bringing it to customers’ front doors.

It’s also an important tribute to the work of the UK court system – the lower level specialist courts (the employment tribunal and the Employment Appeal Tribunal) got this decision entirely right, as did the Court of Appeal. Uber has lost at each of the four stages of the UK court system, and all three of the appeals (on how each lower court had applied the law) that it was permitted to make. The decision of the UK court system is, as a result, entirely clear – and this will be important in the future.

This is indeed welcome news for a Friday – but, on Saturday, the hard work comes.

Firstly, the UK court decision is that Uber drivers are ‘workers’ – a slightly strange ‘halfway house’ in UK law which distinguishes between employees on the one hand and self-employed people on the other and, in the middle, the self-employed who are offering their services as part of a business carried on by others. The ACAS website has a helpful summary of the differences between the different classes but, essentially, while ‘workers’ are entitled to some rights of employment, they are not entitled to all and, importantly, they are excluded from unfair dismissal laws, from protection against redundancy and from paid sick leave and parental leave. Furthermore, those employed on zero hours contracts, working ‘as and when’, are frequently classed as ‘workers’. Those gaps (still) need closing.

Secondly, as my colleague Steve Jary, National Secretary for aviation and defence for Prospect, tweeted this morning: the absence of the long-awaited Employment Bill on workers’ rights after Brexit may now be shortened and may well include a clause reversing this judgment. Court decisions are an important source of protection when it comes to rights – but they are only ever interpretations: statute law always comes first and will set aside court judgments. We know that the Director of Labour Market Enforcement Strategy – a government office in charge of investigating compliance with labour market laws, chiefly in connection with the informal economy – is already suggesting action on app-based businesses, which gives a direct feed into whatever the government intends to do about this. We can expect the government to be taking an interest not least because one of the stated reasons for Brexit is that the EU’s regulatory approach is ‘too precautionary’ (£) and that, not least in new economy sectors, businesses need to be ‘set free’ from regulation to innovate further. This is where the clarity of the Supreme Court judgment is really important – there is no ‘confusion’ here for which legislation is necessary in order ‘to clarify’.

Furthermore, Prop 22, a pro-platform ‘gig economy’ law which was consulted on in California in last November’s US elections was passed with support from Uber, Lyft and other platforms in a campaign costing them collectively north of $200m. The venture capitalists funding these platforms – which are perennial eaters of money – have deep pockets in pursuit of monopoly rents and we can now expect similarly intensive, and expensive, lobbying efforts to be made here too to ensure the Employment Bill reverses the decision. Uber will come out of this fighting – and the other platforms will join it.

Thirdly, platform companies are at the forefront of a ‘new world of work’ in which their workers are the guinea pigs. What working conditions are ‘enjoyed’ by platform workers today will, over time, become the new standard for workers in conventional companies elsewhere. This is not only a question of legislation but active defence and pushback in practice. Aspects of working life through the pandemic – with greater use of surveillance software on computers to check what workers are doing while working at home – is one aspect of this while another is to ensure that there is a ‘right to disconnect’ – a right to downtime and non-work time. This is crucially important as the pandemic has trapped us into an existence in which we not only live at home but work from there and, indeed, get our meals delivered there, too.

Finally, there is also a warning for trade unions here, too. It’s not enough to win court judgments – active mobilisation of the workers involved is also extremely important: indeed, the two must go hand-in-hand. This goes well beyond exhortations to join a union and traditional organising efforts. These are fundamental – but, to coin a phrase, they are only ever the basis of trade unionism and they are not enough by themselves. This is about hearts and minds and engagement around actually doing something. It’s quite painful for some of us to realise that the logic of collective action (Colin Crouch) is not all about orienting people towards ‘the agreement’ (Hugh Clegg) but, actually, about the logic of mobilising workers to strive for something; nevertheless, this is an important realisation which must be made. Mobilising is about workers getting out and doing something together, not about joining a union with the promise that something might happen (tomorrow, later) to improve your terms and conditions if more of you join. Gains won in courts, and in agreements, must not only be defended but advanced and ‘staircase’ agreements (reached with a view to establishing an agreement in an employer with a view to improving it) will not function unless workers are not only organised but mobilised; not just collectivised by being brought into the union but actively engaged in entrenching gains and then extending them. Mobilisation is where grassroots unions score heavily – though it is clear also that winning Supreme Court cases is likely to require the support, not to say advice, of a mainstream union.

In short, this is a great win – but it is absolutely not the beginning of the end. The hard work must start now.

EDIT 22/2/21 to put right the previous version’s incorrect inference about drivers’ entitlement to the minimum wage; and to correct the name and affiliation of the grassroots union involved in bringing the action.

5 thoughts on “Uber is, after all – and as we know – an employer

  1. Thanks for a comprehensive analysis Calvin – somewhat more in depth than my 2 paragraphs on LinkedIn!

    However, repeating what I said there, and have said before, I think part of the problem here is that the Government has consistently ignored one of the fundamental issues: this isn’t a problem of employment law, or definitions of employee, worker and self-employed, it stems from a business model that seeks to take an unfair advantage over competitors by falsely claiming that the people involved are self-employed. To my eyes, that should be treated as anti-competitive practice that could, and should, be make illegal. There are numerous companies operating to this business model, several that have faced high profile ET cases (Pimlico Plumbers and Uber being top of the heap), but others have followed them.

    Don’t get me wrong, here are some internet based booking platforms that operate quite fairly, and do a very good job but, while their products/services are high quality and prices are competitive, they aren’t radically different because they aren’t based on an exploitative model.

    Looking at the taxi model, Uber has certainly made a dent, partly because their drivers don’t have the overheads of buying and licensing a black cab, partly because the drivers aren’t background checked in the same way, but mainly because they’re marginally cheaper (usually around 10% when I’ve done a price check) for the user. By contrast, City Cabs and Central Taxis both charge the same price to users because they’re regulated, licenced taxis. Both of them are Co-operatives, owned and run by the drivers who join, drivers who are professional, fully background checked and genuinely self-employed (whether they own or rent the cab they’re driving). The stark difference is that Uber are securing their drivers’ services for 40% (possibly more) less than the Co-operatives as they not only don’t pay the on-costs (sick pay, pension, holidays, insurance, etc.), they also don’t pay a rate that would allow the driver to cover those costs themselves. So, if the Uber is only 10% less than a real taxi, what happens to the difference? Pure profit, paid for by the drivers.

    And if that isn’t anti-competitive practice, I’m not sure what would be!

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    1. Thanks, Malcolm, for the response! Have been doing a bit of work recently on the platform economy so these points and arguments, and links, were pretty much in my head.

      You raise a really interesting point, and I think you’re entirely correct. Uber is indeed anti-competitive – and truly exploitative. It is absolutely unfair. The difficulty is, of course, that nothing will be done about this because companies under-cutting others on costs is not seen as being anti-competitive from a regulatory perspective. Firstly, lower prices benefit the consumer; and, secondly, the regulatory model over the past forty years has been focused on intervening on competition (or ‘trust’) grounds only where the consumer is not benefiting. We need to get out of that model, and mindset, before we can truly address these sorts of issues.

      Ever the sindicalist, it seems, I never saw the benefits of allying with consumers and this, in the new economy age, seems to adds a new argument for why!

      Here, I think the notion that traffic accidents being higher where Uber is present – there is some evidence for this – takes us somewhere; as will of course air pollution. So will the regulatory issues around driver vetting that you point to, too. But these are not enough by themselves. Until we’re prepared to see ‘good work’ as a goal worth regulating for – and that there is a price for that – we’ll continue to support Uber, etc. and therefore continue heading in a low-cost, offshore direction which drives cost down even where that cost is socially desirable. It’s perhaps the ultimate failure of a regulatory mindset which favours market economy values.

      And it is support too – all those losses which these companies are perennially making: they’re all offsettable against tax, and therefore public services, somewhere while the owners seek such eventual profits.

      It’s of course entirely questionable why they’re making such huge losses given such cost advantages. All that labour value, and money, is being vapourised substantially in marketing and lobbying costs, I suspect.

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