Uber London finds itself with 30,000 employees after the UK Supreme Court rules that Uber drivers are workers of the company

Uber drivers entitled to minimum wage, leave and other workers' rights

Uber BV and ors v Aslam and ors [2021] UKSC 5[1]

The facts

In 2016, two Uber drivers took a case against Uber London, Uber Britannia Ltd and Uber BV (a Dutch company that owns the rights to the Uber app) seeking a declaration that they were workers of the company and entitled to the national minimum wage, paid annual leave and other workers’ rights. At that time, there were 30,000 Uber drivers registered in the London region.

The drivers also sought a declaration that they were working not only when they were transporting passengers, but also when they were logged into the Uber app, meaning they were willing and ready to work.  

The case made its way through the Employment Tribunal, the Employment Appeal Tribunal, the Court of Appeal and finally the Supreme Court which issued its decision on 19 February 2021. The drivers won each step of the way.

The law

The Employment Rights Act 1996 (UK) defines a worker both as a person working under an employment contract and as a person working under a “worker’s contract”. This is a contract where the worker personally undertakes work or offers services to another party who is not a client or a customer. The Supreme Court held that the Uber drivers fitted within the category of people working under a worker’s contract.  

A major difficulty for Uber was that it had no written contracts with the drivers. The Court said that in the circumstances, their relationship was to be inferred by conduct considered in its factual and legal context.

The existence of written contracts might not have helped though. The Court referred to a purposive approach to the problem and looking beyond the written terms of any agreement to the parties’ true agreement. The Court followed an earlier decision, Autoclenz Ltd v Belcher [2011] UKSC 41. Autoclenz had written agreements with a number of “valeters” performing cleaning services to Autoclenz’s clients. The written contracts specifically stated that the valeters were subcontractors and not employees. When this was challenged in Court, the Court ruled that the valeters were employees.

Uber’s arguments

Uber’s position was that the drivers were contracting directly with the passengers and that Uber was only providing the digital platform in exchange for a service fee of 20%. The drivers were free to choose when they worked and if they wanted to work. Even when logged on, the drivers had the flexibility of refusing to take a job although there was an expectation that if they were logged in the app, they would take the jobs offered by the platform. There were no restrictions on drivers from holding other jobs or even working for a competitor.

The Court’s decision

The Court held that Uber exercised significant control over the drivers. Uber’s platform determined the price for the fare and therefore how much the drivers would be paid. Uber established the service fee of 20% which the drivers had to accept. Uber imposed the terms according to which the drivers provided their services. Uber exercised control over how fares were offered, the information provided to the drivers, and monitored the drivers’ rate of acceptance (with penalties for too many refusals or cancellations). Uber also exercised control over how the services to clients were to be delivered, what the driver could discuss during the trip, banning exchange of personal details. Uber had a rating system which was used for the purposes of managing non-performing drivers and terminating drivers’ services.

The Court found that the entire service was heavily regulated by Uber. Furthermore, the Court said “it is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill. From the drivers’ point of view, the same factors – in particular, the inability to offer a distinctive service or to set their own prices and Uber’s control over all aspects of their interaction with passengers – mean that they have little or no ability to improve their economic position through professional or entrepreneurial skill. In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.” As such, they were no different than employees.

In relation to the time worked, the Court found that the drivers’ freedom to refuse some jobs was not fatal to their case as workers, if there was an obligation to do some amount of work. Uber already had means to ensure that the drivers would not turn down too many requests while they were logged on. The Court therefore held that the drivers were working while they were logged on the Uber platform.

What does this mean for Uber London?

Uber London will have to make a decision on how it will continue to operate with the new workforce, now entitled to minimum wage, annual leave and other workers’ rights. Uber London is likely to face claims for back-dated payments of wages and leave entitlements. It is also likely to have to review its insurance arrangements given the extended workforce for which it is now responsible. One thing seems to be clear, that the prices for Uber rides are likely to increase.

While this is a win for the workers’ rights, it is also a massive blow to the gig economy which relies on flexible, temporary, and freelancing relationships. Many gig participants may need to review their contracts.

Founded in 2009, Uber is one of the most brilliant innovations of the century. But while visionaries find new ways of working, developing digital platforms as enablers for flexible work, it seems the legislators and the Courts like to hold on to the old and common molds.

[1] https://www.supremecourt.uk/cases/docs/uksc-2019-0029-judgment.pdf.