What the UK's Uber Driver Ruling Means for the Gig Economy
Uber Technologies Inc. drivers in the United Kingdom should be considered employees and have rights to minimum wage and holiday pay, a tribunal said in a ruling against the ride-hailing company.
November 10, 2017 at 04:18 PM
5 minute read
Uber Technologies Inc. drivers in the United Kingdom should be considered employees and have rights to minimum wage and holiday pay, a tribunal said in a ruling against the ride-hailing company.
Friday's ruling—which Uber says it intends to fight—mirrors the familiar debate in the United States that has generated a mountain of worker-classification suits against Uber, Lyft Inc. and other sharing-economy companies.
How these questions are resolved will be consequential to gig economy companies that built their business on the backs of independent contractors, and to the workers who feel vulnerable without the rights guaranteed to an employee.
Labor and management-side attorneys are closely watching a California case where a delivery driver for Grubhub fought for employee status. States and local governments are also grappling with similar questions.
The U.K. decision—which applied only to the drivers who brought claims and is not binding on any U.S. court—could still resound here: The ruling could influence state and federal lawmakers to take steps to resolve uncertainty about worker classification.
“This decision might end up in a perverse way being a good thing for American gig economy companies,” said Richard Meneghello, a partner in the Portland office of Fisher & Phillips. “When we look across the pond and see the confusion and disruption that it will cause, it may spur regulatory action on our side to avoid these kinds of cases.”
Gig economy workers, typically classified as independent contractors, do not have the right under federal labor law to bargain or have the right to benefits such as minimum wage, overtime and workers' compensation protections.
Several states have pushed for laws that “clarify” that Uber drivers are independent contractors, such as Texas and Florida. Other proposals have included portable benefits or creating a third class of employee under federal labor standards.
“We need as a society to restructure the laws where it comes to gig economy workers,” Meneghello said. “We need to stop trying to jam square pegs into round holes.”
In the U.K. case, more than 20 Uber drivers who worked in the London area filed suit against the company arguing they were misclassified as contractors and therefore not entitled to the benefits of an employee, or worker.
An Employment Tribunal last year agreed with the drivers. The appeals court upheld that decision, written by Judge Jennifer Eady of the Employment Appeal Tribunal.
The ruling said that because of the obligations of drivers to accept at least 80 percent of trip requests they receive in order to retain their status when the app was turned on and the driver was ready to work. This implied an “obligation for work.”
Attorneys representing both Uber and the drivers did not respond immediately to requests for comment Friday. Paul Jennings at Bates Wells & Braithwaite represented the drivers and Dinah Rose at Blackstone Chambers represented Uber.
“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed,” an Uber official in the U.K. told reporters in a statement. “The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive and so we intend to appeal.”
The Employment Appeal Tribunal ruling is posted below.
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