What’s just happened?

Uber was first founded in San Francisco as a technology company by two entrepreneurs back in 2009. What started out as a small business has now overturned its revenue to over $11 billion, a high market capitalisation rate of $74 billion, and have employed over 20,000 people. [1]

What does this mean?

Uber popularised the UK in 2011 when a redundant banker, Richard Howard, emailed Uber in hopes of working with them. Howard was the first employee employed by Uber London, working closely with the CEO of Uber. Uber slowly grew and became a game-changer in the world as an alternative way of getting around. In 2016, it was estimated that every week in London 30,000 people downloaded the Uber app onto their phones and ordered a car for the first time, thus growing this technology company to be worth $60 billion. [2]

Although Uber has a very reputable name, there have been some controversies over how the employees are treated. The ride-hailing app has received claims from over 40,000 UK drivers for not being entitled to holiday pay, sick pay, pensions and many more worker’s rights which Uber immediately made appeals against.

The Uber ruling did force the UK Courts to reconsider a whole new gig economy business model, whereby the company utilizes an app and the internet to match up customers with nearby workers. It is clear that the firm do not employ their employees to carry out such tasks, and it is up to their own free will to carry out any sort of commitment towards the consumers.

Jo Bertram, the regional manager of Uber UK released a statement voicing out the truth among the UK drivers: “tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss. The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want.”

The judges were severely critical upon Uber’s ruling and said, “drivers do not and cannot negotiate with passengers/consumers […] they are offered and accept trips strictly on Uber’s terms”. The final ruling led to a loss of the right for UK drivers to be classified as self-employed workers.[3]

How will this affect the legal sector?

Over 5 years of constant debate amongst the UK Courts, the Supreme Court finally dismissed Uber’s appeal against a landmark employment tribunal, which ruled that UK drivers should be classified as workers with the access to minimum wage and paid holidays.

Judges ruled that Uber must consider drivers as workers who have more rights than independent contractors but less than employees. The conclusion was drawn from Uber’s control over them which includes setting fares and not informing the drivers of a passenger’s destination until they have been picked up. In addition, judges strongly criticised the controversial contracts that are required to be signed by the drivers, which was set up by the company.

James Farrar, the co-lead claimant and general secretary of the App Drivers and Couriers union was pleased with the outcome, stating that “this ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery. Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.”[4]

The CEO of Uber, Dara Khosrowshahi also stated, “this standard (for platform work) needs to recognise the value of independent work and be grounded in principles drivers and couriers say are most important to them.” He believes that the new approach is possible, where drivers having access to protections and benefits does not come at the cost of flexibility and of job creation.[5]

Written by Elene Chuah

Assessing Firms:

#Latham & Watkins LLP #Dentons #DLA Piper #Clifford Chance LLP # Kirkland & Ellis LLP

References:

[1] Brian O’Connell, “History of Uber: Timeline and Facts”, (The Street, 2nd January 2020) https://www.thestreet.com/technology/history-of-uber-15028611

[2] Sam Knight, “How Uber conquered London”, (The Guardian, 27th April 2016) https://www.theguardian.com/technology/2016/apr/27/how-uber-conquered-london

[3] Hilary Osborne, “Uber loses right to classify UK drivers as self-employed”, (The Guardian, 28th October 2016) https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status

[4] Sarah Butler, “Uber drivers entitled to workers' rights, UK supreme court rules”, (The Guardian, 19th February 2021) https://www.theguardian.com/technology/2021/feb/19/uber-drivers-workers-uk-supreme-court-rules-rights

[5] Foo Yun Chee, “Uber defends contractors ahead of EU law on gig workers' rights”, (The Sun Daily, 15th February 2021) https://www.thesundaily.my/world/reuters/uber-defends-contractors-ahead-of-eu-law-on-gig-workers-rights-ID6720930