A London Court Is Trying To Change Uber's Business Model


In September, Uber appealed the 2016 tribunal ruling that found Uber had incorrectly classified a group of workers as self-employed rather than as contracted "workers".

Paul Jennings, partner at Bates Wells Braithwaite, which is representing the drivers, told Business Insider that the ruling could prove to be very expensive for Uber if drivers seek to claim back pay that they may have missed out on.

Uber has argued that since its drivers are "self-employed", they do not need to provide the basic benefits and safeguards that come with a formal employment contract.

It had appealed an Employment Tribunal case past year, brought by two former drivers, that ruled that drivers were effectively working for Uber while the app was switched on, and were not able to make themselves available to other operators as Uber claimed.

They claimed Uber was acting illegally by not giving drivers basic worker rights (such as holiday pay and the minimum wage) and won. The company this year has faced a wave of challenges for its brash business style and aggressive expansion, including allegations it does not properly vet its drivers and that it uses software to deceive authorities in areas where Uber's introduction was resisted. A July report by Labour MP Frank Field outlined that, because of the way Uber had structured its business, drivers in the United Kingdom were taking home as little as $2.64 an hour - less than a third of what they were entitled to under the country's National Living Wage.

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Maria Ludkin, legal director of the GMB, which took the original tribunal case, said: "Uber must now face up to its responsibilities and give its workers the rights to which they are entitled". Uber is planning to appeal the decision, meaning that the case could end up being dragged through the Court of Appeal and the Supreme Court.

"It is astonishing that the employment tribunal granted the two drivers worker status".

TUC general secretary Frances O'Grady said: "Uber should throw in the towel and accept today's judgment". The ruling could also have ramifications for other companies operating in the UK's so-called gig economy, such as Deliveroo. Sham self-employment exploits people and scams the taxman.

Experts say the ruling could have a substantial impact on Uber's British business model, as well as those for similar companies who rely heavily on contractors.