Uber’s appeal against a landmark tribunal ruling in 2016 has been unsuccessful following a judgment handed down in the Court of Appeal yesterday (19 December).

Uber drivers shall continue to be classified as workers, directly employed by the company, and will be in receipt of all the employment law protections that this affords.

The appeal was lodged by Uber to overturn a 2016 Tribunal ruling that the hire-on-demand driver service should treat its drivers as workers not as self-employed as argued by the firm. The original decision was upheld after the judges reached a 2 -1 majority decision – finding in favour of the workers.

Uber’s contention was that its drivers should be treated as self-employed, in a similar way to that in which taxi drivers and other private-hire vehicles are. In Britain, the self-employed are not able to access basic employment-law protections such as for example the right to a minimum wage, paid holidays, sick pay and rest breaks.

The above benefits carry significant costs, which Uber’s business model has attempted to circumvent by misclassifying drivers as self-employed when in reality, on the facts and as re-confirmed by yesterday’s judgment they are workers. Uber has however introduced a number of benefits to its drivers this year (for example pairing up with insurance giant AXA to provide partner protection insurance for its European drivers in the event of injury, sickness and family leave) and its position is that the drivers enjoy the flexibility that the role offers, and that on average its drivers earn much more than the minimum wage.

So why have the drivers been classified as workers?

  • The court held that a number of features of Uber’s working arrangement are inconsistent with the driver having a direct contractual relationship with the passenger.
  • Uber was found to exert significant control over the drivers to provide an on-demand service, for example:

 – drivers are given 10 seconds to accept an trip referred through the app and continued failure to comply could result in the driver being blocked or suspended from carrying out further work.

– Uber’s servers calculate the fare at the end of a trip, not the drivers themselves, and the drivers are unable to arrange a higher fare direct with the passenger.  

– There is a requirement placed on drivers to accept a minimum of 80% of all trip requests received whilst available to work.

– Drivers can face penalties in the event that they failed to accept requests or cancel a trip.

The Employment Appeal Tribunal Hearing which upheld the original decision in 2016, (and which has subsequently been upheld in the appeal decision handed down yesterday), confirmed that Uber drivers were to be considered to be workers in the following circumstances:

  • If the drivers had the app switched on;
  • If they were within the territory in which they were authorised to work; and
  • If they were willing and able to accept assignments.

The win is likely to be welcome news for individuals in similar roles within the gig economy – the now widespread practice of individuals carrying out flexible, short term engagements, on a freelance basis, without fixed-term contracts. This is an area which has been widely criticised by unions as being exploitative. This decision, for now at least provides some certainty for those working in similar roles, however workers involved have argued that it should not be up to them to fight this cause and that rather it is the Government’s role to legislate for change that protects worker’s rights.

The journey for Uber is not over yet, as the firm has already confirmed that it has been granted leave to appeal – next stop the Supreme Court.  A spokeswoman for the firm has advised regarding the latest judgment that ‘This decision was not unanimous and does not reflect the reasons why the vast majority of drivers choose to use the Uber app’. We will be keeping a close eye on further developments.