Rideshare juggernaut Uber has been ordered to classify its drivers as workers after a protracted legal battle that went all the way to the U.K. Supreme Court. Looking beyond its initial requirement to enshrine a minimum wage, holiday pay, and pension for 70,000 drivers, there’s a growing belief that the precedent will have serious ramifications for food delivery, a sector which hinges on disparities of power and capital between riders and the companies that employ them — or rather, don’t.
Why was the Supreme Court ruling on Uber drivers’ case?
This isn’t a new case, but the upholding of an employment tribunal from October 2016. Drivers James Farrar and Yaseen Aslam won that tribunal on the basis that they were workers, because Uber’s operational methodology and terms of conditions put them in a “position of subordination.” They argued that they were therefore entitled to workers’ rights, including minimum wage and holiday, and the employment tribunal ruled in their favour.
Why weren’t Uber drivers already classified as workers?
Uber’s business model, like that of other gig economy juggernauts like Deliveroo, relies on depressing labour costs. One of the ways it did this was classifying its drivers “self-employed contractors,” on the basis that they are performing services not for Uber, but for each individual passenger, with Uber acting as a “booking agent.” This meant that Uber was not required to pay a minimum wage, holiday pay, or pension.
Why is Uber classifying its drivers as workers now?
It has no choice. Since the employment tribunal ruled in Farrar and Aslam’s favour in 2016, Uber has fought that ruling in the Employment Appeal Tribunal; the Court of Appeal; and finally the Supreme Court, losing on each occasion. The Supreme Court is the highest court in the U.K., so if it rules in the drivers’ favour, that’s it. Initially, Uber attempted to confine the ruling to the drivers named in the judgement, but quickly changed its position.
Is Uber fully complying with the Supreme Court ruling?
Apparently not. While its granting benefits to all its drivers is being praised, Uber has said that those benefits will only apply “after accepting a trip request.” This contradicts the Supreme Court ruling, which upheld the tribunal finding that “for the purposes of the relevant legislation, the claimants were working for Uber London during any period when a claimant (a) had the Uber app switched on, (b) was within the territory in which he was authorised to work, and (c) was able and willing to accept assignments.” This, in plainer terms, means that drivers are workers while waiting to accept a trip. As Aslam explained to the Verge, it’s choosing to use this loophole because:
“It costs Uber next to nothing to operate in cities ... All the liabilities — the running costs and expenses of maintaining a vehicle — are shifted over to the driver. So the more drivers they have on the platform, the better it is for them: it doesn’t cost them anything but creates more availability for customers.”
Nader Awaad, Vice Chair of the Independent Workers’ Union of Great Britain (IWGB) United Private Hire Drivers branch, said: “To comply with the law, Uber needs to guarantee a minimum wage for the entire time we are logged into the app, as the Supreme Court ruled, and pay immediate compensation for backdated wages, holiday pay and pensions.”
Is Uber classifying its Uber Eats riders and drivers as workers?
No. Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, told Sky News that Supreme Court ruling was specific to the private hire vehicle industry.
Have Deliveroo or Just Eat responded to the ruling?
They haven’t, but a group they care about very much has. Investment forecasters have said that the ruling has “dampened the mood” around Deliveroo’s prospective £5 billion stock market float — the company recently set aside £112 million to cover anticipated legal challenges on its riders’ employment status. One analyst described the ruling as “an existential threat” to Deliveroo. Just Eat already changed its U.K. model to an hourly wage in December 2020, though that doesn’t yet apply to the whole country.
Will the Supreme Court ruling change food delivery?
Not right away, but quite possibly in the future. It is widely expected that this ruling will be used as precedent and / or a test case for workers currently classified as “self-employed,” despite being in a “position of subordination.”
If HMRC and / or Transport for London force Uber to comply with the ruling in full, it will set powerful precedent for food delivery riders. But a key sticking point — that Uber drivers could only overcome because of the company’s near monopoly on ride-share apps in the U.K. — will be that where this tribunal said drivers could not practically work for other companies, the U.K. food delivery market has considerably more, and more established, competition. Even if it may not be practically true that drivers are flipping between Deliveroo, Uber Eats, and Just Eat, establishing that they cannot do so will be far from guaranteed. Moreover, winning an individual tribunal is not as powerful as overarching legislation — evidenced by the way in which some U.S. city councils have intervened during the COVID-19 pandemic by capping delivery fees for restaurants entirely reliant upon delivery.
It’s also arguably not as powerful as consumer pressure on both the apps and legislating bodies. The economics of food delivery are such that for these apps to be profitable, they have to exploit someone — be it the worker or the restaurant; meanwhile, it is often the customer that feels they are being scammed. A tribunal can prevent one company from depressing labour costs this way, but it can’t necessarily do it for all of them. And while this Supreme Court ruling may provide better rights for those riding for Deliveroo and Uber Eats in time, right now the most meaningful thing customers can do is hit delete.