Gig Economy, Uber-Hero to Uber-Villain?
Wednesday, March 10, 2021
Wednesday, March 10, 2021
The recent ruling handed down by the UK Supreme Court, Uber vs Aslam, has already created a tsunami of “like” claims. Unsurprisingly fellow gig workers engaged by Uber since 2015 are now coming forward to recover compensation for minimum wage and holiday pay.
Andrew Nugent Smith, managing director at Keller Lenkner UK, a firm actively seeking out drivers to submit their claims said: “Uber fought this argument all the way to the Supreme Court but must now acknowledge its duty to its workers and compensate them fairly. We are also now working with the App Drivers & Couriers Union (ADCU) founded by lead claimants James Farrar and Yaseen Aslam.” To date Keller Lenkner has received 8,000 claims of a similar nature to the original claimants.
The suggested costs that each driver could recover is estimated to be between £10,000 and £12,000 although this will obviously depend on the length of their relationship with Uber.
With as many as 45,000 drivers in London alone this could prove to be a very expensive disruption to the renowned disruptors plans. Whilst the Supreme Court ruling only applies to the UK operation and drivers therein the knock-on effect to countries with similar jurisdictions and concerns for workers rights may throw a major spanner in the businesses plans for growth.
Launched in 2009 Uber has been the Gig Economy “poster boy” expanding its reach through acquisition and app introduction across the globe. In 2014 the business introduced Uber Eats as an online food ordering service with home delivery neatly tied in.
This recent ruling is the conclusion of a long running case which started way back in in 2016 with an Employment Tribunal, then UK Court of Appeal and finally the Supreme Court.
Many albeit not all Gig economy businesses rely upon a platform often in the form of a website and smartphone app that permits both end user and service deliverer to connect. The upside for many Uber drivers is that being a low cost, simple and effective method it attracts a large volume of public and corporate interest and therefore no shortage of willing customers. The downside is the cost pressure to maintain the model and keep customers returning thereby the fees for drivers are less than if they were to operate independently. The model also restricted drivers from many of the freedoms typically associated with the life of a contractor as opposed to an employee.
Black cab drivers in London and Transport for London famously took Uber to task and effectively banned the company from operating in the City and moved to remove its licence to operate in November 2019. The core concerns were passenger safety and a glitch in the driver identity system that enabled other drivers to pick up fairs booked in for another. This led to fears over lack of safety, insurance and security. As Uber immediately appealed this ruling they were permitted to continue operating until the appeal decision was made. On appeal Uber successfully won back the right to operate.
Such is the life of a tech disruptor business, certainly that is how many entrepreneurs would view these matters. Unfortunately, the benefits of simple, accessible, swift and reduced fare travel and steady supply of fares for drivers may now be jeopardy due to the requirement to find a balance in working arrangements and terms.
Clearly no worker should be taken advantage of or expected to work unreasonably long hours simply to make a minimum wage. In truth this lifestyle is not knew for the taxi trade with 83% of drivers registered as self-employed however the method by which a “gig” with Uber works feels more like full time employment but without the benefits.
Uber’s CEO Dara Khosrowhahi announced last month that they were to publish a paper titled “A Better Deal” in which the business would set out how they may find a new way to run the platform. As far as the UK is concerned that may be too little far too late. The case has been rumbling for five years and during this time a number of gig cases have found in favour of the workers making it clear that disruptor models and the businesses running them need to make greater consideration to those ultimately delivering the service.
Considerations for Business Owners Operating with contractors/gig workers
- Be mindful of the level of control you may have over a worker if its too heavily weighted toward the business it could present as more traditional employment.
- Do they own and supply their own equipment to undertake the work?
- Can contractors delegate or sub-contract their work/ service delivery?
- Do the contractors cover their own risks e.g., have appropriate insurance cover for delivering the service not reliant upon the businesses cover?
- What levels of freedom are afforded the contractors to manage their methods and volume of work or are they wholly reliant upon your business for work?
If you are at all concerned about the ruling in this case and the implications for your business, you should certainly access legal expertise. Fortunately, we have just the team. Please don’t hesitate to contact Robert Gibson or Martha Craven.