Uber’s business model in one of the company’s most lucrative markets is under threat after the British supreme court ruled that its drivers deserve more protections than it was willing to offer.
The court classified Uber drivers as “workers,” which means they are entitled to benefits like a minimum wage, working time protections and holiday pay. The decision could open the floodgates to a wave of cases already lined up in British courts, and the ride-hailing company may now have to cough up an additional £2 billion in taxes that it didn’t have to pay while its drivers were classified as self-employed.
Uber has tried to play down the impact of the ruling. In an emailed statement on Friday, Uber’s Regional General Manager for Northern and Eastern Europe Jamie Heywood said today’s Uber is different from the company in 2016, when the case was first filed.
He said the organization had made “significant changes” to its operations since, including “giving even more control over how [drivers] earn and providing new protections like free insurance in case of sickness or injury.”
British labor law expert Alan Bogg, who teaches at Bristol University, doubted that highlighting such changes will work as a legal strategy.
The company’s business model is based on “high levels of control and subordination of individual drivers who don’t have any effective entrepreneurial freedom,” Bogg said.
“It’s very difficult to imagine how Uber could reinvent itself to avoid [the effects of the judgment],” he added.
The ruling also confirmed Uber drivers are on the clock from the moment they turn the app on until they turn it off, rather than solely when they are driving a passenger to their destination.
This will also be an expensive blow to the company, Bogg said, and a “challenge” when it comes to figuring out when drivers are genuinely using the app to work.
Uber’s next steps
In response to Friday’s judgment, the company said it was launching a consultation with its U.K. drivers. It will share the results publicly “in the coming weeks,” said an Uber spokesperson.
The United Private Hire Drivers union said it was skeptical of what that consultation could achieve.
“Uber is already trying to wriggle out of giving us our worker rights as decided by the Supreme Court,” the group tweeted.
The group shared an email the company sent its drivers, which said the verdict “does not impact” them, adding “we want to understand what you value most about using the Uber app and what more we can do to make your experience even better.”
Uber now also faces a £2 billion tax bill, reported the Times. The company had previously escaped value-added tax payments owing to its drivers’ status as “independent contractors.”
Driving it home
As for Uber drivers themselves, Bogg said they could fight next for “employee” status, which would entitle them to more rights, like protection from unfair dismissal.
“I envisage that would come next, if you were thinking how to run strategic litigation,” he said.
But Yaseen Aslam, a former Uber driver and one of the plaintiffs in the case, said enforcement of existing laws must come first.
The country has “brilliant” labor laws at its disposal, Aslam said, but “the problem we have is a lack of enforcement by the government, and then companies like Uber, that can afford to not obey the law, get away with it.”
The lawsuits have been gruelling, he added. Uber is “happy to burn their money and fight and drag it out in order to burn us out.”
“The problem is that you don’t have a properly resourced, single labor market enforcement body,” said Bogg. “So that’s not anything that this judgment can affect.”
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