13 ms·

Uber drivers win employee rights case

182 points by johneth 10y ago

ethanbond 10y ago
This seems like really, really bad news for Uber. Could someone with more knowledge on the topic chime in on how this might manifest?
- jylam 10y ago
  It's funny that I thought the same thing but from the other side, "it seems a really good news for Uber 'employees' (or workers or whatever you want to call them)". That's something I always try to keep in mind while reading HN, most of us are well paid to do something we love, many of us are entrepreneurs (whatever that means, again), and most (?) of us are americans. Uber drivers are not well paid, and if they are they work 26 hours a day in LA or NYC or any big rich city and don't know if they still will earn enough money in one or two years because Uber will change their contract or let them go if they refuse.
  - ethanbond 10y ago
    Oh trust me, I'm not on Uber's side in this battle. Not that I necessarily think drivers should be employees, I haven't put much thought into it. I just hope we can get rid of our obsession with this cash-hemorrhaging law-flaunting business before it permanently changes our cities. We're starting to see cities basically substituting Uber for functional public transit and that's awfully dangerous when the business model isn't even close to sustainable. Rulings like this (regardless of if they're good or bad for Uber) are good for us simply because they give us a bit more signal on where things are going and how to prepare for it.
  - kylecordes 10y ago
    Actually I'm not convinced anyone really wins on a case like this, other than those who get paid additional code benefits or salary from past work. Going forward, it seems the more likely outcome for the typical driver is not that they suddenly get more money for future work, but that the job goes away or shrinks.
  - UK-AL 10y ago
    Much more likely is that the job market for drivers shrinks.
  - anuberaway 10y ago
    Most Uber drivers and customers I meet are very happy with the experience. Scores of them left traditional jobs to drive for Uber because they liked the pay and flexibility. Some of regulation of ride-sharing seems to be done out of a spirit of bitterness that they aren't "following the rules", and it doesn't seem to be in benefit of anyone.
    - ethanbond 10y ago
      What do you think regulation does if not punish people for not following the rules?
    - serge2k 10y ago
      > Some of regulation of ride-sharing seems to be done out of a spirit of bitterness that they aren't "following the rules", and it doesn't seem to be in benefit of anyone. Some rules are in place for a reason. The US is sadly awful when it comes to workers rights. It's why Uber can get away with this garbage. It's why "right to work" and "at will employment" laws exist. It's why IT workers are overtime exempt. It's why "union" is a dirty word in many circles. Skirting employment law isn't being DISRUPTIVE! It's just being a scummy business.
      - pitaj 10y ago
        > Skirting employment law isn't being DISRUPTIVE! It's just being a scummy business. No. Treating your workers poorly makes you a scummy business. Not every case of skirting employment law is a case of treating your workers poorly, and not every case of poor treatment is covered by employment law. Conflating legality with morality is a cornerstone of authoritarianism.
    - IanCal 10y ago
      > Scores of them left traditional jobs to drive for Uber because they liked the pay and flexibility. And this ruling won't affect the flexibility at all, and they'll be guaranteed minimum wage (which if the pay really is great won't make a difference at all).
- anexprogrammer 10y ago
  Uber always seemed to have a weak case at best, and seem to know it with their arbitration clauses - but no doubt they'll apppeal. If they ultimately lose then Uber will be liable for backpay for the employees, backtax and possibly a fine.
fiatjaf 10y ago
I hope Uber self-driving cars come and these people get unemployed.
- jacquesm 10y ago
  Why do you hope that? They simply disputed their status in open court and the judge seems to agree with them, whether or not Uber self-driving cars will come has no bearing on this case, and if and when they become un-employed it still will not be because of this case or any others. Of course employers the world over would love to get rid of their #1 cost, but that's no reason to break the law by pretending you don't have any employees when actually you do.
  - fiatjaf 10y ago
    Of course they didn't "simply disputed their status", they KNEW their status since the day they decided to become Uber drivers, after that they tried to use the law to steal money from Uber, probably advised by some lawyer and by the devil himself.
    - JonFish85 10y ago
      "law to steal money from Uber" Wow, that's impressive. Are you an Uber or Lyft shareholder? Because damn, this is a pretty strong sentiment, especially for a company that basically has flouted the law on it's way to a lofty valuation.
      - fiatjaf 10y ago
        You (and others in this thread) have a lot of respect for laws that are clearly unjust. Perhaps you just don't see how these laws are unjust, but it is wrong to assume that because it is a law it must be respected. The fact that the majority of laws are just maybe have induced you to this wrong view of what is a law. I bet, however, that you would understand the difference between what is good and what is lawful if you were faced with something like a law that demanded you to abandon your family, or kill your friends.
jacquesm 10y ago
That could be really bad if the tax man wants retroactive payments because of this ruling. 30K people times a few years that really adds up.
- ljf 10y ago
  Bad for who? Uber - yes, but for more honest/rule abiding competitors, the British public via the tax office, the drivers... seems pretty good
  - jacquesm 10y ago
    Yes, I meant for Uber.
Eridrus 10y ago
In the US many employers restrict the hours that employees can work to avoid paying benefits, is this a likely tack for Uber if they lose the appeals?
- rtpg 10y ago
  If Uber does this it will only strengthen the "employee" argument, and trigger even more issues for them in my nonlawyerly opinion.
- johneth 10y ago
  I think it might be quite difficult for them, as some of these rights apply regardless of hours worked: https://www.gov.uk/employment-status/worker https://www.gov.uk/employment-status/worker
  - tankenmate 10y ago
    Indeed one of the categorisations that qualifies you as self employed is whether the times you work are dictated to you or whether you set your own work timetable.
    - Eridrus 10y ago
      This would not necessarily dictate the times worked, just the amount. On site like Upwork it is common practice to have people work 10h/week to start so that work product can be evaluated before spending a tonne with a given contractor, or just to be able to keep up and interact at a reasonable pace. That's not really a legal argument, but it is some precedent that controlling the amount of hours worked is not the same as controlling exactly when they are worked.
- ubernostrum 10y ago
  Anyone in Santa Clara (California), I believe there's a ballot proposition this election to try to do something at the local level (basically, requiring additional work hours to be offered to existing employees first -- pushing them over into full-time status -- before hiring more part-time staff to take the hours).
mckee1 10y ago
Uber aren't profitable as it is (and their prices aren't that much cheaper than taxi's in the UK - so they can't just price hike without losing large numbers of customers). I assume their strategy for profitability now, in the UK at least, is just take VC money until driverless cars are legalised.
- caractacus 10y ago
  > their prices aren't that much cheaper than taxi's in the UK Really? I find them at least a third cheaper than taxis in London for any trip over about five minutes. I still feel guilty for taking an Uber (and note the difference in ability and knowledge immediately compared to black cabs). I'll be more inclined to take them, even with less of a saving, knowing that they are not allowed to treat their drivers quite so poorly.
  - mckee1 10y ago
    Sorry I should clarify - not that much cheaper than private hire taxis I meant, ie Addison Lee.
  - 0898 10y ago
    Yes, in London Uber is at least a third cheaper – possibly more – than a black cab fare. It's almost too cheap. I would happily pay a little bit more.
  - wlll 10y ago
    > I find them at least a third cheaper than taxis in London They're much cheaper than black cabs in Manchester too, but still about equivalent to private hire companies, surge pricing aside.
  - johnzim 10y ago
    I've had 2 situations where the Knowledge of black cab drivers has been hopelessly outclassed by the smarts of smartphone sat-nav. The cab drivers sat in traffic, the Uber drivers were alerted and rerouted. I arrived on time and with a smaller bill. Sure a black cab driver could have done that with smartphone alerts but none of them seem to make use of them - perhaps it's due to professional pride derived from passing the famously difficult "Knowledge" exams. Finally, black cabs are horrible if you're a cyclist, whereas Uber drivers are by-and-large no different from any other driver. I'm glad the Uber drivers have better employment status now but aside from the horrible misfortune of having bought a hackney license, I don't really have too much sympathy for Black Cab drivers.
chrischen 10y ago
Employees can't hop between apps, so this decision screws smaller competitors.
- IanCal 10y ago
  Workers can most definitely have more than one employer.
Neil44 10y ago
Good. If your path to ritches involves circumventing laws to protect workers in order to pay them less and undercut the competition, then basically you are the reason these laws exist.
- Shivetya 10y ago
  Okay, but I am trying to figure out how you exploit people who voluntarily work for you. They know what they will get paid and what is expected. If anything this protects the established taxi services more than benefiting any worker. Effectively they had probably pushed some people out of the ability to work for Uber
  - lsiebert 10y ago
    Because they work for them, they aren't independent contractors engaging in a negotiated business deal.
  - EliRivers 10y ago
    Exploitation of voluntary workers has a long, long history. It's basically the reason why unions came into existence, and employment laws. For example, in times of high unemployment, I could tell my workers that if they want to keep their jobs, they will work unpaid overtime, or take a pay cut, or give me a blow job, or work without adequate safety gear. These kind of Hobson's choices are real things that really happen. I frequently see a less explicit exploitation of voluntary workers in companies; when a company encourages a culture of long hours and not taking holidays, they're getting extra hours for free from their voluntary employees (take your holidays, people).
- UK-AL 10y ago
  Basically every other taxi driver firm also employees self-employed drivers.
  - muse900 10y ago
    Yes a lot of them, although you have to sign a proper employment form. And you can't turn off your phone whenever or work for other companies as well. You have a proper schedule. Uber works differently. The driver chooses when and how many hours he wants to work and when to pick a ride. If what was decided above applies for every uber employee its not gonna go down pretty well cause : Uber is going to become one more minicab agency, where it employees people with a schedule and its price is going to go up by a lot. Customers won't benefit and drivers won't either. Most of the drivers I've spoken to and I use Uber a lot have told me that the job is not as great or the pay depending on the amount of time they work and if they are actually renting a car or having a car on lease or own it, the thing that everyone told me is that they get to work whenever they want and thats awesome about it. Apply rules to the Uber is gonna force rules to be applied to drivers as well and thats not gonna go well.
huhtenberg 10y ago
Uber basically has little choice but to exit the UK if their efforts to keep it all on a contractual basis fails. This is similar to the Walmart vs Unions situation, I'm just curious how willing Uber is to make an example out of UK.
- tomgp 10y ago
  I think this is a strange way of looking at it. This is the British legal system making an example of Uber; asserting that existing laws apply even if you manage your workforce via an app.
  - deleted 10y ago
    [deleted]
  - anexprogrammer 10y ago
    It's not even that, Uber were just first to get a verdict. There's quite a few "fake self-employment" cases going through the system at the moment. Hermes and Deliveroo for certain, and I think Yodel too.
    - huhtenberg 10y ago
      But by the same logic a website that helps matching graphic designers with prospective clients should be considered said designers' employer? This makes no sense.
      - ascorbic 10y ago
        No, because under UK law it's not a simple checklist of things that make a person a contractor or a worker. There are a long list of reasons given in the judgment that apply to Uber and not, say, 99designs.
      - pmyteh 10y ago
        No; there's plenty of scope in English law for genuine self-employment. Genuinely self-employed people using a marketplace to find work are not employees of the marketplace. But if you (in reality) look like an employee of an intermediary firm - they have control over what, when, and how you work, you can't substitute yourself with a colleague or sub-contractor, and so on - then the state will ignore the 'form' of the contract you've signed and look to the substance. In many of these cases (especially those of the new courier firms who 'self-'employ drivers/deliverers) it looks and smells like an employment relationship. The courts are entitled to find that that's what it is.
juandazapata 10y ago
This is just a transition to driverless cars. Uber knows it and they are willing to pay the price.
- celticninja 10y ago
  That doesnt make sense. Yes I know that Uber want to transition to driverless vehicles but they cannot do that right now, they will need to maintain their momentum until such a time that they can do that. Which right now means adhere to the ruling to ensure that Uber still has a brand in the UK when they introduce driverless vehicles.
  - tcrews 10y ago
    That's at least 10-20 years before the legal implications of driverless cars are figured out. That is, if the technology really proves to be reliable. Uber better have a lot of VC money to keep burning $2.4bn/year.
- ethanbond 10y ago
  I hope all their investors have their fingers crossed that governments are going to be totally okay with self driving cars. Despite, you know, a) totally unproven technology, b) no legal structures for liability, c) no legal structures for taxation, d) unemployment of local transportation workers, e) 100% of "gains" from said unemployment going to a Silicon Valley company, f) Uber's long track record of basically being an asshole in every market it sets foot in, g) did I mention the fact that there are no driverless cars? And hey, if they're only losing (not spending, losing) $600,000,000 per month, they've got what, at least another couple years of VC money to burn? I'm sure everything will be figured out by then.
- phatfish 10y ago
  It probably depends if they can hold out for true autonomous vehicles to become a reality. It will be a long time before you see such cars on London streets, or anywhere without specifically designed lanes in fact. All that cash they have accumulated is either going towards building a true driving AI that can mimic human decisions and not kill. Or it's being used to lobby/bribe governments to make their business model work while having to give compensation to drivers.
noir-york 10y ago
Good. Good for the drivers, for employee rights, for reducing inequality. Good for the short term. Because within the next few years expect Uber to move to self-driving cars. Automating truckers will be a watershed. There will come a time when basic income of some sort will need to be considered by advanced economies, or else expect unemployment, unrest and the rise of populist demagogues who will be much better (worse) candidates than Trump.
- JonFish85 10y ago
  "Uber to move to self-driving cars" I still don't understand why that scenario requires an Uber. Once self-driving cars are a thing, why does Uber need to exist? Their competitors in that case would be actual car manufacturers, and rental car companies that already have a distributed system for deploying cars (and partnerships with manufacturers). What edge does Uber have? Certainly they have mindshare, but that can evaporate as quickly as it was built.
  - kylecordes 10y ago
    It seems to me that there will be a fair amount of consumer inertia. Uber may be able to benefit for a number of years from people thinking of this as the app to go to to get a ride, automated or otherwise. Of course in the long run (or even the medium run) that seems basically moot. There will be a zillion different ways to get essentially the same thing anyone else, I don't see any way for Uber to maintain a long-term advantage.
    - ethanbond 10y ago
      What evidence does anyone have that users are reluctant to uninstall and/or download another app? It takes literally a few seconds to do.
      - IanCal 10y ago
        It depends if there's any real benefit. If I can choose between these situations where I pay basically the same amount of money: * Open app, press hail button * Search for app, install app, setup user details, put in all my card details, press hail button Why would I choose the latter?
jasode 10y ago
The traditional taxi drivers in UK are already classified as independent contractors.[1] If Uber wanted to stay in the UK market, what would be the minimum they would have to do so that the Uber drivers are considered "contractors"? Is it just letting the drivers set their own fares? In other words, if sellers on ebay are not employees of ebay and programmers submitting apps to Apple iTunes Store are not employees of Apple, what does Uber need to do so they are considered a platform instead of an employer? [1]https://www.gov.uk/government/publications/vat-notice-70025-taxis-and-private-hire-cars/vat-notice-70025-taxis-and-private-hire-cars#drivers-of-taxis-and-private-hire-cars https://www.gov.uk/government/publications/vat-notice-70025-...
- pmyteh 10y ago
  English law recognises that there is a continuum between obviously employed and obviously self-employed, but the categorisation in any particular case will be down to the reality of the actual relationship between the employer/contracting company and its staff/contractors. There's no bright line, edge cases are ruled on case-by-case in the tribunal, as here. The actual criteria are pretty complicated - see the guidance manual at https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm0500 https://www.gov.uk/hmrc-internal-manuals/employment-status-m... - but the essence of it is control ("does the boss have the right to tell the worker what, where, when and how to work?"), personal service/substitutability ("can the worker send someone else to do the job, instead of doing it himself?"), risk ("who is on the hook if something goes wrong?") and some other factors. Very fact-specific. Incidentally, one of the standard features of traditional taxi drivers in the UK is that they don't set their fares, that being the responsibility of the local government. Uber drivers are licensed in the separate category of 'private hire', which has less stringent licensing (and the right for a firm to set its own fares) but a prohibition on picking up passengers by being hailed, and some other restrictions.
  - vog 10y ago
    > English law recognises that there is a continuum between obviously employed and obviously self-employed Very similar here in Germany, I guess. There is the term "Scheinselbstständig", which roughly translates to "fake self-employed". If you are formally self-employed but meet certain criteria, your "customer" (who is then considered to be more your employer than a customer) has certain obligations to you, and you have certain rights, which you can't easily trade away.
vslira 10y ago
I hope I'm not sounding too milton friedman-y here, but even if Uber's business model is dependent on circumventing labor laws to depress wages, in the case it goes under it won't be Uber drivers to benefit the most from it, but medallion owning companies and cab drivers.
- emp_zealoth 10y ago
  How about we import enough H1B workers to replace you and collapse wages, see how long youll think like that
- walshemj 10y ago
  The UK doesn't have a medallion system
  - UK-AL 10y ago
    We have black cabs which is just as bad.
  - anexprogrammer 10y ago
    Yes we do, they're the plates that are required to be displayed on both Black Cabs and Private Hire. In some areas they're quite valuable and sell for £30k+ (without the car to attach it to).
    - pmyteh 10y ago
      Private hire licencing is the responsibility of local authorities and probably varies. In many places, they're easy to get, though; Transport for London seem to have no limit on numbers and a fee of £100 a year - https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing/private-hire-vehicle-licence https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing...
      - anexprogrammer 10y ago
        Oh I know, but some areas still restrict licenses and it can lead to the ridiculous costs. Not sure how wide restrictions are, just that they're much less common than they used to be!
dkhenry 10y ago
This isn't an employee rights case. The only winner in this case is not employees but other Taxi services. If I were an Uber driver I don't want to be an employee. I want to be a contractor that can turn his app on or off at will.
- ascorbic 10y ago
  The judgment is clear that these are not mutually exclusive. In this case they've ruled that a driver is a worker during the period when they are logged-in to the app and ready to accept rides. They're still able to close the app, at which point they are no longer working.
  - dkhenry 10y ago
    Which doesn't make sense for an employer to continue to allow. If I have to pay start to pay for the fringe benefits of being an employee then I want the guarantees that come along with that. So I am going to want to have tighter control over when and where you are working and dictate more of your working conditions. The beauty of the independent contractor model is that it gives the contractor freedom. If I have to pay you a minimum wage when you have your app on then you better believe I won't allow you to have two apps running at the same time. This is a net loss for people who were just trying to make some money being a driver.
    - ascorbic 10y ago
      The point of this ruling is that Uber already does loads of things that only an employer would normally be able to do. That independent contractor flexibility just isn't there anyway. It sure as hell isn't employment law stopping Uber from setting a rule that prevents drivers from running two apps at once. In any case that's not really an issue in the UK, where there aren't any direct competitors such as Lyft.
      - dkhenry 10y ago
        I would disagree with the assertion that they do things only an employer can do ( which I understand means I am firmly wrong in the sight of UK law ), I would rather Uber can set additional rules in exchange for additional flexibility for the contractor. What I see in this ruling is that the "solution" seems to be make the contractors employees instead of give the contractors liberty to self direct more.
FT_intern 10y ago
Probably want to add "in the UK" to the title.
- mcjiggerlog 10y ago
  I don't see why the current title is incorrect. Not everything in the world happens in the US.
- johneth 10y ago
  I just used the title of the article at the time I submitted the link.
- M2Ys4U 10y ago
  I'd be happy with that if US-centric news has "in the US" after it.
  - FT_intern 10y ago
    there are similar cases going on in the US and most of Uber's revenue comes from the US.
ascorbic 10y ago
There are a lot of commenters who are misunderstanding the implications for this. This doesn't mean that every platform is now an employer. This case just happens to have many, many reasons that point to the drivers being workers not contractors. It's worth reading the judgment, but they have a useful summary of the points: The contradiction in the Rider Terms between the fact that ULL purports to be the drivers' agent and its assertion of "sole and absolute discretion" to accept or decline bookings. The fact that Uber interviews and recruits drivers. The fact that Uber controls the key information (in particular the passenger's surname contact details and intended destination) and excludes the driver from it The fact that Uber requires drivers to accept trips and/or not to cancel trips, and enforces the requirement by logging off drivers who breach those requirements. The fact that Uber sets the (default) route and the driver departs from it at his peril. The fact that UBV fixes the fare and the driver cannot agree a higher sum with the passenger. (The supposed freedom to agree a lower fare is obviously nugatory.) The fact that Uber imposes numerous conditions on drivers (such as the limited choice of acceptable vehicles), instructs drivers as to how to do their work and, in numerous ways, controls them in the performance of their duties. The fact that Uber subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure. The fact that Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected. The guaranteed earnings schemes (albeit now discontinued). The fact that Uber accepts the risk of loss which, if the drivers were genuinely in business on their own account, would fall upon them. The fact that Uber handles complaints by passengers, including complaints about the driver. The fact that Uber reserves the power to amend the drivers' terms unilaterally. https://www.judiciary.gov.uk/wp-content/uploads/2016/10/aslam-and-farrar-v-uber-reasons-20161028.pdf https://www.judiciary.gov.uk/wp-content/uploads/2016/10/asla...
- nickff 10y ago
  I think the issue that many readers have difficulties with is that rulings like this show how arbitrary and potentially political the regulations are. For instance, many heavily regulated professions in the USA (and probably the UK) could be classified as government employees by this definition, but they are not. Taxi drivers could even be seen as employees of their cities, as I know that London taxi cab drivers suffer conditions 2, 3, 4, 6, 7, 8, 12, and 13 at the hands of their local government.
chatmasta 10y ago
Why does Uber not allow its drivers to set fares? Wouldn't that be the true "Ayn Rand approach" to a marketplace? It would be cool if, as a rider, I could set a maximum fare I'm willing to pay, the drivers can bid on the fare, and I'm matched with some combination of nearestDriver * lowestFare. I imagine Uber has thought of this already, so there must be some reason they're not doing it. Why? Classic economics suggests this would result in a more efficient market. Perhaps Uber has modeled it and found it would also result in lower fares.
- nickff 10y ago
  I don't like to put words in other people's minds, or thoughts in their heads, but I would hazard to guess that Uber has set prices for the sake of stability, and to give the users (drivers and passengers) some expectation of what fares might look like on a 'normal' day. It may be that as more users join the platform, it could be transitioned to a bid/ask model. A bid/ask model may lead to more efficient pricing, but could increase transaction costs and lead to a less efficient overall market. I do not know whether this is the case, and it would be difficult to test, though Uber and Lyft are in a very good position to test.
  - pdkl95 10y ago
    > Uber has set prices for the sake of stability Uber forces price instability with "Surge Pricing".
  - return0 10y ago
    Couldn't each driver just propose a fare and let the customer accept it?
    - nickff 10y ago
      Yes, that would be an ask-only model. The issue there would be that the customers would have to select from a list, where the list composition was constantly changing (in busy areas). People might also be hesitant to user an app if they have no idea what it will cost. These issues would probably be solvable or solved, as I'm sure prices would stabilize in busy markets, and people would probably be willing to accept any price under $X; transaction costs would still be higher than with the current Uber/Lyft model.
nickjarboe 10y ago
I recently got my first smartphone and the main reason was to have access to Uber. Prices are 1/2 to 1/3 of taxis, with better availability. I'm not sure the pricing is sustainable and feel many drivers are just using Uber sell a fraction of their late model vehicle along with a small bonus. The other day I grabbed an Uber from Pleasanton to Oakland. $33 for 30 miles. Not much in it for the driver, if you consider all the costs, but he works in Pleasanton and lives in San Leandro. As they say, a win/win. Uber lets you set a destination for your pickup twice a day, which allows commuters to be drivers. I like this use case and hope these types of lawsuits against Uber doesn't eliminate it.
return0 10y ago
The greater issue is that legislation has not caught up with the "gig" economy. It needs to be recognized as a distinct form of employment with appropriate benefits.
- pmyteh 10y ago
  It is - the 'worker' status at issue in this case is distinct from both conventional employment and self-employment. Of course, the reason the law already had a suitable category is because the 'gig economy' looks an awful lot like a bunch of existing labour models (temporary, piecework-based, flexible and insecure) plus apps.

182 points by johneth 10y ago

This seems like really, really bad news for Uber. Could someone with more knowledge on the topic chime in on how this might manifest?

jylam 10y ago
It's funny that I thought the same thing but from the other side, "it seems a really good news for Uber 'employees' (or workers or whatever you want to call them)". That's something I always try to keep in mind while reading HN, most of us are well paid to do something we love, many of us are entrepreneurs (whatever that means, again), and most (?) of us are americans. Uber drivers are not well paid, and if they are they work 26 hours a day in LA or NYC or any big rich city and don't know if they still will earn enough money in one or two years because Uber will change their contract or let them go if they refuse.
- ethanbond 10y ago
  Oh trust me, I'm not on Uber's side in this battle. Not that I necessarily think drivers should be employees, I haven't put much thought into it. I just hope we can get rid of our obsession with this cash-hemorrhaging law-flaunting business before it permanently changes our cities. We're starting to see cities basically substituting Uber for functional public transit and that's awfully dangerous when the business model isn't even close to sustainable. Rulings like this (regardless of if they're good or bad for Uber) are good for us simply because they give us a bit more signal on where things are going and how to prepare for it.
- kylecordes 10y ago
  Actually I'm not convinced anyone really wins on a case like this, other than those who get paid additional code benefits or salary from past work. Going forward, it seems the more likely outcome for the typical driver is not that they suddenly get more money for future work, but that the job goes away or shrinks.
- UK-AL 10y ago
  Much more likely is that the job market for drivers shrinks.
- anuberaway 10y ago
  Most Uber drivers and customers I meet are very happy with the experience. Scores of them left traditional jobs to drive for Uber because they liked the pay and flexibility. Some of regulation of ride-sharing seems to be done out of a spirit of bitterness that they aren't "following the rules", and it doesn't seem to be in benefit of anyone.
  - ethanbond 10y ago
    What do you think regulation does if not punish people for not following the rules?
  - serge2k 10y ago
    > Some of regulation of ride-sharing seems to be done out of a spirit of bitterness that they aren't "following the rules", and it doesn't seem to be in benefit of anyone. Some rules are in place for a reason. The US is sadly awful when it comes to workers rights. It's why Uber can get away with this garbage. It's why "right to work" and "at will employment" laws exist. It's why IT workers are overtime exempt. It's why "union" is a dirty word in many circles. Skirting employment law isn't being DISRUPTIVE! It's just being a scummy business.
    - pitaj 10y ago
      > Skirting employment law isn't being DISRUPTIVE! It's just being a scummy business. No. Treating your workers poorly makes you a scummy business. Not every case of skirting employment law is a case of treating your workers poorly, and not every case of poor treatment is covered by employment law. Conflating legality with morality is a cornerstone of authoritarianism.
  - IanCal 10y ago
    > Scores of them left traditional jobs to drive for Uber because they liked the pay and flexibility. And this ruling won't affect the flexibility at all, and they'll be guaranteed minimum wage (which if the pay really is great won't make a difference at all).
anexprogrammer 10y ago
Uber always seemed to have a weak case at best, and seem to know it with their arbitration clauses - but no doubt they'll apppeal. If they ultimately lose then Uber will be liable for backpay for the employees, backtax and possibly a fine.

fiatjaf 10y ago

I hope Uber self-driving cars come and these people get unemployed.

jacquesm 10y ago
Why do you hope that? They simply disputed their status in open court and the judge seems to agree with them, whether or not Uber self-driving cars will come has no bearing on this case, and if and when they become un-employed it still will not be because of this case or any others. Of course employers the world over would love to get rid of their #1 cost, but that's no reason to break the law by pretending you don't have any employees when actually you do.
- fiatjaf 10y ago
  Of course they didn't "simply disputed their status", they KNEW their status since the day they decided to become Uber drivers, after that they tried to use the law to steal money from Uber, probably advised by some lawyer and by the devil himself.
  - JonFish85 10y ago
    "law to steal money from Uber" Wow, that's impressive. Are you an Uber or Lyft shareholder? Because damn, this is a pretty strong sentiment, especially for a company that basically has flouted the law on it's way to a lofty valuation.
    - fiatjaf 10y ago
      You (and others in this thread) have a lot of respect for laws that are clearly unjust. Perhaps you just don't see how these laws are unjust, but it is wrong to assume that because it is a law it must be respected. The fact that the majority of laws are just maybe have induced you to this wrong view of what is a law. I bet, however, that you would understand the difference between what is good and what is lawful if you were faced with something like a law that demanded you to abandon your family, or kill your friends.

jacquesm 10y ago

That could be really bad if the tax man wants retroactive payments because of this ruling. 30K people times a few years that really adds up.

ljf 10y ago
Bad for who? Uber - yes, but for more honest/rule abiding competitors, the British public via the tax office, the drivers... seems pretty good
- jacquesm 10y ago
  Yes, I meant for Uber.

Eridrus 10y ago

In the US many employers restrict the hours that employees can work to avoid paying benefits, is this a likely tack for Uber if they lose the appeals?

rtpg 10y ago
If Uber does this it will only strengthen the "employee" argument, and trigger even more issues for them in my nonlawyerly opinion.
johneth 10y ago
I think it might be quite difficult for them, as some of these rights apply regardless of hours worked: https://www.gov.uk/employment-status/worker https://www.gov.uk/employment-status/worker
- tankenmate 10y ago
  Indeed one of the categorisations that qualifies you as self employed is whether the times you work are dictated to you or whether you set your own work timetable.
  - Eridrus 10y ago
    This would not necessarily dictate the times worked, just the amount. On site like Upwork it is common practice to have people work 10h/week to start so that work product can be evaluated before spending a tonne with a given contractor, or just to be able to keep up and interact at a reasonable pace. That's not really a legal argument, but it is some precedent that controlling the amount of hours worked is not the same as controlling exactly when they are worked.
ubernostrum 10y ago
Anyone in Santa Clara (California), I believe there's a ballot proposition this election to try to do something at the local level (basically, requiring additional work hours to be offered to existing employees first -- pushing them over into full-time status -- before hiring more part-time staff to take the hours).

mckee1 10y ago

Uber aren't profitable as it is (and their prices aren't that much cheaper than taxi's in the UK - so they can't just price hike without losing large numbers of customers). I assume their strategy for profitability now, in the UK at least, is just take VC money until driverless cars are legalised.

caractacus 10y ago
> their prices aren't that much cheaper than taxi's in the UK Really? I find them at least a third cheaper than taxis in London for any trip over about five minutes. I still feel guilty for taking an Uber (and note the difference in ability and knowledge immediately compared to black cabs). I'll be more inclined to take them, even with less of a saving, knowing that they are not allowed to treat their drivers quite so poorly.
- mckee1 10y ago
  Sorry I should clarify - not that much cheaper than private hire taxis I meant, ie Addison Lee.
- 0898 10y ago
  Yes, in London Uber is at least a third cheaper – possibly more – than a black cab fare. It's almost too cheap. I would happily pay a little bit more.
- wlll 10y ago
  > I find them at least a third cheaper than taxis in London They're much cheaper than black cabs in Manchester too, but still about equivalent to private hire companies, surge pricing aside.
- johnzim 10y ago
  I've had 2 situations where the Knowledge of black cab drivers has been hopelessly outclassed by the smarts of smartphone sat-nav. The cab drivers sat in traffic, the Uber drivers were alerted and rerouted. I arrived on time and with a smaller bill. Sure a black cab driver could have done that with smartphone alerts but none of them seem to make use of them - perhaps it's due to professional pride derived from passing the famously difficult "Knowledge" exams. Finally, black cabs are horrible if you're a cyclist, whereas Uber drivers are by-and-large no different from any other driver. I'm glad the Uber drivers have better employment status now but aside from the horrible misfortune of having bought a hackney license, I don't really have too much sympathy for Black Cab drivers.

chrischen 10y ago

Employees can't hop between apps, so this decision screws smaller competitors.

IanCal 10y ago
Workers can most definitely have more than one employer.

Neil44 10y ago

Good. If your path to ritches involves circumventing laws to protect workers in order to pay them less and undercut the competition, then basically you are the reason these laws exist.

Shivetya 10y ago
Okay, but I am trying to figure out how you exploit people who voluntarily work for you. They know what they will get paid and what is expected. If anything this protects the established taxi services more than benefiting any worker. Effectively they had probably pushed some people out of the ability to work for Uber
- lsiebert 10y ago
  Because they work for them, they aren't independent contractors engaging in a negotiated business deal.
- EliRivers 10y ago
  Exploitation of voluntary workers has a long, long history. It's basically the reason why unions came into existence, and employment laws. For example, in times of high unemployment, I could tell my workers that if they want to keep their jobs, they will work unpaid overtime, or take a pay cut, or give me a blow job, or work without adequate safety gear. These kind of Hobson's choices are real things that really happen. I frequently see a less explicit exploitation of voluntary workers in companies; when a company encourages a culture of long hours and not taking holidays, they're getting extra hours for free from their voluntary employees (take your holidays, people).
UK-AL 10y ago
Basically every other taxi driver firm also employees self-employed drivers.
- muse900 10y ago
  Yes a lot of them, although you have to sign a proper employment form. And you can't turn off your phone whenever or work for other companies as well. You have a proper schedule. Uber works differently. The driver chooses when and how many hours he wants to work and when to pick a ride. If what was decided above applies for every uber employee its not gonna go down pretty well cause : Uber is going to become one more minicab agency, where it employees people with a schedule and its price is going to go up by a lot. Customers won't benefit and drivers won't either. Most of the drivers I've spoken to and I use Uber a lot have told me that the job is not as great or the pay depending on the amount of time they work and if they are actually renting a car or having a car on lease or own it, the thing that everyone told me is that they get to work whenever they want and thats awesome about it. Apply rules to the Uber is gonna force rules to be applied to drivers as well and thats not gonna go well.

huhtenberg 10y ago

Uber basically has little choice but to exit the UK if their efforts to keep it all on a contractual basis fails. This is similar to the Walmart vs Unions situation, I'm just curious how willing Uber is to make an example out of UK.

tomgp 10y ago
I think this is a strange way of looking at it. This is the British legal system making an example of Uber; asserting that existing laws apply even if you manage your workforce via an app.
- deleted 10y ago
  [deleted]
- anexprogrammer 10y ago
  It's not even that, Uber were just first to get a verdict. There's quite a few "fake self-employment" cases going through the system at the moment. Hermes and Deliveroo for certain, and I think Yodel too.
  - huhtenberg 10y ago
    But by the same logic a website that helps matching graphic designers with prospective clients should be considered said designers' employer? This makes no sense.
    - ascorbic 10y ago
      No, because under UK law it's not a simple checklist of things that make a person a contractor or a worker. There are a long list of reasons given in the judgment that apply to Uber and not, say, 99designs.
    - pmyteh 10y ago
      No; there's plenty of scope in English law for genuine self-employment. Genuinely self-employed people using a marketplace to find work are not employees of the marketplace. But if you (in reality) look like an employee of an intermediary firm - they have control over what, when, and how you work, you can't substitute yourself with a colleague or sub-contractor, and so on - then the state will ignore the 'form' of the contract you've signed and look to the substance. In many of these cases (especially those of the new courier firms who 'self-'employ drivers/deliverers) it looks and smells like an employment relationship. The courts are entitled to find that that's what it is.

juandazapata 10y ago

This is just a transition to driverless cars. Uber knows it and they are willing to pay the price.

celticninja 10y ago
That doesnt make sense. Yes I know that Uber want to transition to driverless vehicles but they cannot do that right now, they will need to maintain their momentum until such a time that they can do that. Which right now means adhere to the ruling to ensure that Uber still has a brand in the UK when they introduce driverless vehicles.
- tcrews 10y ago
  That's at least 10-20 years before the legal implications of driverless cars are figured out. That is, if the technology really proves to be reliable. Uber better have a lot of VC money to keep burning $2.4bn/year.
ethanbond 10y ago
I hope all their investors have their fingers crossed that governments are going to be totally okay with self driving cars. Despite, you know, a) totally unproven technology, b) no legal structures for liability, c) no legal structures for taxation, d) unemployment of local transportation workers, e) 100% of "gains" from said unemployment going to a Silicon Valley company, f) Uber's long track record of basically being an asshole in every market it sets foot in, g) did I mention the fact that there are no driverless cars? And hey, if they're only losing (not spending, losing) $600,000,000 per month, they've got what, at least another couple years of VC money to burn? I'm sure everything will be figured out by then.
phatfish 10y ago
It probably depends if they can hold out for true autonomous vehicles to become a reality. It will be a long time before you see such cars on London streets, or anywhere without specifically designed lanes in fact. All that cash they have accumulated is either going towards building a true driving AI that can mimic human decisions and not kill. Or it's being used to lobby/bribe governments to make their business model work while having to give compensation to drivers.

noir-york 10y ago

Good. Good for the drivers, for employee rights, for reducing inequality. Good for the short term. Because within the next few years expect Uber to move to self-driving cars. Automating truckers will be a watershed. There will come a time when basic income of some sort will need to be considered by advanced economies, or else expect unemployment, unrest and the rise of populist demagogues who will be much better (worse) candidates than Trump.

JonFish85 10y ago
"Uber to move to self-driving cars" I still don't understand why that scenario requires an Uber. Once self-driving cars are a thing, why does Uber need to exist? Their competitors in that case would be actual car manufacturers, and rental car companies that already have a distributed system for deploying cars (and partnerships with manufacturers). What edge does Uber have? Certainly they have mindshare, but that can evaporate as quickly as it was built.
- kylecordes 10y ago
  It seems to me that there will be a fair amount of consumer inertia. Uber may be able to benefit for a number of years from people thinking of this as the app to go to to get a ride, automated or otherwise. Of course in the long run (or even the medium run) that seems basically moot. There will be a zillion different ways to get essentially the same thing anyone else, I don't see any way for Uber to maintain a long-term advantage.
  - ethanbond 10y ago
    What evidence does anyone have that users are reluctant to uninstall and/or download another app? It takes literally a few seconds to do.
    - IanCal 10y ago
      It depends if there's any real benefit. If I can choose between these situations where I pay basically the same amount of money: * Open app, press hail button * Search for app, install app, setup user details, put in all my card details, press hail button Why would I choose the latter?

jasode 10y ago

The traditional taxi drivers in UK are already classified as independent contractors.[1] If Uber wanted to stay in the UK market, what would be the minimum they would have to do so that the Uber drivers are considered "contractors"? Is it just letting the drivers set their own fares? In other words, if sellers on ebay are not employees of ebay and programmers submitting apps to Apple iTunes Store are not employees of Apple, what does Uber need to do so they are considered a platform instead of an employer? [1]https://www.gov.uk/government/publications/vat-notice-70025-taxis-and-private-hire-cars/vat-notice-70025-taxis-and-private-hire-cars#drivers-of-taxis-and-private-hire-cars https://www.gov.uk/government/publications/vat-notice-70025-...

pmyteh 10y ago
English law recognises that there is a continuum between obviously employed and obviously self-employed, but the categorisation in any particular case will be down to the reality of the actual relationship between the employer/contracting company and its staff/contractors. There's no bright line, edge cases are ruled on case-by-case in the tribunal, as here. The actual criteria are pretty complicated - see the guidance manual at https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm0500 https://www.gov.uk/hmrc-internal-manuals/employment-status-m... - but the essence of it is control ("does the boss have the right to tell the worker what, where, when and how to work?"), personal service/substitutability ("can the worker send someone else to do the job, instead of doing it himself?"), risk ("who is on the hook if something goes wrong?") and some other factors. Very fact-specific. Incidentally, one of the standard features of traditional taxi drivers in the UK is that they don't set their fares, that being the responsibility of the local government. Uber drivers are licensed in the separate category of 'private hire', which has less stringent licensing (and the right for a firm to set its own fares) but a prohibition on picking up passengers by being hailed, and some other restrictions.
- vog 10y ago
  > English law recognises that there is a continuum between obviously employed and obviously self-employed Very similar here in Germany, I guess. There is the term "Scheinselbstständig", which roughly translates to "fake self-employed". If you are formally self-employed but meet certain criteria, your "customer" (who is then considered to be more your employer than a customer) has certain obligations to you, and you have certain rights, which you can't easily trade away.

vslira 10y ago

I hope I'm not sounding too milton friedman-y here, but even if Uber's business model is dependent on circumventing labor laws to depress wages, in the case it goes under it won't be Uber drivers to benefit the most from it, but medallion owning companies and cab drivers.

emp_zealoth 10y ago
How about we import enough H1B workers to replace you and collapse wages, see how long youll think like that
walshemj 10y ago
The UK doesn't have a medallion system
- UK-AL 10y ago
  We have black cabs which is just as bad.
- anexprogrammer 10y ago
  Yes we do, they're the plates that are required to be displayed on both Black Cabs and Private Hire. In some areas they're quite valuable and sell for £30k+ (without the car to attach it to).
  - pmyteh 10y ago
    Private hire licencing is the responsibility of local authorities and probably varies. In many places, they're easy to get, though; Transport for London seem to have no limit on numbers and a fee of £100 a year - https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing/private-hire-vehicle-licence https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing...
    - anexprogrammer 10y ago
      Oh I know, but some areas still restrict licenses and it can lead to the ridiculous costs. Not sure how wide restrictions are, just that they're much less common than they used to be!

dkhenry 10y ago

This isn't an employee rights case. The only winner in this case is not employees but other Taxi services. If I were an Uber driver I don't want to be an employee. I want to be a contractor that can turn his app on or off at will.

ascorbic 10y ago
The judgment is clear that these are not mutually exclusive. In this case they've ruled that a driver is a worker during the period when they are logged-in to the app and ready to accept rides. They're still able to close the app, at which point they are no longer working.
- dkhenry 10y ago
  Which doesn't make sense for an employer to continue to allow. If I have to pay start to pay for the fringe benefits of being an employee then I want the guarantees that come along with that. So I am going to want to have tighter control over when and where you are working and dictate more of your working conditions. The beauty of the independent contractor model is that it gives the contractor freedom. If I have to pay you a minimum wage when you have your app on then you better believe I won't allow you to have two apps running at the same time. This is a net loss for people who were just trying to make some money being a driver.
  - ascorbic 10y ago
    The point of this ruling is that Uber already does loads of things that only an employer would normally be able to do. That independent contractor flexibility just isn't there anyway. It sure as hell isn't employment law stopping Uber from setting a rule that prevents drivers from running two apps at once. In any case that's not really an issue in the UK, where there aren't any direct competitors such as Lyft.
    - dkhenry 10y ago
      I would disagree with the assertion that they do things only an employer can do ( which I understand means I am firmly wrong in the sight of UK law ), I would rather Uber can set additional rules in exchange for additional flexibility for the contractor. What I see in this ruling is that the "solution" seems to be make the contractors employees instead of give the contractors liberty to self direct more.

FT_intern 10y ago

Probably want to add "in the UK" to the title.

mcjiggerlog 10y ago
I don't see why the current title is incorrect. Not everything in the world happens in the US.
johneth 10y ago
I just used the title of the article at the time I submitted the link.
M2Ys4U 10y ago
I'd be happy with that if US-centric news has "in the US" after it.
- FT_intern 10y ago
  there are similar cases going on in the US and most of Uber's revenue comes from the US.

ascorbic 10y ago

There are a lot of commenters who are misunderstanding the implications for this. This doesn't mean that every platform is now an employer. This case just happens to have many, many reasons that point to the drivers being workers not contractors. It's worth reading the judgment, but they have a useful summary of the points: The contradiction in the Rider Terms between the fact that ULL purports to be the drivers' agent and its assertion of "sole and absolute discretion" to accept or decline bookings. The fact that Uber interviews and recruits drivers. The fact that Uber controls the key information (in particular the passenger's surname contact details and intended destination) and excludes the driver from it The fact that Uber requires drivers to accept trips and/or not to cancel trips, and enforces the requirement by logging off drivers who breach those requirements. The fact that Uber sets the (default) route and the driver departs from it at his peril. The fact that UBV fixes the fare and the driver cannot agree a higher sum with the passenger. (The supposed freedom to agree a lower fare is obviously nugatory.) The fact that Uber imposes numerous conditions on drivers (such as the limited choice of acceptable vehicles), instructs drivers as to how to do their work and, in numerous ways, controls them in the performance of their duties. The fact that Uber subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure. The fact that Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected. The guaranteed earnings schemes (albeit now discontinued). The fact that Uber accepts the risk of loss which, if the drivers were genuinely in business on their own account, would fall upon them. The fact that Uber handles complaints by passengers, including complaints about the driver. The fact that Uber reserves the power to amend the drivers' terms unilaterally. https://www.judiciary.gov.uk/wp-content/uploads/2016/10/aslam-and-farrar-v-uber-reasons-20161028.pdf https://www.judiciary.gov.uk/wp-content/uploads/2016/10/asla...

nickff 10y ago
I think the issue that many readers have difficulties with is that rulings like this show how arbitrary and potentially political the regulations are. For instance, many heavily regulated professions in the USA (and probably the UK) could be classified as government employees by this definition, but they are not. Taxi drivers could even be seen as employees of their cities, as I know that London taxi cab drivers suffer conditions 2, 3, 4, 6, 7, 8, 12, and 13 at the hands of their local government.

chatmasta 10y ago

Why does Uber not allow its drivers to set fares? Wouldn't that be the true "Ayn Rand approach" to a marketplace? It would be cool if, as a rider, I could set a maximum fare I'm willing to pay, the drivers can bid on the fare, and I'm matched with some combination of nearestDriver * lowestFare. I imagine Uber has thought of this already, so there must be some reason they're not doing it. Why? Classic economics suggests this would result in a more efficient market. Perhaps Uber has modeled it and found it would also result in lower fares.

nickff 10y ago
I don't like to put words in other people's minds, or thoughts in their heads, but I would hazard to guess that Uber has set prices for the sake of stability, and to give the users (drivers and passengers) some expectation of what fares might look like on a 'normal' day. It may be that as more users join the platform, it could be transitioned to a bid/ask model. A bid/ask model may lead to more efficient pricing, but could increase transaction costs and lead to a less efficient overall market. I do not know whether this is the case, and it would be difficult to test, though Uber and Lyft are in a very good position to test.
- pdkl95 10y ago
  > Uber has set prices for the sake of stability Uber forces price instability with "Surge Pricing".
- return0 10y ago
  Couldn't each driver just propose a fare and let the customer accept it?
  - nickff 10y ago
    Yes, that would be an ask-only model. The issue there would be that the customers would have to select from a list, where the list composition was constantly changing (in busy areas). People might also be hesitant to user an app if they have no idea what it will cost. These issues would probably be solvable or solved, as I'm sure prices would stabilize in busy markets, and people would probably be willing to accept any price under $X; transaction costs would still be higher than with the current Uber/Lyft model.

nickjarboe 10y ago

I recently got my first smartphone and the main reason was to have access to Uber. Prices are 1/2 to 1/3 of taxis, with better availability. I'm not sure the pricing is sustainable and feel many drivers are just using Uber sell a fraction of their late model vehicle along with a small bonus. The other day I grabbed an Uber from Pleasanton to Oakland. $33 for 30 miles. Not much in it for the driver, if you consider all the costs, but he works in Pleasanton and lives in San Leandro. As they say, a win/win. Uber lets you set a destination for your pickup twice a day, which allows commuters to be drivers. I like this use case and hope these types of lawsuits against Uber doesn't eliminate it.

return0 10y ago

The greater issue is that legislation has not caught up with the "gig" economy. It needs to be recognized as a distinct form of employment with appropriate benefits.

pmyteh 10y ago
It is - the 'worker' status at issue in this case is distinct from both conventional employment and self-employment. Of course, the reason the law already had a suitable category is because the 'gig economy' looks an awful lot like a bunch of existing labour models (temporary, piecework-based, flexible and insecure) plus apps.