6 ms·

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 the

by 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.
  - lgieron 10y ago
    In the UK (and also in, for example, Poland) self-employed people pay much lower taxes than the employees - hence we're all very happy to trade away our rights.
    - gaius 10y ago
      But that has a social impact. You might be chuckling to yourself over how much NI you're not paying, but if you are injured the NHS will still treat you, and the money has to come from somewhere.
    - infinite8s 10y ago
      That's interesting, in the US it is the opposite, although you might be able to write off certain things as expenses so your overall taxable income is lower.
    - rwmj 10y ago
      I believe you are thinking of people who set up companies and pay themselves through dividends (which have a much lower tax rate), which is now (highly controversially) illegal -- search for "IR35". Ordinary self-employed people and sole traders pay nearly the same tax rates as employed people (National Insurance, a strange disguised tax, is at a different rate), but have many fewer rights, eg. no right to paid time off or sick pay. The question in this case is whether Uber drivers are self-employed or not. Not as it turns out.
      - nvarsj 10y ago
        > pay themselves through dividends (which have a much lower tax rate), which is now (highly controversially) illegal What on earth are you talking about... taking out dividends is not illegal, even for individual company owners. IR35 is about HMRC forcing self employed people to apply payroll taxes as if they were employed. Again, nothing to do with dividends.
  - rb2k_ 10y ago
    I was "self-employed" ("Freiberufler") and working for a US startup 100% of my billable hours. They hadn't formed a company in Germany at that point, so I just send them a bill and paid the employer and employee part of my health insurance. I got some letters about that and they asked me to prove that I was indeed self-employed. They didn't like the argument and concluded that I wasn't. The only thing that actually happened after a while is that I had to pay into the public retirement fund against my will. The "Deutsche Rentenversicherung" are seemingly the only people that care. From what I can tell there were no other obligations/rights that appeared after.
- jasode 10y ago
  >English law recognises that there is a continuum [...] There's no bright line, edge cases are ruled on case-by-case in the tribunal, Sure, I understand that. USA law is fuzzy in the same way. (The IRS 20 rules[1] are guidelines and not binary true false criteria usable for perfect machine learning classification.) But for the sake of discussion purposes on HN, I'd like for you or anyone to play the role of general counsel for Uber and say exactly and concretely what they would need to do. [1]https://www.google.com/search?q=irs+20+rules https://www.google.com/search?q=irs+20+rules
  - pmyteh 10y ago
    I'm not a lawyer; my exposure to employment law came in a previous existence as a workplace union rep and this is somewhat outside my expertise. As I understand it, if the Uber driver were allowed to have someone else drive their car for Uber when they felt like it, and had the freedom (actual, not nominal) to decide which clients they'd like to take on, and had control of their pricing, then there would be no question it was actual self-employment.
ascorbic 10y ago
Apple doesn't tell developers which apps they must develop. They don't insist that all development work is done by the named person. eBay doesn't tell sellers what they have to sell, nor boot them off for listing things that don't sell. App developers and eBay sellers can choose their price, and what they're selling. Uber drivers can do neither. If they're "on duty", they must accept rides or be penalised, and must charge the price set by Uber. The full judgment is here: 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... Page 29 gives a good summary of the reasons that point towards the drivers being workers.
- smokeyj 10y ago
  But how many enterprise shops hire contract developers, hand them a laptop and cubicle and say be here from 9-5.
  - m4tthumphrey 10y ago
    They'll get paid at much at more competitive rates though.
  - tholmes 10y ago
    Usually in this case the developer is an employee of another company (this company can tell them what to do) and the first business is paying the second for this developers time.
    - shubb 10y ago
      Being employed via 1 or more companies is not protection. The UK government is persuing people who were hired as contractors via a staffing agency which then encouraged them to set up a personal Ltd company. Typically these contractors pay themselves a mixture of dividends and normal paye pay to minimise tax, and the gov is saying the dividends were never really dividends so they need to pay tax and ni on them including the employers ni. Currently this is limited to specific staffing agencies who actively instructed new contractors to create a personal company but I don't think it will stop there. I've long felt most contractors are well within ir35 and it has been tollerated. This may be ending.
IanCal 10y ago
Or, they could: * Give them basic rest breaks * Give them basic holiday * Pay them the minimum wage Remember, they're not employees, they're workers. [edit - I'd be very interested to know why this is downvoted, these are the things afaik that they are required to do for workers (who are distinct from employees)]
- barrkel 10y ago
  There seems to be an assumption of full-time drivers implicit in your message. Uber drivers may only be driving a couple of hours a month. What does rest mean when someone can stop working at any time? The positive I see in the so-called gig economy is far more flexibility in employing underutilised labour. If government increases the transaction costs of employing underutilised labour, then it will probably stop employing underutilised labour. It could easily be a net negative. If there's an efficient way of working it out - i.e. keeping the transaction costs low - I'm not against regulating Uber as an employer. But it is a different form of working, and it's the kind of working that connected communication technology is best positioned to enable. It would be best if we didn't crush it under an assumption of regular employment.
  - IanCal 10y ago
    It's really not a different form of working, we've had irregular gig-like work for a long time. That's rather why the "worker" status exists as distinct from "employee". Just because you throw in an app or tech doesn't make it any different.
  - pmyteh 10y ago
    > What does rest mean when someone can stop working at any time? It means that once you've been working for a given period of time you get a short period of (paid) time-off. A few lines of code in the scheduler to not assign work for 15 minutes to people in this position, and a corresponding credit in the billing system, would do. The point applies more generally. I had a zero-hours contract with my university to teach very irregular hours on some IT training courses. I was entitled to holiday pay like every other worker. It accrued at a rate of something like one hour for every ten hours I worked, and was added to my pay. This form of working isn't in any way new; piecework, home working, day labour and similar things have existed for as long as employment law has, and there are low friction solutions already in place to make meal breaks, holidays and minimum wage calculations work. The tribunal judges here specifically ruled on when Uber drivers are working (in licensed area with app switched on) so everything else is pretty straightforward from an implementation point of view.

by jasode 10y ago

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.
- lgieron 10y ago
  In the UK (and also in, for example, Poland) self-employed people pay much lower taxes than the employees - hence we're all very happy to trade away our rights.
  - gaius 10y ago
    But that has a social impact. You might be chuckling to yourself over how much NI you're not paying, but if you are injured the NHS will still treat you, and the money has to come from somewhere.
  - infinite8s 10y ago
    That's interesting, in the US it is the opposite, although you might be able to write off certain things as expenses so your overall taxable income is lower.
  - rwmj 10y ago
    I believe you are thinking of people who set up companies and pay themselves through dividends (which have a much lower tax rate), which is now (highly controversially) illegal -- search for "IR35". Ordinary self-employed people and sole traders pay nearly the same tax rates as employed people (National Insurance, a strange disguised tax, is at a different rate), but have many fewer rights, eg. no right to paid time off or sick pay. The question in this case is whether Uber drivers are self-employed or not. Not as it turns out.
    - nvarsj 10y ago
      > pay themselves through dividends (which have a much lower tax rate), which is now (highly controversially) illegal What on earth are you talking about... taking out dividends is not illegal, even for individual company owners. IR35 is about HMRC forcing self employed people to apply payroll taxes as if they were employed. Again, nothing to do with dividends.
- rb2k_ 10y ago
  I was "self-employed" ("Freiberufler") and working for a US startup 100% of my billable hours. They hadn't formed a company in Germany at that point, so I just send them a bill and paid the employer and employee part of my health insurance. I got some letters about that and they asked me to prove that I was indeed self-employed. They didn't like the argument and concluded that I wasn't. The only thing that actually happened after a while is that I had to pay into the public retirement fund against my will. The "Deutsche Rentenversicherung" are seemingly the only people that care. From what I can tell there were no other obligations/rights that appeared after.
jasode 10y ago
>English law recognises that there is a continuum [...] There's no bright line, edge cases are ruled on case-by-case in the tribunal, Sure, I understand that. USA law is fuzzy in the same way. (The IRS 20 rules[1] are guidelines and not binary true false criteria usable for perfect machine learning classification.) But for the sake of discussion purposes on HN, I'd like for you or anyone to play the role of general counsel for Uber and say exactly and concretely what they would need to do. [1]https://www.google.com/search?q=irs+20+rules https://www.google.com/search?q=irs+20+rules
- pmyteh 10y ago
  I'm not a lawyer; my exposure to employment law came in a previous existence as a workplace union rep and this is somewhat outside my expertise. As I understand it, if the Uber driver were allowed to have someone else drive their car for Uber when they felt like it, and had the freedom (actual, not nominal) to decide which clients they'd like to take on, and had control of their pricing, then there would be no question it was actual self-employment.

ascorbic 10y ago

Apple doesn't tell developers which apps they must develop. They don't insist that all development work is done by the named person. eBay doesn't tell sellers what they have to sell, nor boot them off for listing things that don't sell. App developers and eBay sellers can choose their price, and what they're selling. Uber drivers can do neither. If they're "on duty", they must accept rides or be penalised, and must charge the price set by Uber. The full judgment is here: 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... Page 29 gives a good summary of the reasons that point towards the drivers being workers.

smokeyj 10y ago
But how many enterprise shops hire contract developers, hand them a laptop and cubicle and say be here from 9-5.
- m4tthumphrey 10y ago
  They'll get paid at much at more competitive rates though.
- tholmes 10y ago
  Usually in this case the developer is an employee of another company (this company can tell them what to do) and the first business is paying the second for this developers time.
  - shubb 10y ago
    Being employed via 1 or more companies is not protection. The UK government is persuing people who were hired as contractors via a staffing agency which then encouraged them to set up a personal Ltd company. Typically these contractors pay themselves a mixture of dividends and normal paye pay to minimise tax, and the gov is saying the dividends were never really dividends so they need to pay tax and ni on them including the employers ni. Currently this is limited to specific staffing agencies who actively instructed new contractors to create a personal company but I don't think it will stop there. I've long felt most contractors are well within ir35 and it has been tollerated. This may be ending.

IanCal 10y ago

Or, they could: * Give them basic rest breaks * Give them basic holiday * Pay them the minimum wage Remember, they're not employees, they're workers. [edit - I'd be very interested to know why this is downvoted, these are the things afaik that they are required to do for workers (who are distinct from employees)]

barrkel 10y ago
There seems to be an assumption of full-time drivers implicit in your message. Uber drivers may only be driving a couple of hours a month. What does rest mean when someone can stop working at any time? The positive I see in the so-called gig economy is far more flexibility in employing underutilised labour. If government increases the transaction costs of employing underutilised labour, then it will probably stop employing underutilised labour. It could easily be a net negative. If there's an efficient way of working it out - i.e. keeping the transaction costs low - I'm not against regulating Uber as an employer. But it is a different form of working, and it's the kind of working that connected communication technology is best positioned to enable. It would be best if we didn't crush it under an assumption of regular employment.
- IanCal 10y ago
  It's really not a different form of working, we've had irregular gig-like work for a long time. That's rather why the "worker" status exists as distinct from "employee". Just because you throw in an app or tech doesn't make it any different.
- pmyteh 10y ago
  > What does rest mean when someone can stop working at any time? It means that once you've been working for a given period of time you get a short period of (paid) time-off. A few lines of code in the scheduler to not assign work for 15 minutes to people in this position, and a corresponding credit in the billing system, would do. The point applies more generally. I had a zero-hours contract with my university to teach very irregular hours on some IT training courses. I was entitled to holiday pay like every other worker. It accrued at a rate of something like one hour for every ten hours I worked, and was added to my pay. This form of working isn't in any way new; piecework, home working, day labour and similar things have existed for as long as employment law has, and there are low friction solutions already in place to make meal breaks, holidays and minimum wage calculations work. The tribunal judges here specifically ruled on when Uber drivers are working (in licensed area with app switched on) so everything else is pretty straightforward from an implementation point of view.