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Uber loses court appeal against drivers' rights

100 points by andrewingram 9y ago

cabaalis 9y ago
I have a US perspective so I'm interested in why this ruling was made. If the driver doesn't want to drive on a given day, there's no one he has to call. There's no approval of the time off. He just won't get paid because he isn't doing work. In the US, one central tenant of being an employee vs a contractor is that your employer has power over your schedule, working location, and your work methods, which I see none of in Uber (which I did drive for back in 2016.) Uber drivers are allowed to drive for other groups and have other jobs. So what basis was this decision made, if not "they are complaining and the right thing to do is something, plus Uber=bad?"
- dazc 9y ago
  Rules on whether you are employed or self-employed are a bit grey in the UK and open to interpretation. https://www.gov.uk/employment-status/selfemployed-contractor https://www.gov.uk/employment-status/selfemployed-contractor
- cmdkeen 9y ago
  My (limited) understanding, and quoting from the article is that is is around: "holiday pay, paid rest breaks and the minimum wage". The first essentially boils down to extra money - if you work X days you get another days pay to simulate a paid holiday day. I'd imagine the second two would combine - if Uber accepts your app connecting and being "for hire" they guarantee you at least the minimum wage, and after a set period of working you get a paid break.
- Cthulhu_ 9y ago
  The other side of the coin is that of exploitation - no Uber rides, no income. Sick? No income. Accident while driving for Uber? Your problem, you pay for everything. If they're employees, they get a lot of rights and protections that maybe aren't common at all in the US. Companies like Uber (and e.g. construction companies, marketing agencies, etc) will push people to become self-employed so that the employer has no obligations or responsibilities whatsoever to the employee. This will allow them to out-compete the companies (like Black Cab in London) heavily, at the cost of the workers.
  - jstanley 9y ago
    If it's truly at the cost of the workers, why do the workers put up with it? If it's so easy to go and work for Black Cab in London, wouldn't they just do that instead? Or perhaps Uber are actually providing a useful source of work to drivers who otherwise wouldn't be working at all?
    - Silhouette 9y ago
      If it's so easy to go and work for Black Cab in London, wouldn't they just do that instead? It is not easy to go and work as a traditional taxi driver in London. There are various regulations on taxis and taxi drivers in the UK anyway, and in addition, in London taxi drivers are required to pass an infamously difficult test known as The Knowledge proving that they can navigate effectively around London streets. One of the big objections to Uber and the like is that they attempt to bypass some of those regulations and that training, and the regulations and training are there for a reason. To the extent that this confers a competitive advantage to Uber drivers over black-cabbies, it's a rather unfair one.
      - zlynx 9y ago
        If the rules "are there for a reason" then black cabs would be obviously superior and wouldn't be at a competitive disadvantage. So, obviously those rules don't matter as much to customers as convenience, price and availability do.
        Silhouette 9y ago
        If the rules "are there for a reason" then black cabs would be obviously superior and wouldn't be at a competitive disadvantage. In some ways, black cabs are obviously superior. To pick a few examples, their pricing is regulated by local authorities, they are required to be wheelchair accessible, and their drivers are required to have The Knowledge along with various other qualifications before being licensed. To the extent that black cabs may be at a competitive disadvantage compared to Uber's standard (non-surge) pricing, that is in part because Uber's current financial model seems to be subsidising every journey using the vast amounts of funding they have accepted. That is not sustainable. It is also in part because of exactly the sort of issues we're talking about today, where they've been cutting their costs at the expense of their drivers in legally questionable ways, which again is hardly playing on a level field.
- doctor_fact 9y ago
  On what basis? “92. ... The drivers provide the skilled labour through which the organisation delivers its services and earns its profits. We base our assessment ... in particular on the following considerations. (1) 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. (2) The fact that Uber interviews and recruits drivers. (3) 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. (4) 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. (5) The fact that Uber sets the (default) route and the driver departs from it at his peril. (6) 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.) (7) 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. (8) The fact that Uber subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure. (9) The fact that Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected. (10) The guaranteed earnings scheme (albeit now discontinued). (11) 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. (12) The fact that Uber handles complaints by passengers, including complaints about the driver. (13) The fact that Uber reserves the power to amend the drivers’ terms unilaterally.”
  - tom_mellior 9y ago
    Is that from the current ruling that is the topic of this article? Do you have a link?
    - doctor_fact 9y ago
      The judgement. https://assets.publishing.service.gov.uk/media/5a046b06e5274a0ee5a1f171/Uber_B.V._and_Others_v_Mr_Y_Aslam_and_Others_UKEAT_0056_17_DA.pdf https://assets.publishing.service.gov.uk/media/5a046b06e5274...
- jasode 9y ago
  >I have a US perspective so I'm interested in why this ruling was made. Your "USA perspective" reminded me of a concept called "court rulings as informal tariffs". Basically, when a foreign company is tried in the courts, the rulings will often favor the side that's aligned with the country's own court. (In this case, it's the UK drivers.) The idea is, we can't objectively analyze rulings purely on its legal merits. Instead, there's always a country's (unstated) self-interest that's entangled in the judgement. (E.g. our home-grown London drivers deserve more money instead of USA's Uber executives.) The USA would have the same bias. If a Korean company like Samsung is being sued by American company like Apple in a USA court, it's likely that Apple will win. Likewise, an American company like Google will lose more rulings by the EU than EU companies. Again, it doesn't mean Uber is innocent. It's an observation that we didn't see the same government scrutiny about UK ride-sharing services like Hailo (subsequently absorbed by Mytaxi) about classifying contractors as workers. UK taxi drivers are generally contractors[1] but Uber attracted the ire that other ride-sharing apps didn't. 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-... (EDIT: thanks for correction kbart. I was reading about Lexus and had Japan on my brain.)
  - kbart 9y ago
    Just a nitpick, but Samsung is Korean company.
  - vidarh 9y ago
    Hailo provided an ability for people who are largely already contractors an additional channel for bookings. The fact that these people are already operating a business and Hailo just provided an additional marketing and booking channel for them makes for a very different situation.
    - jasode 9y ago
      >largely already contractors But why were they "already contractors"? Doesn't that beg the question?[1] Take a look at section 2.1 of the link I cited. Just based on the text alone, it's not obvious why that "self-employed" criteria doesn't apply to Uber. Yes, the courts are free to interpret beyond the literal text but there doesn't seem to be objective consistency to it. The traditional UK taxi companies and the other ride sharing apps all seem to be misclassifying workers. I'm not familiar with Hailo. Are you saying that a person who didn't drive a taxi before can't sign up on the Hailo platform and immediately offer their services? Did they have to be associated with a traditional taxi company first as prerequisite? In what situations would drivers prefer Hailo over Uber and vice versa? [1] https://en.wikipedia.org/wiki/Begging_the_question https://en.wikipedia.org/wiki/Begging_the_question
- saas_co_de 9y ago
  > US perspective i.e. perspective of country where labor laws are not actually enforced.
  - alistairSH 9y ago
    I get the impression they are enforced, when they exist. But are less likely to exist in the first place. IE, much of the US is right-to-work with little employee protection.
    - maxerickson 9y ago
      Labor laws aren't rigorously enforced. Especially at low end jobs. People aren't necessarily aware of their rights and can't afford the potential disruption from filing complaints.
- akhatri_aus 9y ago
  What you've described is basically a zero hours employment contract, except that Uber conveniently sidesteps minimum wage by using the 'contractor' designation. I wonder if you've been sold the bill of goods reading your Uber=bad comment.
- rayiner 9y ago
  At least in the U.S., it's a multi-factor test, with schedule being only one part of it. Uber doesn't control when and where you work, but it definitely controls the customer relationship and quality of service. For example, it doesn't merely allow customers to rate drivers, it kicks out anyone who doesn't achieve a relatively high rating. It imposes pretty specific requirements on what kind of car you can drive. Uber's business needs are somewhat at odds with its legal case here. From a branding standpoint, Uber wants you to think of yourself as interfacing with Uber, not individual drivers. They want you to believe that if you call an Uber, you're going to get a certain level and quality of service. Contrast something like HomeAdvisor, which is undoubtedly an aggregator for contractors. Home Advisor doesn't tell its contractors what kind of equipment to use, it doesn't kick off contractors who don't achieve a 4-star rating, etc. It's explicitly marketed as a service for finding contractors, not a company that performs the service directly.
  - pas 9y ago
    > from a branding standpoint, Uber wants you to think of yourself as interfacing with Uber, not individual drivers. That doesn't really matter. Nor is it really true, since you inevitably interact with the driver. And it's understood that drivers are humans, and they are different. McDonalds operates a franchise, you got the same thing, but still, different companies. Yes, Uber had not structured itself as a franchise, but the use of [sub]contractors to provide a service with a controlled and sort of guaranteed (and well marketed and branded) quality - in itself - doesn't make the drivers employees. I think the line between contracting and employment is up to the host society to draw. Usually tax authorities have a few simple rules and if you are in compliance of at least half of them (or if you break at least X of them), then you are a contractor (or disguised employee). For example exclusivity is important here, the rule states that if a contractor gets more than 50% of its income from one entity, then that's one strike (and there are 5 other rules). Of course it seems in UK law the drivers have standing, so it means there must be some statute about when a contractor is to be treated like employees. (For example, let's say you can't use temp workers, contractors like regular full time employees and not give them free cafeteria, if your regular employees have that perk.)
    - 9y ago
- IanCal 9y ago
  Uber have significant control over the drivers and the way in which they work, enough to make the drivers workers but not employees. The original decision 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... Here's a quote someone on Reddit pulled out > Since it is essential to that case that there is no contract for the provision of transportation services between the driver and any Uber entity, the Partner Terms and the New Terms require the driver to agree that a contract for such services (whether a ‘worker’ contract or otherwise) exists between him and the passenger, and the Rider Terms contain a corresponding provision. > Uber’s case is that the driver enters into a binding agreement with a person whose identity he does not know (and will never know) and who does not know and will never know his identity, to undertake a journey to a destination not told to him until the journey begins, by a route prescribed by a stranger to the contract (UBV) from which he is not free to depart (at least not without risk), for a fee which (a) is set by the stranger, and (b) is not known by the passenger (who is only told the total to be paid), (c) is calculated by the stranger (as a percentage of the total sum) and (d) is paid to the stranger. Uber’s case has to be that if the organisation became insolvent, the drivers would have enforceable rights directly against the passengers. And if the contracts were ‘worker’ contracts, the passengers would be exposed to potential liability as the driver’s employer … The absurdity of these propositions speaks for itself.
  - fstuff 9y ago
    Lol those conditions almost sound like a silk road darknet market transaction. In that you're making a transaction with stranger and pay the stranger
koolba 9y ago
The flip side of this is that if Uber considers drivers as employees they could also prevent them from driving for their rivals. I think the shift toward the "gig economy" is going to see the creation of a third classification of worker that sits between employee and contractor, likely with the negatives of both. The financial services sector has a version of this by employing large numbers of contractors indirectly through body shops. I wouldn't be surprised if we go that route here too with Uber/Lyft owning the platform yet deferring employment costs to a separate company. Their providers would be businesses, not people, and to sign up to be a driver one would apply at one of those businesses.
- fiftyacorn 9y ago
  arent zero hour contracts effectively the third classification?
  - koolba 9y ago
    Had to look that up[1] as I've never heard of it before (I'm from the USA and it's a primarily UK concept). Based on my skimming of it, I think you'd still have the platform dealing with businesses, but the businesses would likely hire workers with this type of arrangement. [1]: https://en.wikipedia.org/wiki/Zero-hour_contract https://en.wikipedia.org/wiki/Zero-hour_contract
- danpalmer 9y ago
  In certain areas Uber strongly incentivizes drivers to only drive for Uber. This is done by making driving only cost-effective at 40+ hours a week. I understand this doesn't happen (or doesn't work) in some areas, New York comes to mind, but I've never met an Uber driver in the UK for whom it a) isn't a full time job, and b) who drives for other companies as well.
  - icebraining 9y ago
    This is done by making driving only cost-effective at 40+ hours a week. How do they do that?
thisisit 9y ago
Wow. This decision might upend the whole gig and sharing economy. Now every company needs to tread carefully in UK. Uber is struggling to achieve proper profitability even with "gig" and "sharing" economy and now this.
- kahnpro 9y ago
  If they’re only profitable because they are exploiting their workforce essentially evading labour laws, then good, they should be upended.
  - deleted 9y ago
    [deleted]
  - paul7986 9y ago
    Indeed! A workforce they are straight up using & will be kicked to the curb once they get their fleets of self driving cars on the road.
  - CryptoPunk 9y ago
    No one is being exploited. People choose to work through these platforms because it's the best option available to them. You don't raise employment standards by making low standards illegal. Low paying jobs work for some people because their circumstances don't give them the opportunity to get anything better. >>It's the best option available to them because Uber's driven out the competition. Like, people choose to work at Walmart because it's the only employer in a fifty mile radius - for example. They can't work for a local store or start their own anymore because everyone's going to Walmart. We're not talking about a small town here. These are large cities with diverse economies that contain thousands of employers. Uber drivers can do other jobs besides driving. There is absolutely no evidence at all that Uber has a employer monopoly in the areas it operates, and that this is why people choose to drive for it. Anecdotally I've heard that a lot of Uber drivers are very happy about being able to drive for Uber. And by anecdotally I don't mean a survey funded by Uber. I mean from internet comments where somebody claims to know someone who drives for Uber and really likes it. Take that for what it's worth. >>Yes, in fact, we do. A whole lot of practices have ended predominantly due to legal changes The vast majority of practices ended because the market value of labour increased as a result of growth in per capita productivity. Any mandatory standard that gets ahead of the prevailing market value of low-skilled labour just creates unemployment, meaning it doesn't raise the standard of employment for the less skilled. There's no free lunch in economics. >>Allowing these jobs to undercut competitors that pay properly propagates low paid situations where society end up having to subsidize the behavior of the companies in question because they don't pay livable wages. It's exactly the opposite. A mandatory minimum wage, like any price floor, leads to unutilized supply, which in the case of labour means greater unemployment. So you're increasing welfare costs by instituting a minimum wage. The market value of labour doesn't increase because low-paying jobs were made illegal. That's not how supply and demand work.
ed_blackburn 9y ago
Hardly a surprise a contractor in the UK, I need to be careful I'm not suddenly a "disguised employee". Uber do genuine independent contractors no favours. I don't blame Uber. I blame successive UK govts. who won't make the law clear and just let the courts decide on a case-by-case basis. My biggest fear is that they'll come done hard on all contractors IT Consultants through to taxi drivers.
- Swinx43 9y ago
  This is definitely a very legitimate fear and one which I share. I believe that given the changes made in the UK public sector for the 2016/2017 tax year this threat is ever increasing. You are absolutely correct in laying the blame at successive governments that refuse to make the law clear. Companies such as Uber and Deliveroo do not help the case as they are seen as the examples of how the term freelancer can be abused. Unfortunately I doubt that those in government care to make the distinction between this abuse of the system and genuine IT contractors.
- weego 9y ago
  IR35 guidelines for contractors are clear enough I feel. A lot of longer-term contractors are in fact effectively employees and and benefit from the security and structure of that yet want the tax benefits as well.
  - martinald 9y ago
    Agreed.
- kbart 9y ago
  I'm not intimately familiar with UK labor laws, but isn't they key difference between contractor and a "disguised employee" is that who gets the payment money? If you get all the payment (excluding tax etc.) for a work done then you are contractor, if the third entity takes a payment for your work and pays you percentage of it, then you must be employee and that third party - employer - is responsible for taxes, insurance and other duties mandated by labor laws. The latter part is what Uber tries to avoid at all cost. For the same reason employment agencies are also not allowed to take fees for finding a job and required to pay no less than minimum wage[0]. 0. https://www.citizensadvice.org.uk/work/rights-at-work/agency-workers/can-your-agency-charge-you-fees/ https://www.citizensadvice.org.uk/work/rights-at-work/agency...
hoppyluke 9y ago
The article says drivers are entitled to minimum wage. I thought Uber drivers choose their own hours so I don't see how this will work?
- a_humean 9y ago
  Not sure what your confusion is. Their gross-income divided by hours worked (doing a job or waiting for a job)? I guess they would become zero-hour contract employees, and so have the same statutory protections and benefits as perm employees except with no guaranteed hours? They would be entitled paid holidays for example, and would have a floor on their income proportionate to their hours worked.
- Kiro 9y ago
  Yeah, I really don't understand how a minimum wage is applicable to this type of work where "hours" make no sense.
- MarkCole 9y ago
  The minimum wage in the UK isn't a fixed monthly amount. It's a fixed hourly amount. So for someone aged over 25 they should receive £7.50 an hour The drivers will still be able to set their own hours, just they should be getting a minimum of £7.50 an hour for those they work.
  - hoppyluke 9y ago
    If drivers can decide how long they are willing to work, even if there aren't many/any passengers around, then Uber has no way to control costs. Unless they already have something in place to manage how many drivers are on the road in an area at any time? I thought that was just controlled by supply/demand, but that gets skewed by Uber needing to still pay minimum page when there is an over-supply.
    - lovich 9y ago
      And food producers are skewered by having to meet safety requirements when they could save money by ignoring them. Sucks for Uber that their business model doesn't win 100% of the time, but you don't allow individual entities to just ignore laws that set minimums whenever it's not the best for them.
CryptoPunk 9y ago
What is it going to take to let people offer to work for whatever wage they want? A ride sharing dApp on a blockchain? Or is the British government going to ban peer-to-peer networks too? >>When are we going to let companies pay their employees Slave wages, you mean. So it's okay if they offer to work for a "slave wage" as a self-employed small business owner, but if they work through a third party, then it's not okay? How it taking away an option in their interest? You're reducing the avenues through which they can sell their labour, which cannot possibly be to their advantage. >>It's not going to happen - we tried that before, and it didn't work. Remember the industrial revolution? Real good working conditions and pay in those factories, eh? It worked incredibly well. Wages grew rapidly throughout the industrial revolution. What do you expect would have happened if a $15/hr minimum wage were instituted in 1875, when per capita GDP was $1,000? >>The universal basic income. It doesn't make sense that people should be denied the freedom to offer to work for whatever wage they want until universal welfare is implemented.
- empath75 9y ago
  When are we going to let companies pay their employees Slave wages, you mean.
- Anderkent 9y ago
  It's not going to happen - we tried that before, and it didn't work. Remember the industrial revolution? Real good working conditions and pay in those factories, eh?
- tom_mellior 9y ago
  > What is it going to take to let people offer to work for whatever wage they want? The universal basic income.
- londons_explore 9y ago
  Interestingly, 'volunteers' get zero salary. The law as it stands allows an employer to pay zero, or >£7.50 per hour, but nothing in between. Lots of industries circumvent that by requiring 2/3 years experience to get a job. That experience can be as an unpaid volunteer. Now, over your career, you are forced to do 3 years unpaid, then the rest of your career paid, and guess what, on average you got under minimum wage. Live with your parents for the unpaid bit.
londons_explore 9y ago
I don't understand why Uber doesn't let drivers choose if they want to be employed or contractors? Those who choose employed would have strict working hours, performance requirements, etc. and if they miss any target even once would be fired. They would be free to reapply immediately with no penalty.
- Cthulhu_ 9y ago
  > I don't understand why Uber doesn't let drivers choose if they want to be employed or contractors? I do. Employees are a cost and a liability. They have to be paid weekly/monthly instead of per gig. They would have to be paid even when there's no rides. They have to be paid for if they end up sick, unable to work, on pregnancy leave. They need to have payments in their retirement fund. In the UK's case, they need to pay for the NHS. They need to buy them a car, and pay for upkeep, maintenance, damages and fuel. And they would fall under normal worker protection, so no, they wouldn't be fired if they missed any target even only once, there's procedures and legal requirements and such before formally firing someone. So it's completely in Uber's interests to only do contractors, no obligations or extra costs except for whenever they do a ride, and I'm fairly sure the compensation per ride is much lower than is necessary to operate a business. Where is the employee's benefits in this? Does Uber pay much more than they would earn working for a regular taxi company? I mean sure it's a job that people can do whenever they choose, but not doing it is a luxury. Assume most people need a 40 hour work week, or the income of one. Can't get that with Uber without working 80+ hours a week, and even then it depends on luck, supply, demand.
  - doctor_fact 9y ago
    And employees have to be given paid holiday. And you have to pay them PAYE (so ~18% employer's side National Insurance Contributions). And if they're self-employed below the VAT threshold, they don't have to charge 20% VAT. Muuuuuuch cheaper.
  - SilasX 9y ago
    Your answer implies that no one would ever higher an employee and would only use contractors. I don't think you've completely modeled the dynamics of the situation.
pimmen 9y ago
It’s interesting how Uber takes two very contradictory moral stands. ”We offer the ability for drivers to meet passengers, they should be glad they have this opportunity in the first place to make money.” ”The UK says that we have the ability to start a business, register a trademark and use the public infrastructure but they just don’t get that we’re way too cool and special for these ”labor law-thingies”. Doesn’t anyone care about how we feel about all of this?!”
setgree 9y ago
I personally don't care for the frame of "Uber vs drivers' 'rights'". I wold say that "Uber loses appeal against mandatory employment conditions" is more accurate, i.e. that employing drivers is now conditional on providing them paid holidays and such. FWIW paid holidays in particular make little sense for this kind of employment given that labor input is so variable.
chewbacha 9y ago
So, now the self-driving Uber is gonna come even sooner right? This is a huge financial incentive to ditch the driver altogether.
manigandham 9y ago
Another case of a small vocal minority creating unwanted regulation for the rest. Over several years and 1000s of rides in the US, 100% of the drivers I've asked liked being independent and did not want to be employees. Many of them already had other jobs or were students or retirees that liked making money on the side. For some reason, people keep forgetting that being a professional driver is easily available through Uber Black or any number of other transportation companies. Anyone who wants a full-time driving job can already get one. Rulings like these will end up hurting the vast majority of drivers who will now have to show up for full-time shifts at locations and times that Uber determines, while earning less money. Good luck to them.
- steve_gh 9y ago
  One issue is that in the UK, there is a tax called "National Insurance" or NI, which was originally intended to fund unempoyment benefits. As an employee, you have to pay a certain % of your wages. But the employer also has to pay a percentage of your salary, and they can't just deduct it from your wage. So, for Uber drivers on a minimum wage (£7.50 an hour), the 13.8% that Uber will pay will bump that up to approx £9 an hour that Uber has to pay. Then they will also require Employer's Liability Insurance (as the drivers are employees), will have to offer pension provision (legally required for all full-time employees in the UK), etc.
- mrtksn 9y ago
  Is it an absolute must to go to work everyday if you are formally employed? Isn't it possible have the same flexibility if you put it on your employment contract?
  - manigandham 9y ago
    Of course FT employment comes with vacation and sick time, but why would you get the same flexibility? Uber is 100% in charge of determining where and when you work, and you get paid the same hourly/salary regardless of how much work there is, so they'll optimize for riders as much as possible. In the long run it might be better for Uber, more tightly controlled supply will mean cheaper and better rides while drivers make less. I can see surge pricing becoming pure profit when you can just order drivers to be at a certain place instead.

100 points by andrewingram 9y ago

I have a US perspective so I'm interested in why this ruling was made. If the driver doesn't want to drive on a given day, there's no one he has to call. There's no approval of the time off. He just won't get paid because he isn't doing work. In the US, one central tenant of being an employee vs a contractor is that your employer has power over your schedule, working location, and your work methods, which I see none of in Uber (which I did drive for back in 2016.) Uber drivers are allowed to drive for other groups and have other jobs. So what basis was this decision made, if not "they are complaining and the right thing to do is something, plus Uber=bad?"

dazc 9y ago
Rules on whether you are employed or self-employed are a bit grey in the UK and open to interpretation. https://www.gov.uk/employment-status/selfemployed-contractor https://www.gov.uk/employment-status/selfemployed-contractor
cmdkeen 9y ago
My (limited) understanding, and quoting from the article is that is is around: "holiday pay, paid rest breaks and the minimum wage". The first essentially boils down to extra money - if you work X days you get another days pay to simulate a paid holiday day. I'd imagine the second two would combine - if Uber accepts your app connecting and being "for hire" they guarantee you at least the minimum wage, and after a set period of working you get a paid break.
Cthulhu_ 9y ago
The other side of the coin is that of exploitation - no Uber rides, no income. Sick? No income. Accident while driving for Uber? Your problem, you pay for everything. If they're employees, they get a lot of rights and protections that maybe aren't common at all in the US. Companies like Uber (and e.g. construction companies, marketing agencies, etc) will push people to become self-employed so that the employer has no obligations or responsibilities whatsoever to the employee. This will allow them to out-compete the companies (like Black Cab in London) heavily, at the cost of the workers.
- jstanley 9y ago
  If it's truly at the cost of the workers, why do the workers put up with it? If it's so easy to go and work for Black Cab in London, wouldn't they just do that instead? Or perhaps Uber are actually providing a useful source of work to drivers who otherwise wouldn't be working at all?
  - Silhouette 9y ago
    If it's so easy to go and work for Black Cab in London, wouldn't they just do that instead? It is not easy to go and work as a traditional taxi driver in London. There are various regulations on taxis and taxi drivers in the UK anyway, and in addition, in London taxi drivers are required to pass an infamously difficult test known as The Knowledge proving that they can navigate effectively around London streets. One of the big objections to Uber and the like is that they attempt to bypass some of those regulations and that training, and the regulations and training are there for a reason. To the extent that this confers a competitive advantage to Uber drivers over black-cabbies, it's a rather unfair one.
    - zlynx 9y ago
      If the rules "are there for a reason" then black cabs would be obviously superior and wouldn't be at a competitive disadvantage. So, obviously those rules don't matter as much to customers as convenience, price and availability do.
      - Silhouette 9y ago
        If the rules "are there for a reason" then black cabs would be obviously superior and wouldn't be at a competitive disadvantage. In some ways, black cabs are obviously superior. To pick a few examples, their pricing is regulated by local authorities, they are required to be wheelchair accessible, and their drivers are required to have The Knowledge along with various other qualifications before being licensed. To the extent that black cabs may be at a competitive disadvantage compared to Uber's standard (non-surge) pricing, that is in part because Uber's current financial model seems to be subsidising every journey using the vast amounts of funding they have accepted. That is not sustainable. It is also in part because of exactly the sort of issues we're talking about today, where they've been cutting their costs at the expense of their drivers in legally questionable ways, which again is hardly playing on a level field.
doctor_fact 9y ago
On what basis? “92. ... The drivers provide the skilled labour through which the organisation delivers its services and earns its profits. We base our assessment ... in particular on the following considerations. (1) 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. (2) The fact that Uber interviews and recruits drivers. (3) 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. (4) 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. (5) The fact that Uber sets the (default) route and the driver departs from it at his peril. (6) 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.) (7) 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. (8) The fact that Uber subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure. (9) The fact that Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected. (10) The guaranteed earnings scheme (albeit now discontinued). (11) 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. (12) The fact that Uber handles complaints by passengers, including complaints about the driver. (13) The fact that Uber reserves the power to amend the drivers’ terms unilaterally.”
- tom_mellior 9y ago
  Is that from the current ruling that is the topic of this article? Do you have a link?
  - doctor_fact 9y ago
    The judgement. https://assets.publishing.service.gov.uk/media/5a046b06e5274a0ee5a1f171/Uber_B.V._and_Others_v_Mr_Y_Aslam_and_Others_UKEAT_0056_17_DA.pdf https://assets.publishing.service.gov.uk/media/5a046b06e5274...
jasode 9y ago
>I have a US perspective so I'm interested in why this ruling was made. Your "USA perspective" reminded me of a concept called "court rulings as informal tariffs". Basically, when a foreign company is tried in the courts, the rulings will often favor the side that's aligned with the country's own court. (In this case, it's the UK drivers.) The idea is, we can't objectively analyze rulings purely on its legal merits. Instead, there's always a country's (unstated) self-interest that's entangled in the judgement. (E.g. our home-grown London drivers deserve more money instead of USA's Uber executives.) The USA would have the same bias. If a Korean company like Samsung is being sued by American company like Apple in a USA court, it's likely that Apple will win. Likewise, an American company like Google will lose more rulings by the EU than EU companies. Again, it doesn't mean Uber is innocent. It's an observation that we didn't see the same government scrutiny about UK ride-sharing services like Hailo (subsequently absorbed by Mytaxi) about classifying contractors as workers. UK taxi drivers are generally contractors[1] but Uber attracted the ire that other ride-sharing apps didn't. 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-... (EDIT: thanks for correction kbart. I was reading about Lexus and had Japan on my brain.)
- kbart 9y ago
  Just a nitpick, but Samsung is Korean company.
- vidarh 9y ago
  Hailo provided an ability for people who are largely already contractors an additional channel for bookings. The fact that these people are already operating a business and Hailo just provided an additional marketing and booking channel for them makes for a very different situation.
  - jasode 9y ago
    >largely already contractors But why were they "already contractors"? Doesn't that beg the question?[1] Take a look at section 2.1 of the link I cited. Just based on the text alone, it's not obvious why that "self-employed" criteria doesn't apply to Uber. Yes, the courts are free to interpret beyond the literal text but there doesn't seem to be objective consistency to it. The traditional UK taxi companies and the other ride sharing apps all seem to be misclassifying workers. I'm not familiar with Hailo. Are you saying that a person who didn't drive a taxi before can't sign up on the Hailo platform and immediately offer their services? Did they have to be associated with a traditional taxi company first as prerequisite? In what situations would drivers prefer Hailo over Uber and vice versa? [1] https://en.wikipedia.org/wiki/Begging_the_question https://en.wikipedia.org/wiki/Begging_the_question
saas_co_de 9y ago
> US perspective i.e. perspective of country where labor laws are not actually enforced.
- alistairSH 9y ago
  I get the impression they are enforced, when they exist. But are less likely to exist in the first place. IE, much of the US is right-to-work with little employee protection.
  - maxerickson 9y ago
    Labor laws aren't rigorously enforced. Especially at low end jobs. People aren't necessarily aware of their rights and can't afford the potential disruption from filing complaints.
akhatri_aus 9y ago
What you've described is basically a zero hours employment contract, except that Uber conveniently sidesteps minimum wage by using the 'contractor' designation. I wonder if you've been sold the bill of goods reading your Uber=bad comment.
rayiner 9y ago
At least in the U.S., it's a multi-factor test, with schedule being only one part of it. Uber doesn't control when and where you work, but it definitely controls the customer relationship and quality of service. For example, it doesn't merely allow customers to rate drivers, it kicks out anyone who doesn't achieve a relatively high rating. It imposes pretty specific requirements on what kind of car you can drive. Uber's business needs are somewhat at odds with its legal case here. From a branding standpoint, Uber wants you to think of yourself as interfacing with Uber, not individual drivers. They want you to believe that if you call an Uber, you're going to get a certain level and quality of service. Contrast something like HomeAdvisor, which is undoubtedly an aggregator for contractors. Home Advisor doesn't tell its contractors what kind of equipment to use, it doesn't kick off contractors who don't achieve a 4-star rating, etc. It's explicitly marketed as a service for finding contractors, not a company that performs the service directly.
- pas 9y ago
  > from a branding standpoint, Uber wants you to think of yourself as interfacing with Uber, not individual drivers. That doesn't really matter. Nor is it really true, since you inevitably interact with the driver. And it's understood that drivers are humans, and they are different. McDonalds operates a franchise, you got the same thing, but still, different companies. Yes, Uber had not structured itself as a franchise, but the use of [sub]contractors to provide a service with a controlled and sort of guaranteed (and well marketed and branded) quality - in itself - doesn't make the drivers employees. I think the line between contracting and employment is up to the host society to draw. Usually tax authorities have a few simple rules and if you are in compliance of at least half of them (or if you break at least X of them), then you are a contractor (or disguised employee). For example exclusivity is important here, the rule states that if a contractor gets more than 50% of its income from one entity, then that's one strike (and there are 5 other rules). Of course it seems in UK law the drivers have standing, so it means there must be some statute about when a contractor is to be treated like employees. (For example, let's say you can't use temp workers, contractors like regular full time employees and not give them free cafeteria, if your regular employees have that perk.)
  - 9y ago
IanCal 9y ago
Uber have significant control over the drivers and the way in which they work, enough to make the drivers workers but not employees. The original decision 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... Here's a quote someone on Reddit pulled out > Since it is essential to that case that there is no contract for the provision of transportation services between the driver and any Uber entity, the Partner Terms and the New Terms require the driver to agree that a contract for such services (whether a ‘worker’ contract or otherwise) exists between him and the passenger, and the Rider Terms contain a corresponding provision. > Uber’s case is that the driver enters into a binding agreement with a person whose identity he does not know (and will never know) and who does not know and will never know his identity, to undertake a journey to a destination not told to him until the journey begins, by a route prescribed by a stranger to the contract (UBV) from which he is not free to depart (at least not without risk), for a fee which (a) is set by the stranger, and (b) is not known by the passenger (who is only told the total to be paid), (c) is calculated by the stranger (as a percentage of the total sum) and (d) is paid to the stranger. Uber’s case has to be that if the organisation became insolvent, the drivers would have enforceable rights directly against the passengers. And if the contracts were ‘worker’ contracts, the passengers would be exposed to potential liability as the driver’s employer … The absurdity of these propositions speaks for itself.
- fstuff 9y ago
  Lol those conditions almost sound like a silk road darknet market transaction. In that you're making a transaction with stranger and pay the stranger

koolba 9y ago

The flip side of this is that if Uber considers drivers as employees they could also prevent them from driving for their rivals. I think the shift toward the "gig economy" is going to see the creation of a third classification of worker that sits between employee and contractor, likely with the negatives of both. The financial services sector has a version of this by employing large numbers of contractors indirectly through body shops. I wouldn't be surprised if we go that route here too with Uber/Lyft owning the platform yet deferring employment costs to a separate company. Their providers would be businesses, not people, and to sign up to be a driver one would apply at one of those businesses.

fiftyacorn 9y ago
arent zero hour contracts effectively the third classification?
- koolba 9y ago
  Had to look that up[1] as I've never heard of it before (I'm from the USA and it's a primarily UK concept). Based on my skimming of it, I think you'd still have the platform dealing with businesses, but the businesses would likely hire workers with this type of arrangement. [1]: https://en.wikipedia.org/wiki/Zero-hour_contract https://en.wikipedia.org/wiki/Zero-hour_contract
danpalmer 9y ago
In certain areas Uber strongly incentivizes drivers to only drive for Uber. This is done by making driving only cost-effective at 40+ hours a week. I understand this doesn't happen (or doesn't work) in some areas, New York comes to mind, but I've never met an Uber driver in the UK for whom it a) isn't a full time job, and b) who drives for other companies as well.
- icebraining 9y ago
  This is done by making driving only cost-effective at 40+ hours a week. How do they do that?

thisisit 9y ago

Wow. This decision might upend the whole gig and sharing economy. Now every company needs to tread carefully in UK. Uber is struggling to achieve proper profitability even with "gig" and "sharing" economy and now this.

kahnpro 9y ago
If they’re only profitable because they are exploiting their workforce essentially evading labour laws, then good, they should be upended.
- deleted 9y ago
  [deleted]
- paul7986 9y ago
  Indeed! A workforce they are straight up using & will be kicked to the curb once they get their fleets of self driving cars on the road.
- CryptoPunk 9y ago
  No one is being exploited. People choose to work through these platforms because it's the best option available to them. You don't raise employment standards by making low standards illegal. Low paying jobs work for some people because their circumstances don't give them the opportunity to get anything better. >>It's the best option available to them because Uber's driven out the competition. Like, people choose to work at Walmart because it's the only employer in a fifty mile radius - for example. They can't work for a local store or start their own anymore because everyone's going to Walmart. We're not talking about a small town here. These are large cities with diverse economies that contain thousands of employers. Uber drivers can do other jobs besides driving. There is absolutely no evidence at all that Uber has a employer monopoly in the areas it operates, and that this is why people choose to drive for it. Anecdotally I've heard that a lot of Uber drivers are very happy about being able to drive for Uber. And by anecdotally I don't mean a survey funded by Uber. I mean from internet comments where somebody claims to know someone who drives for Uber and really likes it. Take that for what it's worth. >>Yes, in fact, we do. A whole lot of practices have ended predominantly due to legal changes The vast majority of practices ended because the market value of labour increased as a result of growth in per capita productivity. Any mandatory standard that gets ahead of the prevailing market value of low-skilled labour just creates unemployment, meaning it doesn't raise the standard of employment for the less skilled. There's no free lunch in economics. >>Allowing these jobs to undercut competitors that pay properly propagates low paid situations where society end up having to subsidize the behavior of the companies in question because they don't pay livable wages. It's exactly the opposite. A mandatory minimum wage, like any price floor, leads to unutilized supply, which in the case of labour means greater unemployment. So you're increasing welfare costs by instituting a minimum wage. The market value of labour doesn't increase because low-paying jobs were made illegal. That's not how supply and demand work.

ed_blackburn 9y ago

Hardly a surprise a contractor in the UK, I need to be careful I'm not suddenly a "disguised employee". Uber do genuine independent contractors no favours. I don't blame Uber. I blame successive UK govts. who won't make the law clear and just let the courts decide on a case-by-case basis. My biggest fear is that they'll come done hard on all contractors IT Consultants through to taxi drivers.

Swinx43 9y ago
This is definitely a very legitimate fear and one which I share. I believe that given the changes made in the UK public sector for the 2016/2017 tax year this threat is ever increasing. You are absolutely correct in laying the blame at successive governments that refuse to make the law clear. Companies such as Uber and Deliveroo do not help the case as they are seen as the examples of how the term freelancer can be abused. Unfortunately I doubt that those in government care to make the distinction between this abuse of the system and genuine IT contractors.
weego 9y ago
IR35 guidelines for contractors are clear enough I feel. A lot of longer-term contractors are in fact effectively employees and and benefit from the security and structure of that yet want the tax benefits as well.
- martinald 9y ago
  Agreed.
kbart 9y ago
I'm not intimately familiar with UK labor laws, but isn't they key difference between contractor and a "disguised employee" is that who gets the payment money? If you get all the payment (excluding tax etc.) for a work done then you are contractor, if the third entity takes a payment for your work and pays you percentage of it, then you must be employee and that third party - employer - is responsible for taxes, insurance and other duties mandated by labor laws. The latter part is what Uber tries to avoid at all cost. For the same reason employment agencies are also not allowed to take fees for finding a job and required to pay no less than minimum wage[0]. 0. https://www.citizensadvice.org.uk/work/rights-at-work/agency-workers/can-your-agency-charge-you-fees/ https://www.citizensadvice.org.uk/work/rights-at-work/agency...

hoppyluke 9y ago

The article says drivers are entitled to minimum wage. I thought Uber drivers choose their own hours so I don't see how this will work?

a_humean 9y ago
Not sure what your confusion is. Their gross-income divided by hours worked (doing a job or waiting for a job)? I guess they would become zero-hour contract employees, and so have the same statutory protections and benefits as perm employees except with no guaranteed hours? They would be entitled paid holidays for example, and would have a floor on their income proportionate to their hours worked.
Kiro 9y ago
Yeah, I really don't understand how a minimum wage is applicable to this type of work where "hours" make no sense.
MarkCole 9y ago
The minimum wage in the UK isn't a fixed monthly amount. It's a fixed hourly amount. So for someone aged over 25 they should receive £7.50 an hour The drivers will still be able to set their own hours, just they should be getting a minimum of £7.50 an hour for those they work.
- hoppyluke 9y ago
  If drivers can decide how long they are willing to work, even if there aren't many/any passengers around, then Uber has no way to control costs. Unless they already have something in place to manage how many drivers are on the road in an area at any time? I thought that was just controlled by supply/demand, but that gets skewed by Uber needing to still pay minimum page when there is an over-supply.
  - lovich 9y ago
    And food producers are skewered by having to meet safety requirements when they could save money by ignoring them. Sucks for Uber that their business model doesn't win 100% of the time, but you don't allow individual entities to just ignore laws that set minimums whenever it's not the best for them.

CryptoPunk 9y ago

What is it going to take to let people offer to work for whatever wage they want? A ride sharing dApp on a blockchain? Or is the British government going to ban peer-to-peer networks too? >>When are we going to let companies pay their employees Slave wages, you mean. So it's okay if they offer to work for a "slave wage" as a self-employed small business owner, but if they work through a third party, then it's not okay? How it taking away an option in their interest? You're reducing the avenues through which they can sell their labour, which cannot possibly be to their advantage. >>It's not going to happen - we tried that before, and it didn't work. Remember the industrial revolution? Real good working conditions and pay in those factories, eh? It worked incredibly well. Wages grew rapidly throughout the industrial revolution. What do you expect would have happened if a $15/hr minimum wage were instituted in 1875, when per capita GDP was $1,000? >>The universal basic income. It doesn't make sense that people should be denied the freedom to offer to work for whatever wage they want until universal welfare is implemented.

empath75 9y ago
When are we going to let companies pay their employees Slave wages, you mean.
Anderkent 9y ago
It's not going to happen - we tried that before, and it didn't work. Remember the industrial revolution? Real good working conditions and pay in those factories, eh?
tom_mellior 9y ago
> What is it going to take to let people offer to work for whatever wage they want? The universal basic income.
londons_explore 9y ago
Interestingly, 'volunteers' get zero salary. The law as it stands allows an employer to pay zero, or >£7.50 per hour, but nothing in between. Lots of industries circumvent that by requiring 2/3 years experience to get a job. That experience can be as an unpaid volunteer. Now, over your career, you are forced to do 3 years unpaid, then the rest of your career paid, and guess what, on average you got under minimum wage. Live with your parents for the unpaid bit.

londons_explore 9y ago

I don't understand why Uber doesn't let drivers choose if they want to be employed or contractors? Those who choose employed would have strict working hours, performance requirements, etc. and if they miss any target even once would be fired. They would be free to reapply immediately with no penalty.

Cthulhu_ 9y ago
> I don't understand why Uber doesn't let drivers choose if they want to be employed or contractors? I do. Employees are a cost and a liability. They have to be paid weekly/monthly instead of per gig. They would have to be paid even when there's no rides. They have to be paid for if they end up sick, unable to work, on pregnancy leave. They need to have payments in their retirement fund. In the UK's case, they need to pay for the NHS. They need to buy them a car, and pay for upkeep, maintenance, damages and fuel. And they would fall under normal worker protection, so no, they wouldn't be fired if they missed any target even only once, there's procedures and legal requirements and such before formally firing someone. So it's completely in Uber's interests to only do contractors, no obligations or extra costs except for whenever they do a ride, and I'm fairly sure the compensation per ride is much lower than is necessary to operate a business. Where is the employee's benefits in this? Does Uber pay much more than they would earn working for a regular taxi company? I mean sure it's a job that people can do whenever they choose, but not doing it is a luxury. Assume most people need a 40 hour work week, or the income of one. Can't get that with Uber without working 80+ hours a week, and even then it depends on luck, supply, demand.
- doctor_fact 9y ago
  And employees have to be given paid holiday. And you have to pay them PAYE (so ~18% employer's side National Insurance Contributions). And if they're self-employed below the VAT threshold, they don't have to charge 20% VAT. Muuuuuuch cheaper.
- SilasX 9y ago
  Your answer implies that no one would ever higher an employee and would only use contractors. I don't think you've completely modeled the dynamics of the situation.

pimmen 9y ago

It’s interesting how Uber takes two very contradictory moral stands. ”We offer the ability for drivers to meet passengers, they should be glad they have this opportunity in the first place to make money.” ”The UK says that we have the ability to start a business, register a trademark and use the public infrastructure but they just don’t get that we’re way too cool and special for these ”labor law-thingies”. Doesn’t anyone care about how we feel about all of this?!”

setgree 9y ago

I personally don't care for the frame of "Uber vs drivers' 'rights'". I wold say that "Uber loses appeal against mandatory employment conditions" is more accurate, i.e. that employing drivers is now conditional on providing them paid holidays and such. FWIW paid holidays in particular make little sense for this kind of employment given that labor input is so variable.

chewbacha 9y ago

So, now the self-driving Uber is gonna come even sooner right? This is a huge financial incentive to ditch the driver altogether.

manigandham 9y ago

Another case of a small vocal minority creating unwanted regulation for the rest. Over several years and 1000s of rides in the US, 100% of the drivers I've asked liked being independent and did not want to be employees. Many of them already had other jobs or were students or retirees that liked making money on the side. For some reason, people keep forgetting that being a professional driver is easily available through Uber Black or any number of other transportation companies. Anyone who wants a full-time driving job can already get one. Rulings like these will end up hurting the vast majority of drivers who will now have to show up for full-time shifts at locations and times that Uber determines, while earning less money. Good luck to them.

steve_gh 9y ago
One issue is that in the UK, there is a tax called "National Insurance" or NI, which was originally intended to fund unempoyment benefits. As an employee, you have to pay a certain % of your wages. But the employer also has to pay a percentage of your salary, and they can't just deduct it from your wage. So, for Uber drivers on a minimum wage (£7.50 an hour), the 13.8% that Uber will pay will bump that up to approx £9 an hour that Uber has to pay. Then they will also require Employer's Liability Insurance (as the drivers are employees), will have to offer pension provision (legally required for all full-time employees in the UK), etc.
mrtksn 9y ago
Is it an absolute must to go to work everyday if you are formally employed? Isn't it possible have the same flexibility if you put it on your employment contract?
- manigandham 9y ago
  Of course FT employment comes with vacation and sick time, but why would you get the same flexibility? Uber is 100% in charge of determining where and when you work, and you get paid the same hourly/salary regardless of how much work there is, so they'll optimize for riders as much as possible. In the long run it might be better for Uber, more tightly controlled supply will mean cheaper and better rides while drivers make less. I can see surge pricing becoming pure profit when you can just order drivers to be at a certain place instead.