Uber has lost its appeal, as the EAT rule that Uber drivers are workers in a decision that was handed down on Friday 10th November 2017. Although Uber plan to appeal the decision, the ruling will have major ramifications for the gig economy.

Aslam and others v Uber BV and others (2016)

At first instance, on the 28th October 2016, the Employment Tribunal held in the case of Aslam and Farrar and others v Uber BV, Uber London Ltd and Uber Britannia Ltd (2016) that Uber drivers are workers under the definition set out in the Employment Rights Act 1996. Employment Judge A M Snelson was highly critical of Ubers arguments, famously dismissing them with the following line from Hamlet, Act III, Scene 2: “the lady doth protest too much, methinks”. He added that “the notion that Uber is a mosaic of 30,000 small businesses linked by a common platform is faintly ridiculous,” and ruled that Uber drivers came within the definition of workers because:-

No leads were provided, and there was no scope for a driver to develop their own business

The drivers were remunerated for making themselves available and transporting Uber customers, pursuant to a contractual reloationship

Drivers were interviewed and recruited by Uber

Whilst drivers provided their own vehicle, Uber were selective on which types of vehicles they would allow their drivers to use

Drivers went through an induction process and provided with training

Drivers were subjected to controls through the Uber app, including providing the precise route that had to be followed to the designated destination, with drivers subjected to punishment should the passenger complain about any deviation from the route.

Should 3 jobs be rejected by a driver in a row, then they would be denied access to the app for 10 minutes. Moreover, drivers were subject to performance management procedures, as should a drivers rating fall below 4.4, then they could be subject to a ‘quality intervention’, and ultimately their account could be deactivated

Cancellation procedures had to be followed

Employment Judge Snelson held that for the most part, the contract consisted of many of the elements that one would find in a typical employment contract, and that those elements had simply been relabelled with Uber “resorting in its documentation to fictions, twisted language and even brand new terminology”. He concluded that the contractual documentation “bears no relation to reality [and is not] a contract at arm’s length between two independent business undertakings.”

Hence, Uber appealed to the EAT.

EAT Rule That Uber Drivers Are Workers

On the 10th November 2017, the EAT handed down its judgment in Uber BV and others v Aslam and others (2017). It upheld the decision at first instance that the Uber drivers are workers. In making her ruling, Her Honour Judge Eady QC stated that: “I do not see any difficulty with the characterisation of the Uber driver’s time as “working time” when a trip offer from ULL is accepted. The assessment of the driver’s status and time in between the acceptance of individual trips will, however, be a matter of fact and degree. On the ET’s findings of fact in this case, I do not consider it was wrong to hold that a driver would be a worker engaged on working time when in the territory, with the app switched on, and ready and willing to accept trips (“on-duty”, to use Uber’s short-hand). If the reality is that Uber’s market share in London is such that its drivers are, in practical terms, unable to hold themselves out as available to any other PHV operator, then, as a matter of fact, they are working at ULL’s disposal as part of the pool of drivers it requires to be available within the territory at any one time.“

The Wider Ramifications Of The EAT Judgment

As workers, the Uber drivers are entitled to be paid holiday pay, the national minimum wage/national living wage, and other benefits that workers are entitled to, but which they were not receiving, given that Uber deemed them to be self-employed. Nevertheless, Uber have stated that they will appeal the decision of the EAT. It may even bypass the Court of Appeal altogether by adding itself to the appeal that is due to be heard in 2018 by the Supreme Court that was launched by CitySprint and Pimlico Plumbers. However, the legal battle could be potentially eclipsed by any changes that the Government may make to employment law following the Taylor Review.

Ubers defeat in the EAT follows similar outcomes not only for CitySprint and Pimlico Plumbers, but also for several other firms such as Addison Lee.

Reaction To The EAT Judgment

The case against Uber was backed by the trade union, the Independent Workers Union of Great Britain (IWGB). IWGB General Secretary, Dr Jason Moyer-Lee, stated: “Today’s victory is further proof, as if any more was needed, that the law is clear and these companies are simply choosing to deprive workers of their rights. These companies are making a mockery of supposed employment rights. The government needs to properly enforce the law and they need to do it now.” Frances O’Grady, the General Secretary of the TUC, added: “Uber should throw in the towel and accept today’s judgement. No company, however big or well connected, is above the law. Uber must play by the rules and stop denying its drivers basic rights at work. This ruling should put gig economy employers on notice. Unions will expose nasty schemes that try and cheat workers out of the minimum wage and holiday pay. Sham self-employment exploits people and scams the taxman.“

As the EAT rule that Uber drivers are workers, in response, Uber UK’s acting general manager, Tom Elvidge, stated: “Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed. The tribunal relies on the assertion that drivers are required to take 80% of trips sent to them when logged into the app. As drivers who use Uber know, this has never been the case in the UK. Over the last year we have made a number of changes to our app to give drivers even more control. We’ve also invested in things like access to illness and injury cover and we’ll keep introducing changes to make driving with Uber even better.“