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British Employment Appeals Tribunal Finds Uber Drivers are Employees of Uber

November 10, 2017

A British Tribunal has upheld the decision finding that Uber drivers are “workers” (i.e.  employees) and not independent contractors and therefore are entitled to minimum wage and coverage under a variety of employment protection statutes.

Here is the decision.

The drivers argued that while they are under no obligation to turn on the Uber App,

Are Uber drivers "employees"?

Are Uber drivers “employees”?

once they do so, they are subject to a litany of rules and control at the hands of Uber such that they meet the definition of a “worker” as defined in the case law.  Uber argued that is a technology company that simply offers an App and that it is not in the business of transportation.

What’s Old is New?

I was struck in reading the British decision at how similar the issues are to a case I argued way back in 1998 when I was a lawyer representing the United Steelworkers and its taxi arm.  I represented a taxi driver who had his throat slit by a passenger and had claimed workers’ compensation benefits.  The legal issue was whether a taxi driver operating under the banner of Blue Line Taxi (in Ottawa) was a “worker” for the purposes of the workers’ compensation legislation.  Here is the decision of the WSIAT in that case.  

We won the case.  The Tribunal ruled that Blue Line Taxi, the dispatch service, maintained sufficient control over the driver while he was driving his cab to render him a “worker” employed by Blue Line.  In particular, Blue Line enforced a variety of rules, including rules about the type, quality, and appearance of the cars, accepting and refusing fares, treatment of passengers, and dress code, and drivers could be effectively disciplined for violating rules by being suspended from the dispatch service.  Blue Line, like Uber, argued that it was merely a dispatch service, an technological intermediary between taxi drivers and the passenger, and that drivers that owned and maintained their own cars and licences were self-employed.

My point is that while there is a lot of discussion about “new forms of work” and the emergence of the “gig” or “sharing” economy, in fact many of the legal issues that arise from the “sharing economy” are not new.   There may be more workers engaged in this form of work than in the past, which has focused attention on the need to resist how we regulate work, but the legal issues are not particularly novel in most cases.

The relevant facts in the British Uber case included the following:

The Uber driver contract clearly stated that the drivers are independent contractors, but as in Canada, this was not determinative.  Tribunals and courts in both countries look beyond the words in the contract to examine the true nature of the relationship.  Does the worker more closely resemble an entrepreneur in business for themselves or an employee dependent on the alleged employer for their livelihood?

Uber drivers have their own Uber account and they cannot use substitute drivers or share their Uber accounts with other drivers.  Drivers are subject to a list of Uber rules, including rules about behaviour during and after the drive (must be polite and professional, zero tolerance for discrimination, no contacting rider after the ride, etc).   Violating Uber’s rules is considered “a breach” of the driver’s licence conditions.   Uber drivers cannot give passengers their own business cards as this is a violation of the Uber contract and therefore they cannot build their own business in this way.  The customer’s are Uber customers, not the drivers.

Drivers pay their own expenses, although Uber dictates requirements about the year, models, and colour of the cars.  Uber fixes the rate of the fare and discourages drivers from taking tips.  Drivers who reject multiple trips can be sent to the “penalty box”, meaning that they are logged off the Uber app for a period of time and won’t receive fare requests.   A driver who fails to accept 80% of trips can lose their Uber status. Drivers whose ratings fall below a specified level are effectively terminated, meaning that they are kicked off the Uber app.  Drivers are paid directly by Uber on a weekly basis based on the amount of fares they generated after a deducted service charge to Uber of about 20-25%.

The original Employment Tribunal ruled that Uber was in fact the employer of the drivers while the drivers were logged onto the Uber app and willing and available to take rides assigned by Uber.  Uber appealed.

The Appeal Decision

The Appeal Tribunal ruled in the workers’ favour, finding them to be “workers” for the purposes of employment regulation.  Their work hours consist of that time when they are in the territory in which they agreed to work and their Uber app is turned on and they are ready and willing to accept trips.  Once signed on, the drivers are subject to extensive control by Uber.

Uber argued that many of the “rules” that govern the drivers are simply regulatory requirements that apply to cars for hire in England.   The Appeal Tribunal ruled that an employment tribunal that the source of rules is relevant but need not be disregarded in the calculus of determining the extent to which a person is operating as a business as opposed to an employee.   Moreover, many of the rules drivers were subject to were imposed by Uber and not regulatory requirements.

The implications of Uber being found to be the employer of Uber drivers is significant.   It means that the regulatory standards applicable to employees apply to the drivers, creating new legal obligations on Uber.   No doubt Uber will continue up the appeal ladder.   Similar cases are going forward around the world, including Canada.  Earlier this year a class action lawsuit was filed in Ontario on behalf of Uber drivers claiming that the drivers are employees for the purposes of the Employment Standards Act.  We will keep on eye on that case.

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