Uber was handed a blow in London on Friday, after the Supreme Court ruled that its drivers should be classified as workers, upholding their rights to work benefits such as holiday pay, minimum wage and health insurance. Business Insider broke the news.
This is coming about three months after the ride-hailing app won the Prop. 22 ballot to trump the state of California’s new labor law that mandated it to declassify drivers as independent contractors.
The legal tussle, which started in 2016, after two Uber drivers, Yaseen Aslam and James Farrar, who were later joined by 22 others, filed a lawsuit against Uber for denying its drivers basic work rights. The trial court had ruled in their favor in 2017 but Uber appealed the ruling.
Uber has been fighting to define itself as a tech platform serving only as an intermediary between drivers and riders, which should not be seen as an employer of labor. In its home market California, Uber had argued that counting drivers as employees will significantly affect riding cost, as the state’s AB-5 means that drivers will be paid minimum wage.
The prop.22 ballot which took place Nov. 3, allowed people to decide if they want Uber to continue with the gig economy through vote, since the court had earlier ruled against the taxi app.
In London, the story turned sour after Uber’s several attempts to get a favorable ruling.
“I understand the implication of how important today’s ruling is for millions of precarious workers” Yassen Aslam, co-lead claimant and App Drivers & Couriers Union President, told Insider after the ruling.
“These companies, like Uber, rely on vulnerable people they could exploit who don’t understand the law or they don’t know how to assert their rights,” he said, adding that the government also has to take responsibility on this abuse of rights.
Farrar, co-lead claimant and App drivers & Couriers Union General Secretary said the ruling will “re-order the gig-economy and bring an end to rife exploitation of workers.”
“Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom. The reality has been illegally low pay, dangerously long hours and intense digital surveillance,” he said.
Last year, Uber won a legal battle to restore its operating license in London. A judge ruled the California-based company is a fit and proper operator and should be allowed to operate in the UK capital. The ride-sharing company’s license was taken away in 2019 over “historical failings” that involved gross misconduct and breaking of the rules.
Friday’s judgment means London Uber drivers will henceforth be entitled to employment benefits. Insider quoted Daniel Barnet, an employment lawyer at Outer Temple Chambers, as saying in a bulletin after the ruling: “Uber drivers are entitled to claim minimum wage [including backpay for minimum wage], with their minimum wage claims being based upon their entire working day, not just when they had a rider in their cabs.”
He added that they can claim up to two years backpay and 5.6 weeks annual leave each year, including whistleblowing and other rights.
Jamie Heywood, Uber’s regional general manager for northern and eastern Europe said Uber respects the court’s decision.
“We respect the Court’s decision which focused on a small number of drivers who used the Uber app in 2016,” he said.
“Since then, we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.” He added.
The 25 drivers who brought the case against Uber will have to go back to tribunal, where it will be determined how much they will be awarded in damages.
However, the ruling has set a dangerous trajectory that will not harm only Uber’s business, but the gig economy in Europe, if other European nations decide to follow it.
London is one of Uber’s largest markets, its shares fell as much as 2% on Friday following the ruling.