Uber drivers are employees not contractors, court rules

A court has ruled that Uber drivers in the UK should be counted as employees of the company rather than contractors, meaning they must get the same benefits including holiday pay.

Additionally, the court said drivers must receive the national living wage rather than lower rates of pay as they currently do, because their wages are based upon the number of trips they make and customers they serve. They are currently paid commission on the income, rather than a salary.

Following the news, experts predict the company could receive claims from its 40,000 drivers working in the UK, arguing that they’re owed employee benefits and the company should start offering other extras such as pension schemes.

Uber has consistently argued it’s a technology firm, not a transport company, and that its drivers are self-employed contractors who have the benefits of choosing when and where they work, rather than employees who must work from the office at set hours.

“The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous,” the judges said. “Drivers do not and cannot negotiate with passengers… They are offered and accept trips strictly on Uber’s terms.”

The Citizens Advice Bureau carried out research around the contracting industry that revealed many workers in industries outside of the on-demand economy could be falsely classified as self-employed, which means the government is losing £314 million per year in lost tax and employer National Insurance contributions.

“We are pleased that the employment tribunal has agreed with our arguments that drivers are entitled to the most basic workers’ rights, including to be paid the [national living wage] and to receive paid holiday, which were previously denied to them,” Nigel Mackay from the employment team at law firm Leigh Day, which represented the drivers, said in a statement.

“This is a groundbreaking decision. It will impact not just on the thousands of Uber drivers working in this country, but on all workers in the so-called gig economy whose employers wrongly classify them as self-employed and deny them the rights to which they are entitled.”

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