In a recent judgment by the UK Supreme Court, it has been decided that Uber drivers are workers and not self-employed contractors providing transport services. The ruling was preceded by hearings before the Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeals, all of which ruled against Uber.
In determining whether Uber drivers are workers, the Court took into consideration the following factors: (1) Uber set the fare which meant that they dictated how much drivers could earn (2) Uber set the contract terms and drivers had no say in them (3) Request for rides is constrained by Uber who can penalise drivers if they reject too many rides (4) Uber monitors a driver's service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve. These factors led to the conclusion that Uber drivers were indeed in a position of subordination to Uber and had to work longer hours to ensure better wage.
The judgment has significant legal implications and will entitle the drivers to benefits under the applicable employment laws. The court ruled that Uber should treat the drivers as employees from the moment they sign into the app till the moment they log out. The UK Supreme Court's judgment sets a precedent that deserves paramount importance as ride-sharing apps and courier and delivery service apps commonly referred to as 'gig economy' gain popularity across the world.
The judgment also bears significance in relation to Uber's responsibility of paying VAT on fares. Although Uber had maintained that it is a booking agent which hires self-employed contractors that provide transport and is not a transport provider. In the context of the recent judgment, Uber anticipated that it would have to pay VAT as a transport provider and also incur significant additional expenses in paying the drivers for compensation and other benefits.
Compiled by Law Desk (Source: www.bbc.com).