Uber Drivers Are Company Employees Not Self-Employed Contractors, Rules British Court (arstechnica.com)

A British court has ruled that Uber drivers have the same employment rights as other full-time employees in the country, which makes them entitled to a wide array of benefits. Ars Technica reports: The ruling (PDF) means that drivers are now entitled to earn the national minimum wage, holiday pay, sick pay, and other benefits, after the San Francisco-based taxi firm lost a case brought against them by two drivers backed by the GMB union. Uber had argued that it was a tech firm rather than a transport one, and that as its drivers were self-employed contractors it was not obliged to provide the kinds of statutory employment rights full-time workers would expect. According to the GMB, the Central London Employment Tribunal's decision will have ramifications in other industries which rely on casualized labor, and that "similar contracts masquerading as bogus self employment will all be reviewed." In the court's ruling, however, the judges insisted that "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. Drivers do not and cannot negotiate with passengers... They are offered and accept trips strictly on Uber's terms." The tribunal panel reserved hefty criticism for the firm, claiming that it had used "fictions," "twisted language," and "brand new terminology" to hoodwink drivers and passengers alike. The GMB meanwhile denied that the majority of Uber drivers enjoyed the "flexibility" of their current contracts.

Comments

Re:Ita about time!

[MouseR]

It's easier to fine one company for operating an illegal taxi system than it is, going against individual drivers.

Not just Uber.

[Narcocide]

Dishonest employers fooling employees into thinking they're contractors has actually long been a mainstay of the technical industry. Seriously. If you think you're a contractor and are rejecting my assertion here but you still have to report to an office at a specific time determined by your employer, you're a sucker.

Re:Not just Uber.

[Narcocide]

They're obviously not when their ignorance allows their employer to get away with egregious tax fraud at their own collective expense.

Re:Not just Uber.

[rtb61]

Well, 'er', yeah that's 100% correct. Just like we expect government to protect us from crap doctors or crap lawyers or crap teachers or crap dentists or crap pilots (I have the right to evaluate my own pilot, I don't need some stinking licence to tell me whether or not they can fly a plane properly https://www.google.com.au/sear..., same goes for licences plane mechanics, who needs them, I assume you rate them 0 out of 10 just before you hit the ground ;DDD).

Yes the government should go after employers who put their employees lives at risk, who do not pay them, who abuse their employees and that includes custodial sentences, fines and putting them out of business permanently.

Re:Not just Uber.

[mark-t]

Not any more than any other independent contractor that gets told in advance how much he'll make for the job. Uber drivers couldn't negotiate with passengers even if the drivers were independent contractors because the passengers would not be the drivers clients, Uber would be. An independent contractor can negotiate their rate of pay with the people who hire him at whatever agreed rate of pay, not with his boss's customers after his pay has already been agreed to.

Re:Not just Uber.

[MightyMartian]

Then they can lobby to get the laws changed. But until then they have no more right to ignore statute than does Uber.

Re:Not just Uber.

[silentcoder]

Ignorant? No. If they were ignorant - nobody would bring this case.
Desperate ? Yes.

And when you get people to sign a bad deal out of desperation - that's not a free market, that's the very definition of exploitation, and indeed the government SHOULD prevent that.
Do you know why ? Because if they don't prevent it for the desperate, then very soon every employer is doing it -and nobody else has a choice anymore. The market has a tendency to settle on the cheapest option - and if exploitation is allowed, then that is the cheapest option - and very soon, the only option. Choices in the market are not a guarantee - they only happen when the market is big enough that you can benefit from offering something more expensive that some people will want.

Re:Expected ruling from institutionalized employee

[Anonymous Coward]

How the hell is working FOR Uber entrepreneurship. Can you Grow your Business?
Can you Also deal with competing Companies?
Deal Direct with Customers? Other them other services?
No You work for Uber.

What They're Actually Saying...

[BlueStrat]

What they're actually saying is that UK citizens are not free to enter into individual contracts for labor or service, they may only be employees of a business/corporation. Apparently the leaders in the UK must not believe UK citizens are intelligent enough to avoid signing themselves into slavery or something.

Strat

Re:What They're Actually Saying...

[FlyingGuy]

No, what I believe they are saying is that if you work for a company, that collects the money, gives you your jobs, set standards for drivers, etc., then you are an employee of that company.
You can buy a car, advertise all over the place, have the correct insurance, and you are a one person company. It has been going on for a long time, its called "Car Service".

Re:What They're Actually Saying...

[whoever57]

The UK has effectively been this way for a while. The reason is that the total taxes paid with an employer/employee arrangement are greater than a contract arrangement would pay. Thus HM Revenue and Customs has been cracking down on "disguised emplyees" for decades, re-defining their employment arrangements as a traditional employment contract.

HMR&C also crack down on "fake intermediaries", where people set up their own company which employs them (and perhaps their spouse), while that company contracts with the original employer. However, I don't think the tax advantages of this are as great as they used to be.

Re:What They're Actually Saying...

[serviscope_minor]

*This* is the kind of discussion that should be occurring instead of an all out, scorched-Earth effort to ban services like Uber/Lyft. It's apparent there is a demand on both ends not being met, both passengers and drivers, for an alternative to traditional taxi/ride services. It needs to be addressed but those who profit from the status quo want it ignored and those who try to fill the demand punished.

Nope. We already have minicabs here: those are taxis which have few licensing requirements compared to taxis, but can't be hailed and can't use taxi ranks, etc. No one has banned uber, they fit exactly into the exising regulations just fine. There are and have been minicab setups ranging from individuals with a car up to large companies with a whole fleet and an app long before Uber arrived here.

Except that they're playing silly-buggers with an employment law specifically designed to stop companies playing silly-buggers. They're free to operate here, as long as they stick to the same laws as everyone else. What uber is being "punished" for is not providing for a demand, but doing it without sticking to the laws we have.

Re:Expected ruling from institutionalized employee

[magarity]

It's entrepreneurship because you get to decide when, where, and how much you work.

That is the definition of flexible work hours. The definition of entrepreneur is someone who establishes a business.

Re:Expected ruling from institutionalized employee

[FlyingGuy]

How the hell is working FOR Uber entrepreneurship.
Can you Grow your Business?
Can you Also deal with competing Companies?
Deal Direct with Customers? Offer them other services?
No You work for Uber.

You are making a false assumption.

Good luck fucking that chicken

[Uberbah]

What they're actually saying is that UK citizens are not free to enter into individual contracts for labor or service, they may only be employees of a business/corporation.

Nice straw man. What they're saying is that if a company is benefiting from workers as if they are employees....then they're employees and should be treated as such by the company. Not prey on people desperate to make next months rent, so they spend their free time driving for Uber....even if gas and maintenance costs push their annual earnings well below minimum wage.

Apparently the leaders in the UK must not believe UK citizens are intelligent enough to avoid signing themselves into slavery or something.

Nobody chooses to be a low paid serf, you Randian nutjob, any more than you've "chosen" not to be a billionaire.

Re:Good luck fucking that chicken

[SirSlud]

I chose not to be a billionaire because I didn't want to put in the kind of effort, dedication, and in these times, stoop as low as one needs to acquire such a fortune.

Bwhahahaha. That's incredibly cute.

Re:Good luck fucking that chicken

[serviscope_minor]

So if they are unable to find a regular job as an employee at government mandated minimum wage then they should not be allowed to earn *anything at all* then? When you're already desperate and starving anything is better than nothing.

Are there no prisons? ... And the Union workhouses... Are they still in operation?"

Why would they be desperate and starving? We have a thing called a social safety net here. If you can't find a job, you can go and sign up for jobseeker's allowance. The thing is we have a societal memory of the Victorian era. In many ways it was exactly like what you seem to want. People were free to sign up to whatever contracts they wanted, no matter how abusive, and people were free to starve. So we tried your way already and decided it wasn't very good.

It's very possible they could make more working a couple of these "abusive" self-employment gigs than they could working a minimum-wage job

Then do so. You're allowed to pay yourself less than the minimum wage, so start a company (or operate as a sole trader) and go nuts. What you can't do is employ other people under those conditions. Neither can you pretend your employees are actually contracting companies in order to escape those rules.

Why do you think you have any right to tell others how to make a living if the activity/product is not illegal?

The activity---of not paying people enough---is illegal. So that's a moot point. Not only that, it's legal for you to be paid less than the minimum wage, but it is illegal for them to do it. Only the employer is committing a crime. On legal matters, one must be precise.

I chose not to be a billionaire because I didn't want to put in the kind of effort, dedication, and in these times, stoop as low as one needs to acquire such a fortune.

Ha, no. Just because you are choosing not to pursue it, doesn't mean you could achieve it if you pursued it. There are more than enough a squeezing, wrenching, grasping, scraping, clutching, covetous, old sinners who have spent a lifetime trying to get that far and have not achieved it.

Re:Good luck fucking that chicken

[AmiMoJo]

Back in the 90s, before the minimum wage came in, you would see job adverts like "Security guard, £100/week, 100 hours, bring own dog". When someone took up that job it had two effects. Firstly the government had to keep paying them benefits, because £100/week isn't enough to pay rent or have both food and electricity at the same time, all while feeding the dog. Secondly that person was trapped, 100 hours/week leaving them little time to look for better jobs and if they quit their benefits would stop because they "voluntarily" gave up work.

On top of that, it's blatant exploitation of the individual.

So the government realized that it would be better to set some limits. A minimum wage, a maximum number of hours worked per week. Chances are the company simply paid what was required, since they needed a security guard no matter what. But even if they just replaced that person with a CCTV camera or two, at least the benefits that the government would have had to pay anyway were now enabling the ex-employee to spend time looking for a better job, improving their CV or getting more education and training. Just shoving people into dead-end, subsistence wage jobs was a false economy.

Re:Why is everyone against Uber?

[ZenShadow]

On its face, Uber is an end-run around laws restricting taxi companies (it may not have started that way, but it definitely is now). Uber's whole scheme is analogous to patenting something that's already been done before by adding the phrase "on the internet". They're using weasel words to do things they're not supposed to be able to do by law.

Whether you think the law is fair or not is a different issue.

Because I feel that the laws there are too restrictive, I'd normally not really care. But then they get petulant. Did you know that Austin doesn't have Uber service? Austin wants all ridesharing services to fingerprint their drivers (which I believe the taxi companies are already required to do). The voters voted, and the law passed. Uber's response?

They took their ball and went home.

I use Uber fairly regularly. I love the service. I think it was needed, and for that reason I give them a pass on the medallion laws or whatever; the taxi companies needed a kick in the ass, and many of those laws probably exist due to corruption. But I [i]do not[/i] think it's unreasonable to comply with requests from municipalities that go to the safety of passengers -- or, for that matter, mandates to treat their employees fairly.

And when they're so petulant that they'll pull out of a municipality instead of complying with the laws there, well... That just makes it clear that those whiners think they're special snowflakes, and have no qualms about punishing their customers in an attempt to obtain the special treatment they think they deserve.

Re:Expected ruling from institutionalized employee

[MightyMartian]

I can't speak to British law, but in many jurisdictions there are actually legal definitions of employment to prevent what Uber appears to be doing, namely hiring people but calling them independent contractors to evade labor laws. It isn't like this is the first time that a company has tried a contractor scam to get around minimum wage and other worker protections.

The IRS Test

[TuballoyThunder]

The IRS (which I assert is consistent with other tax authorities) has a series of tests that fall into three categories:

• Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
• Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
• Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

The questions (from Synergistech Communications, which also provides additional information), with the answers in bold based on my understanding of how Uber works:

1. Are you required to comply with instructions about when, where, and how the work is to be done? Yes
2. Does your client provide you with training to enable you to perform a job in a particular method or manner? No
3. Are the services you provide integrated into your client's business operation? Yes
4. Must the services be rendered by you personally? Yes
5. Do you have the capability to hire, supervise, or pay assistants to help you in performing the services under contract? Yes
6. Is the relationship between you and the person or company you perform services for a continuing relationship? No
7. Who sets the hours of work? The driver
8. Are you required to devote your full time to the person or company you perform services for? No
9. Is the work performed at the place of business of the potential employer? No
10. Who directs the order or sequence in which the work must be done? Uber
11. Are you required to provide regular written or oral reports to your client? No
12. What is the method of payment — hourly, commission or by the job? By the job
13. Are your business and/or traveling expenses reimbursed? No
14. Who furnishes tools and materials used in providing services? The driver and Uber
15. Do you have a significant investment in facilities used to perform services? It depends
16. Can you realize both a profit or a loss? Yes
17. Can you work for a number of firms at the same time? Yes
18. Do you make your services available to the general public? It depends
19. Are you subject to dismissal for reasons other than nonperformance of contract specifications? Unknown
20. Can you terminate your relationship without incurring a liability for failure to complete a job? Yes

By my count the Uber-Driver relationship does not pass 4 of the tests and two more are borderline. The key point that makes the relationship tip towards employee is that the driver has no direct price control (they cannot quote a price to perform the service).

Re:The IRS Test

[mark-t]

Actaully, Uber drivers can't negotiate the price with passengers because the passengers aren't actually the driver's clients, Uber is, and the passengers are Uber's customers, not the drivers, so driver has absolutely no authority to negotiate a different rate of pay with them. The driver can either accept the rate that Uber said they will pay... or not. Accepting what a client said they would pay does not make the contractor who agreed to work for that amount an employee.

There may be other reasons to consider Uber drivers employee's, but how the drivers are paid is definitely not one of them. If that, as you say, is really the tipping point, then Uber drivers would definitely be independent contractors.

Re:The IRS Test

[TuballoyThunder]

That is the exact point I was making. The driver has no ability to quote a price to Uber (the client) for the work they perform. From my understanding, not having the ability to quote a price is a major indicator (though not a 100% true rule) that you are an employee and not a contractor.

Re:The IRS Test

[Anonymous Coward]

As a contractor I quote to the client the price that I charge (keeping in mind market rates for CCIEs) and it is the customer that determines whether to accept or to counter-offer. The ability to counter-offer is important, as it indicates the negotiation part of the contract is indeed between the two parties.

In Uber's case, the real contract is between the customer and Uber, and the limited options of the Uber driver indicate that the relationship between Uber and the driver more or less works on Uber's terms. This is indicative of a employee-employer relationship.

Re:The IRS Test

[jittles]

Based on my understanding of how Uber driving works (both as someone who has tried it, and who has friends who have driven for Uber), some of your answers are definitely incorrect.

1. Do you have the capability to hire, supervise, or pay assistants to help you in performing the services under contract? Yes

The answer is no. You cannot hire someone to drive for you. In what way would an assistant provide any help to you when all you do is open a mobile app and wait for someone to request a ride from you that you must give personally? Any assistant you hired would be tangential to your relationship with Uber in that they might manage your bookkeeping from Uber.

Are you required to provide regular written or oral reports to your client? No

Uber drivers "make a report" after every single ride. They report that they picked the person up, dropped the person off, and rate the passenger. You can even see your passenger rating inside of the app. If you did something dangerous or unruly, this would be the time the Uber driver mentions it to Uber.

Can you work for a number of firms at the same time? Yes

Again I would not consider this to be significant. Can I have a job at Wendy's and McDonald's? Absolutely. But I can't work both at the same time. It's almost impossible to work for two ride sharing service at the exact same time - you'd end up declining rides and that would result in you getting kicked out of the service.

Are you subject to dismissal for reasons other than nonperformance of contract specifications? Unknown

The answer to this is yes. Uber treats you as an at-will employee in this regard. They can terminate your agreement at any time and for any reason.

Re:The IRS Test

[silentcoder]

If you aren't making a profit on the deal it makes you either an idiot or a slave.
If you are, then you're still an entrepenuer - provided it's a one-time deal for a one-time job. If it's a long-term open-ended contract - then yes, you are an employee.

In the 90s it was a good deal

[rsilvergun]

you didn't get benefits but you got a good chunk of the pay. A lot of young guys with no need for health insurance I knew loved it because it was free money. When you're 20 there's not a lot of risk.

When the outsourcing and H-1B abuse started it changed. The employers where no longer splitting the savings from the benefits, they pocketed them all. The H-1Bs worked 60-80 hour work weeks pushing wages down since companies could cut their IT staff by 50-75% thanks to the increased productivity. Wages were depressed in a classic race to the bottom.

But the old guard that remembered the good 'ole days of contracting can't seem to recognize that. Had a nice chap today arguing with me over the hours the Indians work even while we all see the emails coming from the guys at all hours of the day.

Re:In the 90s it was a good deal

[l0n3s0m3phr34k]

Sure it is! Just keep slipping adderall into your Indian "employees" coffee / tea. Keep it up until the have a heart attack, replace them, and repeat. PROFIT! No one will ever catch you, because since their foreigners they won't ever go to the hospital, seek out any medical attention, or even have an autopsy done.

Re:Why is everyone against Uber?

[jbn-o]

No, not everyone "enjoys and uses" these services particularly because that lower rate you refer to comes at the cost of a profound dishonesty, as the legal case points out. Another aspect of this dishonest accounting, I suspect, is in the form of car insurance as I've pointed out in another recent post. Low prices at the cost of exploitation is no bargain, it's hiding the real cost of providing the good or service.

Re:Expected ruling from institutionalized employee

[silentcoder]

If it's a real business, you can provide that service to more than one company.

I'm pretty sure both lyft and uber prohibit people from driving for both.

Even then, you're missing the key definition of entrepeneurship: establishing a business for proft. Uber drivers do not get to keep the profits, those go to Uber, they get a cut - which makes them employees, not owners.

Re:Why is everyone against Uber?

[Ash-Fox]

I don't understand why drivers expect to get all these benefits for working part time

In the UK, companies are required to provide certain things to employees, part time or not. The issue here is the organisation is supposed to be employing these people as employees and not "self employed contractors", likely brought about with the similarity to how these are like zero-hour contracts.

they signed on to work for them

Just like someone employed under a zero-hour contract, however that doesn't mean the company is not responsible for them as an employee still.

they can get another job if they don't like the situation

And they can take the organisation to court if they don't believe it's following proper employment practices.

or they just expect that because it's a big company they should get more?

Small companies don't really make their employees declare that they're self employed contractors.

I think this is more political, and the lobbyists are not getting their kickbacks like they do from local taxi companies.

"Kickbacks" are illegal for politicans in the UK thanks to the Bribery act. If you have evidence of this, I would suggest you publish it so the British government and public can address it.

Re:Why is everyone against Uber?

[Oxygen99]

Quite right. The only thing these companies disrupt is 200 years of hard fought employment protections. If you use their services you're enabling that and your job is next on the line.

Re: Ita about time!

[Chrisq]

And nothing of value was lost...

In fact something of value would be gained, the principle that you can't circumvent laws on hours, holiday pay, maternity pay, redundancy pay simply by saying that someone is a self-employed contractor. It doesn't matter whether Uber stay or go

Uber is going down

[plopez]

It's bleeding cash so look to them to become more desperate as time goes on. Their model does not work. See Bloomberg: https://www.bloomberg.com/news...