Uber's app means drivers are workers, says Supreme Court

Supreme Court distinguishes Uber service from other booking apps and upheld the employment tribunal decision that Uber drivers are workers.

The Supreme Court has dismissed Uber’s appeal in Uber BV and others (Appellants) v Aslam and others (Respondents) [2021] UKSC 5.

The key issue in the appeal was whether the employment tribunal correctly decided that drivers whose work is arranged through Uber’s smartphone application work for Uber under workers’ contracts and so qualify for the national minimum wage, paid annual leave and other workers’ rights. Uber argued that the drivers do not have these rights because they work for themselves as independent contractors, performing services under contracts made with passengers through Uber as their booking agent. 

Uber argued that when a booking through the Uber app is accepted, a contract is created between passenger and driver, to which no Uber entity is a party and under which the driver is solely responsible for providing transportation services to the passenger. Uber also said that its entities’ only roles are to provide technology services and to act as a payment collection agent for the driver as well as to act as a booking agent for drivers.

If drivers work for Uber under workers’ contracts, a secondary question arose about whether the employment tribunal was correct to hold that the drivers were working under such contracts whenever they were logged into the Uber app within the territory in which they were licensed to operate and ready and willing to accept trips; or whether, as Uber argued, they were working only when driving passengers to their destinations.

The Supreme Court ruled that Uber drivers were workers and that they were working whenever they were logged onto the Uber app.

The Uber drivers were workers

The court upheld the findings of the employment tribunal that although free to choose when and where they worked, at times when they are working drivers work for and under contracts with Uber. It emphasised five aspects of the tribunal’s findings:

  • The remuneration paid to drivers for the work they do is fixed by Uber and the drivers have no say in it (other than by choosing when and how much to work). They may not charge more than the fare calculated by the app. Uber also fixes the amount of its own service fee. Uber has the right to decide in its sole discretion whether to make a full or partial refund of the fare to a passenger if a passenger complains about the service provided by the driver.
  • The contractual terms on which drivers perform their services are dictated by Uber. Not only are drivers required to accept Uber’s standard form of written agreement but the terms on which they transport passengers are also imposed by Uber and drivers have no say in them.
  • Although drivers have the freedom to choose when and where (within the area covered by their licence) to work, once a driver has logged onto the Uber app, a driver’s choice about whether to accept requests for rides is constrained and Uber retains an absolute discretion to accept or decline any request for a ride. Furthermore, when a ride is offered to a driver through the app, Uber controls the information given to the driver. The driver is not told the destination until they collect the passenger. Uber also monitors the driver’s rate of acceptance (and cancellation) of trip requests, which places drivers in a position of subordination to Uber. 
  • Uber exercises a significant degree of control over the way in which drivers deliver their services for example by vetting the types of cars used. In addition, the technology which is integral to the service is wholly owned and controlled by Uber and is used to exercise control over drivers, including the route taken. Another way of control is the rating system where passengers are asked to rate drivers. It is commonplace for consumers to rate products on digital platforms, but the ratings are usually made available to consumers. In contrast, Uber uses the ratings purely as an internal tool for managing performance and as a basis for making termination decisions where customer feedback shows that drivers are not meeting the performance levels set by Uber. The courts said that this is a classic form of subordination that is characteristic of employment relationships.
  • Uber restricts communication between passenger and driver to the minimum necessary to perform the particular trip and takes active steps to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride. 

Taking these factors together, the service provided through the app is very tightly defined and controlled by Uber. Further, it is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill. From the drivers’ point of view, the same factors mean that they have little or no ability to improve their economic position through professional or entrepreneurial skill. In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.

Some aspects of the way in which Uber operates its business are required to comply with the regulatory regime, and the court said this tends to show that an arrangement whereby drivers contract directly with passengers and Uber London acts solely as an agent is not one that is legally available.

Booking agent

The court also compared Uber’s operation with digital platforms that operate as booking agents for suppliers of, for example, hotel or other accommodation, but said there were significant differences.  Notably, the accommodation offered is not a standardised product defined by the platform. Customers are offered a choice and suppliers are also responsible for defining and delivering their service. Apart from the service fee, it is, crucially, the supplier and not the platform which sets the price. The platform may operate a ratings system but the ratings are published to help consumer choice, they are not used as a system of internal performance measurement and control by the platform over suppliers. Nor does the platform restrict communication between the supplier and the customer or seek to prevent them from dealing directly with each other on a future occasion. The result of these features is that suppliers of accommodation available for booking through the platform are in competition with each other to attract business through the price and quality of the service they supply. The court said that they are properly regarded as carrying on businesses which are independent of the platform and as performing their services for the customers who purchase those services and not for the platform.  

Minicab companies

The court also rejected Uber’s argument that it was analogous to other minicab companies, saying that the arrangements were significantly different from Uber’s business model.

Working time

The Supreme Court also held that on the facts, the employment tribunal was entitled to find that time spent by the claimants working for Uber was not limited (as Uber argued) to periods when they were actually driving passengers to their destinations, but included any period when the driver was logged into the Uber app within the territory in which the driver was licensed to operate and was ready and willing to accept trips.

Published: 2021-02-22T16:00:00

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