UK Supreme Court : Uber Drivers are Employees / Workers

New ways of working organised through digital platforms present pertinent issues regarding the employment status of such persons involved in the work.  Last week, the UK Supreme Court delivered its judgment of UBER BV and others (Appellants) v Aslam and others (Respondent) [2021] UKSC 5. In this case which emanated from the Employment Claims Tribunal, drivers who were using the Uber app, brought claims against Uber for minimum wages and other employment benefits. 

The following issues were explored in the case:

(a) whether an employment tribunal was entitled to find that drivers whose work is arranged through the Uber App qualify for national minimum wage, paid annual leave and other worker rights, or whether they do not have such rights because they are independent contractors; and

(the “First Issue”)

(b) if the drivers are Uber workers, whether the employment tribunal was also entitled to find that the drivers were working under such worker contracts whenever they 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 argues, they were working only when driving passengers to their destinations.

(the “Second Issue”)

At the time of the employment tribunal hearing in 2016, there were about 30,000 Uber drivers operating in London, and 40,000 in the UK as a whole. Additionally, Uber had two million registered passengers using the Uber app in London.

THE COURT’S DECISION

At the outset of the analysis it is important to note that the rights claimed by the drivers (i.e. minimum wage, paid annual leave and other worker rights) are provided for in legislation on “workers”. 

The term “worker” is defined by section 230(3) of the Employment Rights Act 1996 to mean:

“an individual who has entered into or works under (or where the employment has ceased, worked under) – 

(a) a contract of employment, or

(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker’s contract shall be construed accordingly.”

At first instance, the employment tribunal decided that the drivers were “workers” (even though they were not employed under employment contracts), as they worked for Uber London under “workers’ contracts”, within the meaning of limb (b) (quoted above). 

Uber’s appeal against this finding at the Employment Appeal Tribunal and the Court of Appeal were dismissed. Dissatisfied with the lower courts’ decision, Uber has now filed the appeal with the UK Supreme Court.

The First Issue: Whether the drivers were entitled to qualify for national minimum wage, paid annual leave and other worker benefits

The Court considered the following factors in arriving at its decision that the drivers were employees / workers entitled to worker rights:-

(a) First, the remuneration paid to drivers for the work they do is fixed by Uber and the drivers have no control and/or say in it (apart from choosing when and how much to work).

Typically, fares for private hire vehicles are not determined by the regulator. However, in Uber’s case, Uber sets the fares and the drivers are not permitted to charge more than the fare calculated by the Uber app.

Additionally, Uber also sets the “service fee” payable to the drivers, which is deducted from the fares paid by the passengers to the drivers. It exerts further control over drivers’ remuneration in determining whether to make full or partial refund of the fares whenever there are complaints from passengers regarding their services.

(b) Second, Uber prescribes the contractual terms on which drivers render their services. Apart from having to accept Uber’s standard form agreements, Uber drivers are also forced to accept Uber’s terms on which they transport passengers.

(c) Third, while it is true that the drivers may decide where and the timings to work at, once a driver has logged onto the Uber app, Uber exercises control over the driver’s acceptance of the request in two ways.

For one, Uber controls the information provided to the driver – it does not disclose the passenger’s destination and the driver therefore cannot decline a booking on the basis that he/she does not wish to travel to that location.

In addition, Uber exercises control by monitoring the driver’s frequency of acceptance and/or cancellation of trip requests. If the driver’s cancellation rate exceeds a certain set level, the driver may be automatically logged off the Uber app, and shut out from logging back in. This has the effect of imposing a financial penalty on the driver, and in so doing, places drivers in a position of subordination to Uber. 

Notably, Uber’s above practices contrast with taxi drivers who are not obliged to accept any requests.

(d) Fourth, Uber exerts control over the standard of services rendered by the drivers. 

This is illustrated in the following instances:-

(i) vetting of the types of car(s) the drivers use;

(ii) complete ownership of the technology used, which technology is integral to the driver’s performance of the said services;

(iii) monitoring of drivers’ acceptance and/or cancellation rates which may have financial implications on the driver’s earnings (see point (c) above);

(iv) rating systems by the passengers, which Uber uses as an internal tool for managing drivers’ performance and a basis for termination decisions

(e) Fifth, Uber limits communication between the driver and passenger, to the bare minimum necessary for the transportation of the passenger.

Parties are barred from learning the other’s contact details, as the payment of fares, complaints etc are all handled by Uber. The only instance in which a passenger’s contact details are exchanged, is where the driver needs to return lost property to the passenger.

The above factors seen collectively, show that Uber exercises a substantial amount of control over the drivers and how they perform their services, which is characteristic of an employment relationship, entitling the workers to employment benefits under the law.

The Supreme Court further noted that due to Uber’s tight control exercised, the drivers have little or no ability to improve their economic position through professional or entrepreneurial skill. Practically speaking, the may only increase their take-home earnings through working longer hours, and accepting more trip requests, both of which go towards bolstering Uber’s profit margins.

The Second Issue: Whether the drivers were “working” under such worker contracts whenever they logged into the Uber app, and ready and willing to accept trips

Having determined that the drivers were “workers” who worked for Uber under “worker’s contracts” within the statutory definition, the next question which arises is – during what periods of time were the drivers working?

“Working time” is defined in regulation 2(1) of the Working Time Regulations 1998 to mean, “any period during which he is working, at his employer’s disposal and carrying out his activity or duties.” 

Based on the evidence adduced at the employment tribunal, the Supreme Court found that the drivers were at Uber’s disposal the moment they logged into the Uber app and were ready and willing to accept trips. Any assertions that the drivers could have been working for other apps operated by Ubers’ competitors, while simultaneously being logged onto the Uber app could not be sustained, as this was not borne out by the evidence.

Accordingly, the Supreme Court found that the drivers were working for Uber the moment they logged into the Uber app and were ready and willing to accept trips.