Uber will have to provide its drivers with basic employment rights such as the minimum wage after losing a “landmark” employment case.
In a legal case brought about by the GMB trade union and its 700,000-strong membership, the London Employment Tribunal declared Uber had acted unlawfully by not providing basic workers’ rights such as holiday pay, minimum wage and entitlement to breaks.
The London Employment Tribunal ruled that Uber will now have to treat drivers as workers. Uber has always argued they are self-employed, allowing it to dodge the associated costs and undercut taxi fares.
The GMB trade union brought two Uber drivers into the tribunal, one called James Farrar. Farrar discovered working exclusively for Uber paid him an average of £5.03 after costs and fees – well below the current minimum wage of £7.20 and below the £6.70 at the time.
GMB said Uber had also unlawfully deducted sums from the pay of its drivers ‘often without informing the drivers in advance, including when customers make complaints’. The ruling could affect more than 30,000 drivers in London and across England and Wales.
Legal director for the GMB, Maria Ludkin, said: “This is a monumental victory that will have a hugely positive impact on over 30,000 drivers in London and across England and Wales and for thousands more in other industries where bogus self-employment is rife.
“The question for them now is how those rights are enforced in practice. The clear answer is that the workforce must combine into the GMB union to force the company to recognise these rights and to negotiate fair terms and conditions for the drivers.”
Drivers are not the only benefactors. Ludkin continued: “This outcome will be good for passengers too. Properly rewarded drivers are the same side of the coin as drivers who are properly licensed and driving well maintained and insured vehicles.”
Ludkin is referring to the issue of Uber drivers and their vehicles undergoing what has been criticised as a less strict vetting approach that has resulted in some horror safety stories (although taxis have had their fair share, too).
The GMB said it now plans to “give evidence to the new Taylor review on terms and conditions within the sectors of the economy offering precarious employment, and that it “will make the case that average hours worked over the past 12 weeks should be deemed to be the contracted hours of work for those on zero hours as it already is for maximum hours of work under the Working Time Directive”.
Uber – valued at US$62.5billion (£52.5billion) – quickly found favour with punters because of its convenient app, which allows punters to easily hail a ride from the comfort of a smartphone. The UK is home to more than 40,000 Uber drivers.
In September 2016, the ride-sharing company said drivers were earning around £16 an hour and that only 25 per cent of all drivers clocked up more than 40 hours per week. 20 per cent only clocked 10 hours or less of driving a week.
Leigh Day employment lawyer Nigel Mackay was pleased with the outcome, which could have ramifications for the UK’s so-called ‘gig’ economy:
“This judgment acknowledges the central contribution that Uber’s drivers have made to Uber’s success by confirming that its drivers are not self-employed but that they work for Uber as part of the company’s business.
“Uber drivers often work very long hours just to earn enough to cover their basic living costs. It is the work carried out by these drivers that has allowed Uber to become the multi-billion-dollar global corporation it is.” Uber is yet to comment on the ruling.
With Uber facing the possibility of increased costs in the UK, it will have to make up the difference somewhere and that somewhere is likely to be passengers paying increased fares. Permanent surcharge, anyone?