Uber’s Tribunal Travails – What does it all mean?

Posted on Oct 31st, 2016 | News and opinion

Uber’s Tribunal Travails - What does it all mean?, image of Uber sticker on car

Last week’s long awaited employment tribunal ruling on the status of some Uber drivers in London has set many tongues wagging. Is this the end of the gig economy? No. Will it hurt Uber? Maybe. Is this good news for the self-employed? Yes, I think so.

First, let’s be very clear about what has happened: Nineteen Uber drivers have won their claim to be recognised as workers rather than as being self-employed. This entitles them to certain employment protections, auto enrollment pensions and being paid the minimum wage. This ruling does not set any precedent and it is being appealed. Estimates are that it could take at least a year for appeals to be exhausted.

So while this doesn’t change the legal status for all drivers, the very detailed and emphatic ruling does set the scene for other Uber drivers, and indeed workers in similar settings for other firms, to feel emboldened to take their own employment status to tribunal. I suspect a number of ‘no win, no fee’ firms will be right now preparing their marketing campaigns to recruit new clients to take to tribunal on the back of this result.

Does this ruling mark the end of the gig or platform economy as some are suggesting?

No, not at all. There have been some very silly and erroneous claims made in the immediate aftermath of the ruling which are best ignored. The simple facts are that in the specific case of Uber the company has such a high level of control and direction over their drivers that it was almost inevitable that it would be challenged.

There are many alternative models which provide far more freedom for participants to choose their clients, pay rates and more to avoid falling into employment status. Indeed there are now startups rivalling Uber by seeking to give drivers more freedom. So while the specific model Uber pursued has been challenged, the overall concept of app-based platforms has not.

Will this hurt Uber?

Maybe, as if they choose to maintain their current practices they will face higher costs. They could choose to absorb these costs, pass them on to customers or simply change their practices so that drivers are legitimately working as self-employed ‘free agents’ plying their trade. No matter what choices they make, Uber’s position as a dominant online taxi service in London and with 40,000 drivers in the UK remains throughout this debate.

Is this tribunal finding good news for the self-employed?

Yes I think so. It sets clear boundaries on what being self-employed means: Having the freedom to choose when and where you work, as well as having a say over who your clients are. These are the fundamentals of working for yourself. If an online platform is trying to control someone to the extent that they can’t choose those things, and have to work under the platform’s brand at all times, then that, the tribunal has decided, really isn’t self-employment.

If a company wants that level of control over its workers then it needs to be willing to take responsibility for them the way any other employer does.

Not everyone wants to be an employee, and not everyone wants to be self-employed. That’s fine, but being clear on which is which is vital to a fair business landscape where we can all make choices as workers and consumers. The gig economy is here to stay, but let’s hope this decision is the start of ensuring greater fairness and clarity comes along with it.

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Written by Jason Kitcat

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