Summary
Uber, the taxi-hailing app operating in London and 300 other global cities, is facing legal action in the UK over the treatment of its drivers, the latest in a series of legal challenges against the firm.
The legal challenge is being brought by the GMB union on behalf of the minicab drivers over allegations that Uber is acting unlawfully in not affording its drivers basic workers’ rights, including paid leave and rest breaks. Uber has defended its position, arguing that the drivers are not workers but self-employed ‘partners’ of the business.
Legal Analysis
Uber describes itself as a ‘fully-licenced’ app, offering users the service of being connected via your smartphone with a private driver, who has been previously vetted by the company, for journeys from any location in London. Customers pay fares to Uber who in turn pass on the proceeds to the drivers, after taking a commission of between 20%-25% of the fees.
The Californian-based app company has argued that the drivers enjoy a level of autonomy that is not afforded to “employees” and believes this to be the main reason that most drivers use the service. An Uber spokesman has said: “As employees, drivers would drive set shifts, earn a fixed hourly wage, and lose the ability to drive elsewhere as well as the personal flexibility they most value”.
The unions have relied on the channelling of passengers’ fares through Uber as evidence of worker status and the control exercised by Uber e.g. setting the rates that customers are charged, restricting the routes that drivers can use and undertaking performance assessments on their drivers. Lawyers for the union argue that Uber’s current practice is in breach of the Working Time Regulations and say the failures to comply with the limits on maximum working hours and the legislation on rest breaks raise health and safety concerns.
Commentary
Uber has ambitious expansion plans, including an expectation of 42,000 drivers in London by 2016. This potential liability could lead to substantial financial loss and stunt their ambitions. They are defending proceedings on multiple fronts as they are currently appealing a legal decision in the US state of California in which an Uber driver was deemed an employee rather than a contractor. A similar ruling in the UK legal proceedings could prove extremely damaging financially and harm Uber’s reputation in the UK.