Uber drivers are workers, not self-employed contractors

In Aslam and ors v Uber BV and ors, the London Central Employment Tribunal has held that drivers engaged by Uber are not self-employed contractors, but fall squarely within the legal definition of ‘worker’ under S.230(3)(b) of the Employment Rights Act 1996 (and equivalent definitions in the Working Time Regulations 1998 and the National Minimum Wage Act 1998) with the result that they are legally entitled to the national minimum wage, paid annual leave, and whistleblower protection. The tribunal’s judgment sets out a scathing critique of Uber’s submissions that it is a technology platform as opposed to a transport provider and that its drivers are self-employed contractors offering their services to passengers via the Uber app. In the tribunal’s view, any driver who has the app switched on, is within the territory in which he or she is authorised to work, and is able and willing to accept assignments is – for so long as those conditions are satisfied – working for Uber under a worker contract.

The tribunal highlighted that Uber runs an enterprise whose central function is the carrying of people in cars from one point to another and that it operates in part through a company that is regulated as a private hire vehicle operator, but that it resorts in its documentation to ‘fictions’, such as fake invoices that it generates on behalf of its drivers but that are never sent to passengers, and ‘twisted language’ in its contracts with drivers. The tribunal considered that the ‘remarkable lengths’ to which Uber had gone to compel agreement with its legal analysis merited ‘a degree of scepticism’. Moreover, the tribunal noted that in other correspondence, for example in submissions to the Greater London Authority Transport Scrutiny Committee, Uber had boasted of providing job opportunities and potentially generating tens of thousands of jobs in the UK, and paying its drivers on a commission basis. The tribunal also agreed with the findings of the North California District Court, in a similar case brought by Uber drivers in California, that ‘Uber does not simply sell software; it sells rides.’

In the tribunal’s view, the case put forward by Uber did not correspond with the practical reality. The notion that Uber in London was a mosaic of 30,000 small businesses linked by a common platform was ‘faintly ridiculous’. Save for a few individuals who operate more than one vehicle on their Uber account, each such business consisted of an individual with a car seeking to make a living by driving it. In addition, Uber’s case was dependent on the assertion in its terms and conditions that the driver enters into a contract with each passenger to provide the transportation service – but this would be absurd, since neither party knows the identity of the other, the route is set by Uber and the price is calculated by and paid to Uber. The tribunal therefore considered that the driver/passenger contract was a pure fiction.

With regard to the nature of the relationship between Uber and its drivers, the tribunal noted in particular that: the terms for passengers contradict themselves insofar as they state that Uber is the drivers’ agent but at the same time asserts ‘sole and absolute discretion’ to accept or decline bookings; Uber interviews and recruits drivers; Uber controls key information as to the passenger’s identity and intended destination and does not share this with drivers; Uber requires drivers to accept and/or not to cancel trips and enforces this requirement by logging off drivers who breach it; Uber sets the default route for each trip and the driver may face deductions from his or her fare if he or she departs from it; Uber fixes the fare and the driver cannot agree a higher sum with the passenger; Uber imposes conditions on drivers, instructing them on how to do their work and controlling them in the performance of their duties; Uber subjects drivers through its rating system to what is effectively a performance management/disciplinary procedure; Uber determines issues about rebates for passengers, sometimes without involving the driver affected; Uber used to operate a scheme guaranteeing minimum earnings for new drivers; Uber accepts the risk of loss, for example where a passenger soils a vehicle or in the case of fraud, which if the drivers were genuinely in business on their own account would fall on them; Uber handles passenger complaints; and Uber reserves the right unilaterally to amend drivers’ terms.

The tribunal concluded that the wording of S.230(3)(b) ERA was fully applicable to the drivers in the instant case and that the guidance in the principal authorities favoured its view, rather than that put forward by Uber. It considered that the problem stemmed from the unequal bargaining positions of the parties, noting that many Uber drivers do not have English as a first language and will not be accustomed to interpreting ‘dense legal documents couched in impenetrable prose’, which the tribunal considered simply misrepresented the true rights and obligations on both sides. However, the tribunal noted that nothing in its reasoning should be taken as doubting that Uber could have devised a business model that did not involve it employing drivers; it was simply that Uber’s chosen model failed to achieve that aim.

Uber has confirmed that it will be seeking to appeal the decision.

Link to judgment: https://www.judiciary.gov.uk/judgments/mr-y-aslam-mr-j-farrar-and-others-v-uber/