“We have reached the conclusion that any driver who (a) has the App switched on, (b) is within the territory in which he is authorised to work, and (c) is able and willing to accept assignments, is, for so long as those conditions are satisfied, working for Uber under a ‘worker’ contract and a contract within each of the extended definitions.”
That’s the landmark ruling made in the UK recently which has put the whole Uber fraternity in disarray leaving especially the management in a very compromising situation. The ruling which was made by the UK employment court clearly stated that drivers are not self-employed and should be paid the “national living wage”. And not only that but they should also be entitled to holiday pay, paid rest breaks and the National Minimum Wage something which is bound to open a can of worms for the San Francisco based company which is currently valued at over 50 billion USD.
The ruling currently stands for only 19 of its employees but the other 40,000 drivers are also setting themselves up for a court process as reported by the Guardian.
Uber intends to appeal citing the ruling as a total breach of their business model. “Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss. The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people we will be appealing it.” Jo Bertram, regional general manager of Uber in the UK told Tech Crunch.
This opinion had been earlier countered in court as again reported by Tech Crunch where the tribunal disagreed, taking a sceptical and ultimately dim view of its arguments — including dubbing Uber’s “supposed driver/passenger contract” as “a pure fiction which bears no relation to the real dealings and relationships between the parties”.
This comes in the wake of another ruling made in Kenya where the Kenya Revenue Authority passed the responsibility of paying value added tax to car owners themselves. According to KRA, platforms such as Uber, Little Ride, Mondo Ride, and Taxify are IT firms that only provide a software to power the taxi industry.
“The companies listed do not actually offer taxi services, but they provide a platform or an app that assists taxi operators in their activities,” said Benson Korongo, KRA’s commissioner in charge of domestic taxes.
This ruling again was met with a lot of opposition especially from taxi companies such as Pewin and Kenatco, who already pay levies to the government and who will now be forced to pay additional taxes making it harder for them to compete.
All these scenarios bring into question how tech companies advance this analogy of gig economy where platform giants have sought to minimize costs by classifying the large numbers of people needed to operate their services as self-employed.
This is at the same time subjecting them to certain rules and regulations making the whole business model skewed and totally biased. Uber for example requires drivers to “support Uber in all communications”, including placing requirements on workers such as refraining from speaking negatively about the company and its business in public.
Guglielmo Meardi, a professor of Industrial Relations at Warwick Business School while speaking to Tech Crunch, said that the Uber ruling will demystify much rhetoric on the ‘gig economy’ being inherently liberating, and stimulate the debate on the opportunities, limits, challenges and ways of addressing the new forms of contracting work and activities that do not fit into the traditional categories of work.
Speaking to Janet Kemboi who is Kenya’s Uber Spokesperson, this decision will do little to deter current operations in the region. Actually she’s much more convinced majority of the drivers would prefer to maintain the status quo. She quoted a recent pole which was stated that majority of drivers, and (94%) just to be specific say they signed up to Uber because they ‘wanted to be their own boss and choose their own hours’. By a margin of almost five to one (76% to 16%) drivers said that being self-employed and being able to choose their own hours is preferable to having things like holiday pay which come with being a worker or employee.
With each quarter fielding conflicting opinions, it would be interesting to see how the whole debacle pans out because the results are likely to shake up how technology companies have been operating in the past in regards to labour laws.
I’m however putting my money to Uber losing the appeal.