
Uber drivers win employee rights case - johneth
http://www.bbc.co.uk/news/business-37802386
======
ascorbic
There are a lot of commenters who are misunderstanding the implications for
this. This doesn't mean that every platform is now an employer. This case just
happens to have many, many reasons that point to the drivers being workers not
contractors. It's worth reading the judgment, but they have a useful summary
of the points:

    
    
        The contradiction in the Rider Terms between the fact that ULL purports to 
        be the drivers' agent and its assertion of "sole and absolute discretion" to 
        accept or decline bookings.
    
        The fact that Uber interviews and recruits drivers.
    
        The fact that Uber controls the key information (in particular the passenger's 
        surname contact details and intended destination) and excludes the driver 
        from it
    
        The fact that Uber requires drivers to accept trips and/or not to cancel trips, 
        and enforces the requirement by logging off drivers who breach those 
        requirements.
    
        The fact that Uber sets the (default) route and the driver departs from it at 
        his peril.
    
        The fact that UBV fixes the fare and the driver cannot agree a higher sum 
        with the passenger. (The supposed freedom to agree a lower fare is 
        obviously nugatory.)
    
        The fact that Uber imposes numerous conditions on drivers (such as the 
        limited choice of acceptable vehicles), instructs drivers as to how to do their 
        work and, in numerous ways, controls them in the performance of their 
        duties.
    
        The fact that Uber subjects drivers through the rating system to what 
        amounts to a performance management/disciplinary procedure.
    
        The fact that Uber determines issues about rebates, sometimes without
        even involving the driver whose remuneration is liable to be affected. 
    
        The guaranteed earnings schemes (albeit now discontinued).
    
        The fact that Uber accepts the risk of loss which, if the drivers were 
        genuinely in business on their own account, would fall upon them.
    
        The fact that Uber handles complaints by passengers, including complaints 
        about the driver.
    
        The fact that Uber reserves the power to amend the drivers' terms 
        unilaterally.
    
    

[https://www.judiciary.gov.uk/wp-
content/uploads/2016/10/asla...](https://www.judiciary.gov.uk/wp-
content/uploads/2016/10/aslam-and-farrar-v-uber-reasons-20161028.pdf)

~~~
smsm42
Pretty much these facts would apply to any value-add collaboration platform
that serves as middle-man between customer and whoever executes the task. Most
of them screen their contractors and have preconditions, have ratings, many of
them have provisions to shield both sides from dishonest players, many of them
have incentives and rebates to attract customers, most of them handle
complaints (of course they do, the customer paid money to them, who they'd
complain to if something is wrong? Whoever got the money!), etc.

That means pretty much any added-value marketplace is now considered employer
in UK, thus the whole model becomes infeasible.

~~~
IanCal
If the platform controls how and when the work is done, doesn't allow
subcontracting, and is in full control of the price, then that sounds like the
platform isn't a middle man but an employer.

> That means pretty much any added-value marketplace is now considered
> employer in UK, thus the whole model becomes infeasible.

No, only ones that have a large degree of control over how the work is done
and over the interaction with the customer, including all pricing. Fiverr, for
example, really doesn't meet these and nor would etsy.

And really, the requirements on employing workers isn't much. Paid holiday
(pro-rata, there are already easy ways of calculating the amount owed to
irregular workers), rest breaks, minimum wage and _possibly_ a contribution to
a pension scheme. These are all requirements of small employers at the moment
so it's not a huge thing.

~~~
smsm42
> If the platform controls how and when the work is done, doesn't allow
> subcontracting, and is in full control of the price, then that sounds like
> the platform isn't a middle man but an employer.

The client controls how and when the work is done. Uber can't just send a
driver to drive somebody - somebody has to actually _ask_ to be driven.

Most collaboration platforms - like TaskRabbit for example - don't allow
subcontracting. And for a reason - if I asked for John, 5*, proficient in
electrical work and general handyman work, many positive reviews, and Anthony
shows up instead, I don't want him - I don't know him and don't trust him.

> is in full control of the price

Many such platforms have pre-set hourly or per-task rates. Such us Fiverr.

> Fiverr, for example, really doesn't meet these

Fiverr is literally named after a fixed $5 rate.

> And really, the requirements on employing workers isn't much.

Especially if you're not the one paying them.

~~~
IanCal
> Fiverr is literally named after a fixed $5 rate.

Which is not forced, no? I opened fiverr and can see quite a range of
different rates.

Fiverr allows subcontracting, or at least it happens, and I choose the person
who works for me. With uber I don't pick a specific driver, I just order a
taxi.

> The client controls how and when the work is done. Uber can't just send a
> driver to drive somebody - somebody has to actually ask to be driven.

If you go down this route of logic, shop workers are self-employed because
they don't have to forcibly sell items to customers, only selling the things
the customer wants. It's worth reading the judgement to see just how
controlling uber are in the UK with their drivers, and why they were found to
be workers.

> Especially if you're not the one paying them.

Holiday, rest and minimum wage all come under the amount they say drivers get
on average anyway (together add up to about half what they say drivers get).
Payroll is a pretty simple task that even small businesses are required to do.
Worker status doesn't confer that many rights, far fewer than "employee".

------
Neil44
Good. If your path to ritches involves circumventing laws to protect workers
in order to pay them less and undercut the competition, then basically you are
the reason these laws exist.

~~~
Shivetya
Okay, but I am trying to figure out how you exploit people who voluntarily
work for you. They know what they will get paid and what is expected.

If anything this protects the established taxi services more than benefiting
any worker. Effectively they had probably pushed some people out of the
ability to work for Uber

~~~
EliRivers
Exploitation of voluntary workers has a long, long history. It's basically the
reason why unions came into existence, and employment laws.

For example, in times of high unemployment, I could tell my workers that if
they want to keep their jobs, they will work unpaid overtime, or take a pay
cut, or give me a blow job, or work without adequate safety gear. These kind
of Hobson's choices are real things that really happen.

I frequently see a less explicit exploitation of voluntary workers in
companies; when a company encourages a culture of long hours and not taking
holidays, they're getting extra hours for free from their voluntary employees
(take your holidays, people).

------
jasode
The traditional taxi drivers in UK are already classified as independent
contractors.[1]

If Uber wanted to stay in the UK market, what would be the minimum they would
have to do so that the Uber drivers are considered "contractors"? Is it just
letting the drivers set their own fares?

In other words, if sellers on ebay are not employees of ebay and programmers
submitting apps to Apple iTunes Store are not employees of Apple, what does
Uber need to do so they are considered a platform instead of an employer?

[1][https://www.gov.uk/government/publications/vat-
notice-70025-...](https://www.gov.uk/government/publications/vat-
notice-70025-taxis-and-private-hire-cars/vat-notice-70025-taxis-and-private-
hire-cars#drivers-of-taxis-and-private-hire-cars)

~~~
pmyteh
English law recognises that there is a continuum between obviously employed
and obviously self-employed, but the categorisation in any particular case
will be down to the reality of the actual relationship between the
employer/contracting company and its staff/contractors. There's no bright
line, edge cases are ruled on case-by-case in the tribunal, as here.

The actual criteria are pretty complicated - see the guidance manual at
[https://www.gov.uk/hmrc-internal-manuals/employment-
status-m...](https://www.gov.uk/hmrc-internal-manuals/employment-status-
manual/esm0500) \- but the essence of it is control ("does the boss have the
right to tell the worker what, where, when and how to work?"), personal
service/substitutability ("can the worker send someone else to do the job,
instead of doing it himself?"), risk ("who is on the hook if something goes
wrong?") and some other factors. Very fact-specific.

Incidentally, one of the standard features of traditional taxi drivers in the
UK is that they _don 't_ set their fares, that being the responsibility of the
local government. Uber drivers are licensed in the separate category of
'private hire', which has less stringent licensing (and the right for a firm
to set its own fares) but a prohibition on picking up passengers by being
hailed, and some other restrictions.

~~~
vog
_> English law recognises that there is a continuum between obviously employed
and obviously self-employed_

Very similar here in Germany, I guess. There is the term
"Scheinselbstständig", which roughly translates to "fake self-employed". If
you are formally self-employed but meet certain criteria, your "customer" (who
is then considered to be more your employer than a customer) has certain
obligations to you, and you have certain rights, which you can't easily trade
away.

~~~
lgieron
In the UK (and also in, for example, Poland) self-employed people pay much
lower taxes than the employees - hence we're all very happy to trade away our
rights.

~~~
rwmj
I believe you are thinking of people who set up companies and pay themselves
through dividends (which have a much lower tax rate), which is now (highly
controversially) illegal -- search for "IR35".

Ordinary self-employed people and sole traders pay nearly the same tax rates
as employed people (National Insurance, a strange disguised tax, is at a
different rate), but have many fewer rights, eg. no right to paid time off or
sick pay.

The question in this case is whether Uber drivers are self-employed or not.
Not as it turns out.

~~~
nvarsj
> pay themselves through dividends (which have a much lower tax rate), which
> is now (highly controversially) illegal

What on earth are you talking about... taking out dividends is not illegal,
even for individual company owners. IR35 is about HMRC forcing self employed
people to apply payroll taxes as if they were employed. Again, nothing to do
with dividends.

------
noir-york
Good. Good for the drivers, for employee rights, for reducing inequality.

Good for the short term. Because within the next few years expect Uber to move
to self-driving cars. Automating truckers will be a watershed.

There will come a time when basic income of some sort will need to be
considered by advanced economies, or else expect unemployment, unrest and the
rise of populist demagogues who will be much better (worse) candidates than
Trump.

~~~
JonFish85
"Uber to move to self-driving cars"

I still don't understand why that scenario requires an Uber. Once self-driving
cars are a thing, why does Uber need to exist? Their competitors in that case
would be actual car manufacturers, and rental car companies that already have
a distributed system for deploying cars (and partnerships with manufacturers).
What edge does Uber have? Certainly they have mindshare, but that can
evaporate as quickly as it was built.

~~~
kylecordes
It seems to me that there will be a fair amount of consumer inertia. Uber may
be able to benefit for a number of years from people thinking of this as the
app to go to to get a ride, automated or otherwise.

Of course in the long run (or even the medium run) that seems basically moot.
There will be a zillion different ways to get essentially the same thing
anyone else, I don't see any way for Uber to maintain a long-term advantage.

~~~
ethanbond
What evidence does anyone have that users are reluctant to uninstall and/or
download another app?

It takes literally a few seconds to do.

~~~
IanCal
It depends if there's any real benefit. If I can choose between these
situations where I pay basically the same amount of money:

* Open app, press hail button * Search for app, install app, setup user details, put in all my card details, press hail button

Why would I choose the latter?

~~~
ethanbond
That doesn't really answer my question.

~~~
IanCal
Well, I rather think it does, I have no reason to download another app unless
I know it's going to be a lot cheaper. Otherwise I'm just going to stick with
the thing that's easy and already setup.

~~~
ethanbond
Okay, and I have 4 ridesharing apps currently installed, 2 of which were
installed and setup _while waiting for an Uber to arrive_. There, we both have
anecdata.

I asked for evidence of "consumer inertia." One or two datapoints does not
"inertia" make.

------
mckee1
Uber aren't profitable as it is (and their prices aren't that much cheaper
than taxi's in the UK - so they can't just price hike without losing large
numbers of customers).

I assume their strategy for profitability now, in the UK at least, is just
take VC money until driverless cars are legalised.

~~~
caractacus
> their prices aren't that much cheaper than taxi's in the UK

Really? I find them at least a third cheaper than taxis in London for any trip
over about five minutes.

I still feel guilty for taking an Uber (and note the difference in ability and
knowledge immediately compared to black cabs). I'll be more inclined to take
them, even with less of a saving, knowing that they are not allowed to treat
their drivers quite so poorly.

~~~
johnzim
I've had 2 situations where the Knowledge of black cab drivers has been
hopelessly outclassed by the smarts of smartphone sat-nav.

The cab drivers sat in traffic, the Uber drivers were alerted and rerouted. I
arrived on time and with a smaller bill. Sure a black cab driver could have
done that with smartphone alerts but none of them seem to make use of them -
perhaps it's due to professional pride derived from passing the famously
difficult "Knowledge" exams.

Finally, black cabs are horrible if you're a cyclist, whereas Uber drivers are
by-and-large no different from any other driver.

I'm glad the Uber drivers have better employment status now but aside from the
horrible misfortune of having bought a hackney license, I don't really have
too much sympathy for Black Cab drivers.

------
chatmasta
Why does Uber not allow its drivers to set fares? Wouldn't that be the true
"Ayn Rand approach" to a marketplace?

It would be cool if, as a rider, I could set a maximum fare I'm willing to
pay, the drivers can bid on the fare, and I'm matched with some combination of
nearestDriver * lowestFare.

I imagine Uber has thought of this already, so there must be some reason
they're not doing it. Why?

Classic economics suggests this would result in a more efficient market.
Perhaps Uber has modeled it and found it would also result in lower fares.

~~~
nickff
I don't like to put words in other people's minds, or thoughts in their heads,
but I would hazard to guess that Uber has set prices for the sake of
stability, and to give the users (drivers and passengers) some expectation of
what fares might look like on a 'normal' day. It may be that as more users
join the platform, it could be transitioned to a bid/ask model.

A bid/ask model may lead to more efficient pricing, but could increase
transaction costs and lead to a less efficient overall market. I do not know
whether this is the case, and it would be difficult to test, though Uber and
Lyft are in a very good position to test.

~~~
return0
Couldn't each driver just propose a fare and let the customer accept it?

~~~
nickff
Yes, that would be an ask-only model. The issue there would be that the
customers would have to select from a list, where the list composition was
constantly changing (in busy areas). People might also be hesitant to user an
app if they have no idea what it will cost. These issues would probably be
solvable or solved, as I'm sure prices would stabilize in busy markets, and
people would probably be willing to accept any price under $X; transaction
costs would still be higher than with the current Uber/Lyft model.

~~~
return0
I really dont think it would be a big bother. Most of the time the drivers
would accept Uber's proposed price, and i really see no big issue with
selecting a driver/fare from a list. IT would also create a entire market for
"uber fare optimization".

~~~
EdHominem
An open market should also exist, but for branded products I'd prefer
consistency over slight potential savings.

That's the difference between Uber and craigslist.

------
dkhenry
This isn't an employee rights case. The only winner in this case is not
employees but other Taxi services. If I were an Uber driver I don't want to be
an employee. I want to be a contractor that can turn his app on or off at
will.

~~~
ascorbic
The judgment is clear that these are not mutually exclusive. In this case
they've ruled that a driver is a worker during the period when they are
logged-in to the app and ready to accept rides. They're still able to close
the app, at which point they are no longer working.

~~~
dkhenry
Which doesn't make sense for an employer to continue to allow. If I have to
pay start to pay for the fringe benefits of being an employee then I want the
guarantees that come along with that. So I am going to want to have tighter
control over when and where you are working and dictate more of your working
conditions.

The beauty of the independent contractor model is that it gives the contractor
freedom. If I have to pay you a minimum wage when you have your app on then
you better believe I won't allow you to have two apps running at the same
time. This is a net loss for people who were just trying to make some money
being a driver.

~~~
ascorbic
The point of this ruling is that Uber already does loads of things that only
an employer would normally be able to do. That independent contractor
flexibility just isn't there anyway. It sure as hell isn't employment law
stopping Uber from setting a rule that prevents drivers from running two apps
at once. In any case that's not really an issue in the UK, where there aren't
any direct competitors such as Lyft.

~~~
dkhenry
I would disagree with the assertion that they do things only an employer can
do ( which I understand means I am firmly wrong in the sight of UK law ), I
would rather Uber can set additional rules in exchange for additional
flexibility for the contractor.

What I see in this ruling is that the "solution" seems to be make the
contractors employees instead of give the contractors liberty to self direct
more.

~~~
pmyteh
If Uber wrote a new contract, with greater autonomy and less direction for its
drivers, it's quite possible that it would be upheld as genuine self-
employment; the ruling covers the workers' current arrangements. So that route
is feasible if Uber is willing to cede its control. I think that somewhat
unlikely.

------
chrischen
Employees can't hop between apps, so this decision screws smaller competitors.

~~~
IanCal
_Workers_ can most definitely have more than one employer.

------
nickjarboe
I recently got my first smartphone and the main reason was to have access to
Uber. Prices are 1/2 to 1/3 of taxis, with better availability. I'm not sure
the pricing is sustainable and feel many drivers are just using Uber sell a
fraction of their late model vehicle along with a small bonus.

The other day I grabbed an Uber from Pleasanton to Oakland. $33 for 30 miles.
Not much in it for the driver, if you consider all the costs, but he works in
Pleasanton and lives in San Leandro. As they say, a win/win. Uber lets you set
a destination for your pickup twice a day, which allows commuters to be
drivers. I like this use case and hope these types of lawsuits against Uber
doesn't eliminate it.

------
vslira
I hope I'm not sounding too milton friedman-y here, but even if Uber's
business model is dependent on circumventing labor laws to depress wages, in
the case it goes under it won't be Uber drivers to benefit the most from it,
but medallion owning companies and cab drivers.

~~~
walshemj
The UK doesn't have a medallion system

~~~
anexprogrammer
Yes we do, they're the plates that are required to be displayed on both Black
Cabs and Private Hire.

In some areas they're quite valuable and sell for £30k+ (without the car to
attach it to).

~~~
pmyteh
Private hire licencing is the responsibility of local authorities and probably
varies. In many places, they're easy to get, though; Transport for London seem
to have no limit on numbers and a fee of £100 a year -
[https://tfl.gov.uk/info-for/taxis-and-private-
hire/licensing...](https://tfl.gov.uk/info-for/taxis-and-private-
hire/licensing/private-hire-vehicle-licence)

~~~
anexprogrammer
Oh I know, but some areas still restrict licenses and it can lead to the
ridiculous costs. Not sure how wide restrictions are, just that they're much
less common than they used to be!

------
jacquesm
That could be really bad if the tax man wants retroactive payments because of
this ruling.

30K people times a few years that really adds up.

~~~
ljf
Bad for who? Uber - yes, but for more honest/rule abiding competitors, the
British public via the tax office, the drivers... seems pretty good

~~~
jacquesm
Yes, I meant for Uber.

------
Eridrus
In the US many employers restrict the hours that employees can work to avoid
paying benefits, is this a likely tack for Uber if they lose the appeals?

~~~
johneth
I think it might be quite difficult for them, as some of these rights apply
regardless of hours worked: [https://www.gov.uk/employment-
status/worker](https://www.gov.uk/employment-status/worker)

~~~
tankenmate
Indeed one of the categorisations that qualifies you as self employed is
whether the times you work are dictated to you or whether you set your own
work timetable.

~~~
Eridrus
This would not necessarily dictate the times worked, just the amount.

On site like Upwork it is common practice to have people work 10h/week to
start so that work product can be evaluated before spending a tonne with a
given contractor, or just to be able to keep up and interact at a reasonable
pace.

That's not really a legal argument, but it is some precedent that controlling
the amount of hours worked is not the same as controlling exactly when they
are worked.

------
ethanbond
This seems like really, really bad news for Uber. Could someone with more
knowledge on the topic chime in on how this might manifest?

~~~
jylam
It's funny that I thought the same thing but from the other side, "it seems a
really good news for Uber 'employees' (or workers or whatever you want to call
them)". That's something I always try to keep in mind while reading HN, most
of us are well paid to do something we love, many of us are entrepreneurs
(whatever that means, again), and most (?) of us are americans. Uber drivers
are not well paid, and if they are they work 26 hours a day in LA or NYC or
any big rich city and don't know if they still will earn enough money in one
or two years because Uber will change their contract or let them go if they
refuse.

~~~
anuberaway
Most Uber drivers and customers I meet are very happy with the experience.
Scores of them left traditional jobs to drive for Uber because they liked the
pay and flexibility.

Some of regulation of ride-sharing seems to be done out of a spirit of
bitterness that they aren't "following the rules", and it doesn't seem to be
in benefit of anyone.

~~~
serge2k
> Some of regulation of ride-sharing seems to be done out of a spirit of
> bitterness that they aren't "following the rules", and it doesn't seem to be
> in benefit of anyone.

Some rules are in place for a reason. The US is sadly awful when it comes to
workers rights. It's why Uber can get away with this garbage. It's why "right
to work" and "at will employment" laws exist. It's why IT workers are overtime
exempt. It's why "union" is a dirty word in many circles.

Skirting employment law isn't being DISRUPTIVE! It's just being a scummy
business.

~~~
pitaj
> Skirting employment law isn't being DISRUPTIVE! It's just being a scummy
> business.

No. Treating your workers poorly makes you a scummy business. Not every case
of skirting employment law is a case of treating your workers poorly, and not
every case of poor treatment is covered by employment law.

Conflating legality with morality is a cornerstone of authoritarianism.

------
FT_intern
Probably want to add "in the UK" to the title.

~~~
M2Ys4U
I'd be happy with that if US-centric news has "in the US" after it.

~~~
FT_intern
there are similar cases going on in the US and most of Uber's revenue comes
from the US.

------
juandazapata
This is just a transition to driverless cars. Uber knows it and they are
willing to pay the price.

~~~
celticninja
That doesnt make sense. Yes I know that Uber want to transition to driverless
vehicles but they cannot do that right now, they will need to maintain their
momentum until such a time that they can do that. Which right now means adhere
to the ruling to ensure that Uber still has a brand in the UK when they
introduce driverless vehicles.

~~~
tcrews
That's at least 10-20 years before the legal implications of driverless cars
are figured out. That is, if the technology really proves to be reliable. Uber
better have a lot of VC money to keep burning $2.4bn/year.

------
huhtenberg
Uber basically has little choice but to exit the UK if their efforts to keep
it all on a contractual basis fails. This is similar to the Walmart vs Unions
situation, I'm just curious how willing Uber is to make an example out of UK.

~~~
tomgp
I think this is a strange way of looking at it. This is the British legal
system making an example of Uber; asserting that existing laws apply even if
you manage your workforce via an app.

~~~
anexprogrammer
It's not even that, Uber were just first to get a verdict. There's quite a few
"fake self-employment" cases going through the system at the moment. Hermes
and Deliveroo for certain, and I think Yodel too.

~~~
huhtenberg
But by the same logic a website that helps matching graphic designers with
prospective clients should be considered said designers' employer? This makes
no sense.

~~~
anexprogrammer
If the site exercised enough direction and control so they specified you must
do the work at their desk in their working hours. If they deny you the right
to substitute an acceptable alternative person, or work for others, then the
relationship would start to seem of employment. There's quite a lot of other
pointers.

Uber seem to fail most of these "in business" points for their drivers with
their heavily one sided agreement.

Going back to IT contractors and IR35 in the early '00s it's been a constant
"discussion" of where the line is. For contractors we had to get quite good at
amending contracts, and satisfy other aspects to be able to remain unaffected.
In that case the govt wanted us to be employees, contractors didn't!

~~~
UK-AL
I'll think you find that Uber drivers also want to be self employed.

There is only 2 drivers who led this case, and they currently work for some
private taxi cab association.

~~~
hythloday
And all people on zero-hours contracts love that and all children who worked
in factories were violently against being sent to school.

~~~
UK-AL
There's a whole class of workers want the flexibility. Students, people who
can only work a few hours. Etc

~~~
IanCal
And this ruling won't in any way affect that. There's nothing in the
definition of worker that has regular hours.

------
return0
The greater issue is that legislation has not caught up with the "gig"
economy. It needs to be recognized as a distinct form of employment with
appropriate benefits.

~~~
pmyteh
It is - the 'worker' status at issue in this case is distinct from both
conventional employment and self-employment.

Of course, the reason the law already had a suitable category is because the
'gig economy' looks an awful lot like a bunch of existing labour models
(temporary, piecework-based, flexible and insecure) plus apps.

------
fiatjaf
I hope Uber self-driving cars come and these people get unemployed.

~~~
jacquesm
Why do you hope that?

They simply disputed their status in open court and the judge seems to agree
with them, whether or not Uber self-driving cars will come has no bearing on
this case, and if and when they become un-employed it _still_ will not be
because of this case or any others.

Of course employers the world over would love to get rid of their #1 cost, but
that's no reason to break the law by pretending you don't have any employees
when actually you do.

