On Uber v. Aslam & Others — the UK Supreme Court
Like Airbnb is widely hailed as the first lodging company without any owned lodges/apartments, Uber is still widely regarded as a transportation company without any drivers or even any cars. Uber still remains one of the most peculiar business models we’ve come across, and has caught the eyes of many, even the UK Supreme Court, albeit for different reasons.
On 19th February, 2021, the UK Supreme Court ruled, in Uber v. Aslam & Others, that drivers registered under the Uber platform are workers of Uber. In arriving at this decision, the Court relied on the interpretation of ‘worker’ as defined in the Employment Rights Act 1996, the National Minimum Wage Act 1998, and the Working Time Regulations 1998. By implication of the definition in these legislations, drivers are entitled to minimum wage, and annual leave. The case went through four different tribunals: the employment tribunal, the Employment Appeal Tribunal, the Court of Appeal, and eventually the Supreme Court, with all four tribunals ruling in favour of the drivers.
What started it?
Yaseen Aslam and James Farrar, representing thousands of other Uber drivers within London, brought an application before the employment tribunal claiming entitlement to the national minimum wage and paid annual leave in the course of driving passengers using the Uber app. Uber’s lawyers argued that Uber drivers were self-employed independent contractors and referred to them as ‘partners’ in its terms and conditions, while the driver’s lawyers argued that they are Uber’s workers, and cited the high level of control over their operations, making them entitled to their claims. The Employment Tribunal ruled in favour of the drivers, and the Employment Appeal Tribunal and Court of Appeal did likewise. Uber still appealed to the Supreme Court, and the SC upheld the decision of the 3 previous tribunals and dismissed Uber’s appeal.
The Court also held that Uber drivers were “workers”, and not self-employed contractors, as stated in UK employment law. In reaching its decision, the following findings formed the Court’s rationale:
1. Uber’s control of remuneration: Uber entirely fixes the fare for rides and “service fee”, and not the driver. Uber also reserves the right and discretion to refund the fare to a passenger in response to the passenger’s complaint(s) about service delivery;
2. Uber’s control of the contractual terms: As is the case with most software, potential users are unable to vary agreements to their advantage, and must either accept the prescribed terms and conditions, or discontinue their use of the software.
3. Control of information available to driver: Uber controls the information available to the driver (passenger’s destination) before deciding to take up trips. So, the driver must accept trips to destinations which may be against his/her wish. This control also extends to the number of trips accepted or cancelled by the driver: If the driver cancels a certain number of rides over a period of time, Uber may automatically log the driver off the app. This Court described this as being synonymous with the classic penalty of ‘docking pay from an employee’ by preventing the driver from remuneration when he is logged out of the app.
4. Control of the driver’s service delivery methods: Uber has a minimum year/model of cars to be used by its drivers. The service delivery control is also evident in Uber’s rating system in which feedback from a passenger on a rider’s delivery is sent to Uber, in what the Court described as a classic form of subordination that is characteristic of employment.
5. Restriction of communication to matters strictly related to the particular trip, and prohibition of any relationship(s) whatsoever, other than for the return of lost property to passengers.
By establishing these five components of control by Uber, the judgment held Uber out as an employer of its drivers, and that the drivers are limited by these elements in improving their finances through other means, therefore making them entitled to the employment rights of workers as defined in the legislations cited above. By implication of the legislations’ provisions, Uber must pay its drivers the national living wage, and paid holidays of at least 28 days.
The watershed
Clearly, the Court arrived at its decision through a sound consideration of the above factors which all have one glaring similarity: control. Undeniably, Uber wields a peculiar form of influence over the drivers and their mode of operation, one similar to that which employers hold over their employees. In light of this, why, then, should Yaseen and his colleagues be deprived of benefits accruable to workers who are controlled as much as they are?
However, a few points are worth noting in the SC’s decision: throughout the Supreme Court’s decision, it did not establish that the drivers are also employees even though it held out Uber as employers of the drivers. This omission also extends to other factors that stem from Uber’s relationship with the driver (worker), such as remittance of income tax and other taxes to the government, or pension contributions.. Will Uber remit income tax on behalf of its ‘employees’ to the government? On the basis of this decision, Uber should do so, and remit taxes to the government, however, viewing this consideration (tax remittance) in this light robs Uber of this innovative business model. Also, the Uber model permits its users to drive whenever they want, at their preferred time, as such, the issue of annual leave with pay should not have been considered, except only for purposes of the Acts cited.
This decision will be re-echoed, one way or the other, in the operations of other companies such as Deliveroo, Ola, and companies in the gig economy providing such “on-demand” services. Since the commencement of the initial suit in 2016 at the Employment Tribunal, hundreds of claims have been brought against Uber, and the company changed some features of its business by giving more control to drivers on how they earn, and even providing new protections such as free insurance in cases of sickness/ injury. As laudable as Uber’s model is, this judgment is grand and far-reaching, and the ride-hailing giant and its counterparts may need to revisit, tweak, and innovate their models just a bit more.
