Putting the brakes on Uber

The judgment of the Supreme Court in the long-running Uber drivers’ case was today handed down and upheld the decisions of the Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal that Uber drivers are not self-employed but are workers.

The Employment team Tony Dempsey and Lucy Flynn at our specialist corporate law firm Beyond Corporate explain.


This was not unexpected – after all Uber had claimed as part of its defence that it was a provider of a technology platform rather than taxi services.

To rub salt in Uber’s wounds the Court went further by confirming that Uber drivers were workers from the time they logged on to the Uber app to the time they logged off – irrespective of whether they were carrying passengers or not at any given time in that period. Making themselves available for work was enough.

Throughout its journey through the judicial system the case has been pretty fact specific – after all Uber’s business model was hailed as ground-breaking. However, the decision does have wider implications for the gig economy.

Previously we have been told that a written contract was sacrosanct; then that we could only look beyond it if it was a sham. Now it is not to be used as a starting point at all – what matters are the practical realities of the relationship between those providing work and those doing it. Anything in a contract that is in there just to try and defeat worker status can be ignored.

This allowed the Court to disregard Uber’s argument that their drivers worked for themselves as independent contractors, performing services under contracts made with passengers through Uber as their booking agent.

Instead the Court unanimously found that by setting fares, dictating contract terms, penalising drivers for refusing rides and using reviews and ratings as justification to terminate the relationship, Uber had put the drivers in a position of subordination and they were not genuinely self-employed.


No right of appeal


The decision is a hefty blow for Uber as the levels of appropriate compensation will now be assessed for thousands of its drivers, many of whom have already instigated claims against the ride hailing app firm and some more of whom will now do so on the back of this judgement.

There is no right of appeal against the judgment for Uber and will clearly mean a wholesale reappraisal of its business model. No doubt this will lead to higher fares, as not least the judgment is likely to mean that Uber will be classed as a transport provider and will have to charge VAT on its prices.


The Gig Economy


The Claimants in the case, Yaseen Aslan and James Farrar, told the BBC that they were “thrilled and relieved” by the conclusion to the dispute, which began as long ago as 2015.  The decision has been widely hailed as a victory, not only for the tens of thousands of Uber drivers directly affected by it, but also by many individuals operating in the wider gig economy.

The rights of workers include:

  • The right to written particulars of employment (for those beginning work on or after 6 April 2020)
  • The right to be paid National Minimum Wage
  • Protection against unlawful deduction from wages and to receive an itemised pay statement
  • The right to paid annual leave
  • The right to take rest breaks
  • The right to a maximum working week of 48 hours
  • The right to be accompanied at a disciplinary or grievance hearing
  • Protection under the Equality Act 2010 against less favourable or discriminatory treatment due to a protected characteristic


Where to now?


Perhaps the most striking element of the case is the signal that the Supreme Court has sent out that we are now in an era where the judiciary is prepared to take a much more interventionist approach and eschew a traditional reliance on black letter law. It explicitly recognised that

the general purpose of the employment legislation invoked …….. by the claimants in the present case, is not in doubt. It is to protect vulnerable workers from being paid too little for the work they do, required to work excessive hours or subjected to other forms of unfair treatment (such as being victimised for whistleblowing).”

The Supreme Court then made sure it found a way of doing this.