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.
I think the issue that many readers have difficulties with is that rulings like this show how arbitrary and potentially political the regulations are. For instance, many heavily regulated professions in the USA (and probably the UK) could be classified as government employees by this definition, but they are not. Taxi drivers could even be seen as employees of their cities, as I know that London taxi cab drivers suffer conditions 2, 3, 4, 6, 7, 8, 12, and 13 at the hands of their local government.
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.
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.
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
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?
Apple doesn't tell developers which apps they must develop. They don't insist that all development work is done by the named person. eBay doesn't tell sellers what they have to sell, nor boot them off for listing things that don't sell. App developers and eBay sellers can choose their price, and what they're selling. Uber drivers can do neither. If they're "on duty", they must accept rides or be penalised, and must charge the price set by Uber.
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... - 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.
[edit - I'd be very interested to know why this is downvoted, these are the things afaik that they are required to do for workers (who are distinct from employees)]
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.
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.
> 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...
Hard to imagine that basic income will be politically possible in the near or medium term. Our culture is so wrapped up in the idea of the necessity of jobs that I predict we will see government programs to pay 1/2 of the people to dig holes and the other 1/2 to fill them in, before we see basic income.
Self driving cars are more than a "few years" out. All fully automated proofs of concept so far operate in light traffic with clear skies and high quality roads. These conditions are not prevalent in most of the US.
I believe that even truckers will be safe well into the next decade. They don't add all that much cost to the overall costs of shipping goods (when compared to fuel, maintenance, and insurance).
>>unrest and the rise of populist demagogues who will be much better (worse) candidates than Trump.
you do realize that it's the "democrats" who are promising free stuff to the masses by "taking moar moneys from the evuhl 1%". Doesn't get much more divisive and populist then that.
So now on the "republican" side there is also some level of exploiting of the archetypal beliefs that can be considered "populism", such as the ubiquitous "wall on the border" but that carries very little targeted appeal to the unemployed or poor segment of the populace per se.
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.
> 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.
Why can't they just raise the price? The service uber provides is so far superior to a traditional taxi that customers would surely be willing to pay more. I'd gladly pay much more, perhaps even double the current rates.
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.
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.
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.
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.
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.
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.
I hope all their investors have their fingers crossed that governments are going to be totally okay with self driving cars. Despite, you know, a) totally unproven technology, b) no legal structures for liability, c) no legal structures for taxation, d) unemployment of local transportation workers, e) 100% of "gains" from said unemployment going to a Silicon Valley company, f) Uber's long track record of basically being an asshole in every market it sets foot in, g) did I mention the fact that there are no driverless cars?
And hey, if they're only losing (not spending, losing) $600,000,000 per month, they've got what, at least another couple years of VC money to burn? I'm sure everything will be figured out by then.
It probably depends if they can hold out for true autonomous vehicles to become a reality.
It will be a long time before you see such cars on London streets, or anywhere without specifically designed lanes in fact.
All that cash they have accumulated is either going towards building a true driving AI that can mimic human decisions and not kill. Or it's being used to lobby/bribe governments to make their business model work while having to give compensation to drivers.
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.
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.
The only loser in that case is Uber. Uber has made most existing minicab firms step up their game - quite a few were experimenting with apps before Uber arrived, but now almost all but the one man shops have apps (in addition to phone operators), text messages on arrival, car tracking, etc... I'd be surprised if Uber can't find a way to make it profitable here, it's a long established market and they're not /that/ much cheaper, if at all, than the competition - unless the minicab industry is simply one which doesn't scale.
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.
I find this perspective a little chilling, to be honest. In what way is Uber going to "make an example of" the UK? Companies follow laws, laws do not follow companies and that's the way it should be. Corporate interests are already extremely over-represented in Government, Government should be looking out for the people not the companies.
'Uber basically has little choice but to exit the UK..'
Outside of London Uber doesn't have that much of a presence. And, where it does, the drivers are often regular private hire drivers using Uber as an extra form of revenue.
So exiting the UK isn't going to hurt them so much.
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.
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.
If a multinational operates in Europe, they should (and almost certainly did) know the status of the drivers.
The reality is that you have to meet a couple of criteria to avoid the "fake self-employment" laws, and the drivers don't.
You can work for a single client as a freelancer for extended periods of time, but you have to demonstrate that the project requires significant creative input and you're not just following orders (or a dispatch system in this case).
[+] [-] ascorbic|9 years ago|reply
[+] [-] nickff|9 years ago|reply
[+] [-] sfifs|9 years ago|reply
http://i.imgur.com/GKkF44j.jpg
[+] [-] smsm42|9 years ago|reply
That means pretty much any added-value marketplace is now considered employer in UK, thus the whole model becomes infeasible.
[+] [-] Neil44|9 years ago|reply
[+] [-] UK-AL|9 years ago|reply
[+] [-] Shivetya|9 years ago|reply
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
[+] [-] jasode|9 years ago|reply
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-...
[+] [-] ascorbic|9 years ago|reply
The full judgment is here: https://www.judiciary.gov.uk/wp-content/uploads/2016/10/asla...
Page 29 gives a good summary of the reasons that point towards the drivers being workers.
[+] [-] pmyteh|9 years ago|reply
The actual criteria are pretty complicated - see the guidance manual at https://www.gov.uk/hmrc-internal-manuals/employment-status-m... - 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.
[+] [-] IanCal|9 years ago|reply
* Give them basic rest breaks
* Give them basic holiday
* Pay them the minimum wage
Remember, they're not employees, they're workers.
[edit - I'd be very interested to know why this is downvoted, these are the things afaik that they are required to do for workers (who are distinct from employees)]
[+] [-] noir-york|9 years ago|reply
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|9 years ago|reply
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.
[+] [-] ryandrake|9 years ago|reply
Hard to imagine that basic income will be politically possible in the near or medium term. Our culture is so wrapped up in the idea of the necessity of jobs that I predict we will see government programs to pay 1/2 of the people to dig holes and the other 1/2 to fill them in, before we see basic income.
[+] [-] falcolas|9 years ago|reply
I believe that even truckers will be safe well into the next decade. They don't add all that much cost to the overall costs of shipping goods (when compared to fuel, maintenance, and insurance).
[+] [-] ChemicalWarfare|9 years ago|reply
you do realize that it's the "democrats" who are promising free stuff to the masses by "taking moar moneys from the evuhl 1%". Doesn't get much more divisive and populist then that.
So now on the "republican" side there is also some level of exploiting of the archetypal beliefs that can be considered "populism", such as the ubiquitous "wall on the border" but that carries very little targeted appeal to the unemployed or poor segment of the populace per se.
[+] [-] mckee1|9 years ago|reply
I assume their strategy for profitability now, in the UK at least, is just take VC money until driverless cars are legalised.
[+] [-] caractacus|9 years ago|reply
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.
[+] [-] thescriptkiddie|9 years ago|reply
[+] [-] chatmasta|9 years ago|reply
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.
[+] [-] dkhenry|9 years ago|reply
[+] [-] ascorbic|9 years ago|reply
[+] [-] chrischen|9 years ago|reply
[+] [-] IanCal|9 years ago|reply
[+] [-] nickjarboe|9 years ago|reply
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|9 years ago|reply
[+] [-] jacquesm|9 years ago|reply
30K people times a few years that really adds up.
[+] [-] ljf|9 years ago|reply
[+] [-] Eridrus|9 years ago|reply
[+] [-] ethanbond|9 years ago|reply
[+] [-] jylam|9 years ago|reply
[+] [-] anexprogrammer|9 years ago|reply
If they ultimately lose then Uber will be liable for backpay for the employees, backtax and possibly a fine.
[+] [-] FT_intern|9 years ago|reply
[+] [-] mcjiggerlog|9 years ago|reply
[+] [-] M2Ys4U|9 years ago|reply
[+] [-] johneth|9 years ago|reply
[+] [-] juandazapata|9 years ago|reply
[+] [-] ethanbond|9 years ago|reply
And hey, if they're only losing (not spending, losing) $600,000,000 per month, they've got what, at least another couple years of VC money to burn? I'm sure everything will be figured out by then.
[+] [-] phatfish|9 years ago|reply
It will be a long time before you see such cars on London streets, or anywhere without specifically designed lanes in fact.
All that cash they have accumulated is either going towards building a true driving AI that can mimic human decisions and not kill. Or it's being used to lobby/bribe governments to make their business model work while having to give compensation to drivers.
[+] [-] celticninja|9 years ago|reply
[+] [-] huhtenberg|9 years ago|reply
[+] [-] cnorthwood|9 years ago|reply
[+] [-] tomgp|9 years ago|reply
[+] [-] FussyZeus|9 years ago|reply
[+] [-] dazc|9 years ago|reply
Outside of London Uber doesn't have that much of a presence. And, where it does, the drivers are often regular private hire drivers using Uber as an extra form of revenue.
So exiting the UK isn't going to hurt them so much.
[+] [-] return0|9 years ago|reply
[+] [-] fiatjaf|9 years ago|reply
[+] [-] jacquesm|9 years ago|reply
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.
[+] [-] 2398cwidnjl|9 years ago|reply
The reality is that you have to meet a couple of criteria to avoid the "fake self-employment" laws, and the drivers don't.
You can work for a single client as a freelancer for extended periods of time, but you have to demonstrate that the project requires significant creative input and you're not just following orders (or a dispatch system in this case).
[+] [-] geofft|9 years ago|reply
[deleted]