UBER HIT WITH NEW BLOW IN LONDON AS PANEL SAYS DRIVERS AREN’T SELF-EMPLOYED

>> LONDON: Uber suffered another setback in its biggest market outside the United States on Friday when an employment tribunal in London rejected the ride-hailing company’s argument that its drivers are self-employed.

The decision, which affirmed a ruling issued last year, means that Uber will have to ensure that its drivers in Britain receive a minimum wage and paid time off. That creates problems for a common hiring model in the so-called gig economy that relies on workers who do not have formal contracts.

Companies argue that using such a model increases flexibility on both sides of the hiring equation, but critics counter that the system is exploitative and deprives employees of important safeguards like unemployment insurance.

The ruling on Friday was the second blow to Uber’s business here in recent months. In September, London’s transport authority barred the company from operating in the British capital.

In the case before the employment tribunal, two men, James Farrar and Yaseen Aslam, had challenged Uber on behalf of a group of 19 drivers, saying that the service had denied them basic protections by classifying them as self-employed. Uber countered with an argument it has used around the world: Its drivers were independent contractors.

“You can hide behind technology, but the laws are there, and they need to be obeyed and respected,” Mr Aslam said in an interview after the tribunal issued its decision. “The impact of this ruling could affect thousands of drivers, and not just drivers but millions of workers across the UK.”

The acting chief of Uber’s British operations, Tom Elvidge, said the company would appeal the decision, either to the Court of Appeal or to Britain’s Supreme Court.

As part of its push to win over customers and drivers concerned about Uber’s reputation, the company has introduced new measures and services, including allowing users to add tips to fares. Uber has also promoted its efforts, particularly in Britain, to provide drivers with benefits like access to insurance and pensions.

“Essentially, it has been outrunning employment law and legislators,” said André Spicer, a professor at City University’s Cass Business School in London. “It’s having to become more like a normal company, rather than one that was able to evade existing legal frameworks.”

Uber’s operations in London are crucial to its global expansion. The company started operating in the city in 2012, and now offers its services in dozens of cities nationwide. About 40,000 people drive for Uber in the British capital, and the company says that three million customers have used the app in London at least once in the past three months.

Uber’s arrival in London has, however, set off a clash with the city’s famous black cabs. A ride in a black cab is typically far more expensive than using Uber, which cabbies complain is too lightly regulated.

Opponents of Uber argue that it can undercut rivals on price due to its employment practices, meaning it can avoid paying some costs required by permanent employees. But the company is facing challenges across Europe. The region’s highest court is expected to rule by year’s end in a case involving whether Uber should be regulated as a taxi service or as a digital platform that connects independent drivers and passengers.