Bumpy roads
Reprieved on drivers’ rights after court battle in the US, Uber is now facing a fight on two fronts in the UK
A RULING in California over whether to force Uber to reclassify drivers as employees had been expected to set the tone for what will be a gruelling few months for the ride-hailing firm.
Following a temporary reprieve, which pushed a decision on employment rights back until November, Uber’s attention will have to swiftly turn to pressures in Britain.
In the UK, Uber is facing a reckoning on two fronts. It is weeks away from a battle against Transport for London over a decision not to renew its licence. That appeal centres around claims Uber is not a “fit and proper” operator.
Next month, the company also hopes to find out if its appeal at the Supreme Court, over how it classifies drivers in Britain, has been successful.
Steve Garelick, regional organiser at the GMB union, says if Britain’s highest court rules against Uber, the firm would not be in such a strong position as it is in the US, to pile on pressure and buy more time.
“With the advent of Bolt, Kapten and Ola as well as traditional operators and of course the traditional taxi service that London is famed for, there are many other options for drivers and the travelling public,” he says.
“I suspect Uber has billed itself as too big to fail or fall, but just as we have seen with Woolworths, Comet, Tie Rack, Compaq and others, no organisation is infallible or too big to lose their market to others.”
Change could be coming. It is not just the courts that Uber has to contend with. Among drivers, there is a consensus that ride-hailing firms should be offering them more worker rights.
Last year, Uber drivers in the UK joined thousands around the world on strike against what they called “poverty pay”. The criticism is not just being levelled at Uber. Lyft, too, is facing pressure to address drivers’ rights – particularly right now when the Covid-19 pandemic is hitting people’s pockets.
To top up his wages earned from working on security at Paypal, Edan Alva, 50, would turn on the ridesharing app Lyft on his journey to work to pick up passengers along the way so he could commute and earn money at the same time. When he lost his job in May 2018, Lyft became his primary source of income, earning $900 (£685) a week on the app at its peak. But without health insurance, sick pay and overtime, the expenses of driving as the pandemic struck California became too much.
“During coronavirus I was earning less than $5 an hour after buying cleaning and personal protective equipment … I was losing money,” he says.
Alva is not alone. This week, hundreds of ride-share drivers in California, Uber and Lyft’s largest market, marched in San Francisco to
‘I suspect Uber has billed itself as too big to fail, but just as we have seen with others no one is infallible’
protest at Uber’s refusal to classify its drivers as employees, granting them basic rights like overtime, sick pay and insurance.
Both companies argue that drivers want the flexibility that comes with an independent contractor status, and that they cannot afford to give workers the benefits they are entitled to as employees.
In many regions, though, these arguments are meeting growing incredulity.
In the UK, there have already been three rulings against Uber, finding that the 35 Uber drivers involved in the case are not independent contractors and should receive more worker rights.
The Supreme Court is expected to make its decision on the case around late September. Unlike in California, where Uber was facing having to immediately re-categorise its drivers as employees, the Supreme Court decision will likely be more complex, and only apply to those 35 drivers in the case – although it will set a legal precedent.
Uber and Lyft say that it would be impossible for them to change their business model to build in flexibility and benefits. They say this will make prices higher and mean they will have to cut drivers, meaning it will be difficult to hail taxis.
Despite appearances, the emergency reprieve in California is only buying time.
“The court is holding Uber’s feet to the fire by requiring that they submit implementation plans by September.
“If they don’t do this, it seems more likely that the stay will be dissolved and they will have to comply,” says William B Gould IV, emeritus professor at Stanford Law School.
More immediately, in Britain, time is not on Uber’s side. In just a few weeks, it will hear a decision that could banish it from one of its most successful and profitable markets, and a ruling that could change its relationship with drivers.
Uber may have experienced a brief victory this week. But here in the UK, it may not be so lucky.