UK top court: Uber drivers entitled to worker benefits

Ruling could have far-reaching implications for companies who rely on gig employees

LONDON — Uber drivers in Britain are entitled to benefits like paid holidays and minimum wage, the country’s top court ruled Friday, in a decision that threatens the company’s business model and holds broad implications for the gig economy.

The ruling that the drivers should be classed as “workers” and not self-employed is a big defeat for the ride-hailing giant. And it could inspire similar legal action against other companies who rely on gig workers as well as influence courts in other countries grappling with the issue, experts said.

The seven Supreme Court judges who heard the case unanimously rejected Uber’s appeal against an employment tribunal ruling that two

Uber drivers were “workers” under British law.

Yaseen Aslam and James Farrar, the two drivers, cheered the outcome.

“This ruling will fundamentally reorder the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery,” said James Farrar said by email. The pair took Uber to the tribunal in 2016, which ruled in their favor. The decision was upheld in two rounds of appeals before it arrived at the Supreme Court.

San Francisco-based Uber, which has 65,000 active drivers and 5 million regular users in the U.K., had argued that Aslam and Farrar were independent contractors. The company said it respected the court’s decision, which it argued focused on a small number of drivers who used the Uber app in 2016.

“Since then we have made some significant changes to our business, guided by drivers every step of the way,” Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, said in a statement. “These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.”

The ruling clarified that drivers are considered to be on the job when they are logged in to the Uber app in their territory and ready and willing to accept rides, which could be used to calculate minimum wage and holiday pay. Uber had argued that drivers were only working when they were making a journey with a paying passenger.

The case is now expected to return to the employment tribunal for decisions on compensation over lost pay for about two dozen drivers involved in the original claim. Another 2,000 drivers’ cases had been stayed pending the decision.

Uber and other app-based ride-hailing services avoided a similar attempt in California. The companies bankrolled Proposition 22, a ballot measure exempting them from the state’s gig-economy laws by keeping drivers classified as independent contractors able to set their own hours. Voters approved it in November.

The British judges on Friday cited a number of factors in their decision: Uber sets fares and contract terms and penalizes drivers who reject or cancel rides. It also uses passenger ratings to control drivers and minimizes communications between drivers and passengers, which results in the service being “very tightly defined and controlled by Uber.”