Supreme Court rules that Uber drivers are workers not self-employed

3 min reading time

Published on 04/03/21 - Updated on 17/03/22

Uber drivers are workers

The UK's Supreme Court has ruled that Uber drivers must be treated as workers rather than self-employed. The decision could mean thousands of Uber drivers are entitled to minimum wage and holiday pay.

The ruling could leave the ride-hailing app facing a compensation bill and have wider consequences for the gig economy. Uber said the ruling centred on a small number of drivers and it had since made changes to its business.

In a long-running legal battle, Uber had appealed to the Supreme Court after losing three earlier rounds. Uber's share price dipped as US trading began on Friday as investors grappled with what impact the London ruling could have on the firm's business model. 

Uber has argued that it is a booking agent, which hires self-employed contractors that provide transport. By not being classified as a transport provider, Uber is not currently paying 20% VAT on fares. The Supreme Court ruled that Uber must consider its drivers "workers" from the time they log on to the app, until they log off. This is a key point because Uber drivers spend time waiting for customers to book rides on the app. Previously, the firm had said that if drivers were found to be workers, then it would only count the time during journeys when a passenger is in the car.

Mr Aslam, who claims Uber's practices forced him to leave the trade as he could not make ends meet, is considering becoming a driver for the app again but he is upset that the ruling took so long. 

Will we pay more for Uber rides? That remains to be seen, but it could potentially happen. When Uber listed its shares in the United States in 2019, its filing with the US Securities and Exchange Commission (SEC) included a section on risks to its business.

The company said that if it had to classify drivers as workers, it would "incur significant additional expenses" in compensating the drivers for things such as the minimum wage and overtime. "Further, any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition," it added.

Uber also wrote in the filing that if Mr Farrar and Mr Aslam were to win their case, HM Revenue & Customs (HMRC) would then classify the firm as a transport provider, and Uber would need to pay VAT on fares. HMRC and Uber are still in dispute about the firm's VAT liability.

Tom Vickers, a senior lecturer in sociology at Nottingham Trent University, studies the jobs that people do and how they change over time and thinks the Supreme Court's ruling has wider implications for a lot of other gig economy workers like other private hire drivers, couriers and delivery drivers.

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