The future for both Uber and Lyft in Great Britain is looking less and less bright by the month. Even as the nation lurches toward a No Deal Brexit with worries about an economic downturn to follow, the courts there have continued to hand one defeat after another to the gig economy and the jobs it provides. The latest example of this showed up yesterday when the second highest court in the U.K. ruled in favor of two Uber drivers who claimed that they should be treated as employees of the ride-sharing data service rather than independent contractors. (CNBC)
Uber lost an appeal against a landmark 2016 ruling that the ride-hailing firm should treat its U.K. drivers as workers entitled to benefits like a minimum wage and holiday pay.
A judge at the U.K.’s Court of Appeal, the second-highest court in the land, ruled in favor of Uber drivers James Farrar and Yaseen Aslam, who in 2016 argued at an employment tribunal that they were employees working for the company, rather than self-employed.
Uber argues that its drivers should be treated as self-employed — much in the same way that most traditional taxi drivers are — rather than workers directly employed by the company.
The motivation for the case was rather obvious. The two drivers were supported in court by the Independent Workers Union of Great Britain (IWGB). That union represents a variety of low-income workers, but in this case, they are squarely aligned with the London Black Cabs and their union, the traditional cab service that’s been hardest hit by the arrival of ride-sharing services.
The differences between the two companies are obvious and should have been to the courts, but they’ve clearly chosen to ignore those basic facts. The Black Cabs actually employ drivers to operate their vehicles and have to compensate them accordingly. The workers have regular schedules to follow and all the other benefits and constraints which come with an employer-employee relationship.
In contrast to that, Uber and Lyft drivers use their own vehicles to pick up riders, arranging their engagements through the use of the company’s app. They decide if and when they will work, which customers to pick up and how many hours they put in. They pay their own insurance and in all other regards, operate as private owner-operators. The two drivers bringing this suit are also suspect because actual Uber drivers aren’t going to sue the company for benefits because they know (or certainly should know) that such a “victory” would put Uber out of business and terminate their opportunity to work in that fashion.
Still, the government is on the side of the Black Cabs and the courts are clearly looking out for them. Will this spell the end of Uber and Lift in Great Britain? If they have to start paying full wages and benefits to all their drivers that’s the most likely scenario. That’s not how Uber works and their profit margins don’t allow for such a relationship. And that’s precisely what the traditional cab companies who can’t deliver the level of service that Uber does are counting on.