Uber classifies drivers as workers after Supreme Court ruling

Ride-hailing firm Uber has agreed to pay its UK drivers the minimum wage, but only for the time they are assigned to trips, rather than, as the Supreme Court explicitly ruled, from when they log in to the app.

On 19 February 2021, the UK Supreme Court ruled that drivers should be classified as workers rather than self-employed individuals, giving Uber’s roughly 70,000 drivers the right to be paid the national minimum wage, to receive statutory minimum holiday pay and rest breaks, as well as protection from unlawful discrimination and whistleblowing.

Following an announcement from Uber, drivers will now receive holiday pay equal to just over 12% of earnings every two weeks, and are entitled to automatic enrolment in a workplace pension scheme.

Uber also said drivers would now earn at least the National Living Wage – £8.72 an hour – but added that this would only apply “from the time you accept a trip on the app to the point at which the trip completes”.

However, according to the Supreme Court judgment – which upheld the ruling of a 2016 employment tribunal that Uber was attempting to appeal – drivers are “workers” from the minute they log in to the app to the minute they log off, which means they should be paid from when they become active, not just when passengers are on board.

“On the facts of the present case, a driver’s place of work is wherever his vehicle is currently located,” the judgment said. “In the light of this case law, the tribunal was justified in finding that all time spent by a driver working under a worker’s contract with Uber London, including time spent ‘on duty’ logged onto the Uber app in London available to accept a trip request, is ‘working time’.”

In response to the payment offer, Yaseen Aslam and James Farrar – former Uber drivers who led the legal action against the company and are founders of the App Drivers and Couriers Union (ADCU) – said in a statement that although they welcomed Uber’s decision, “they have arrived to the table with this offer a day late and a dollar short”.

They added: “The Supreme Court ruled that drivers are to be recognised as workers with entitlements to the minimum wage and holiday pay to accrue on working time from log on to log off, whereas Uber is committing only to these entitlements to accrue from time of trip acceptance to drop off.

“This means that Uber drivers will be still short-changed to the tune of 40-50%. Also, it is not acceptable for Uber to unilaterally decide the driver expense base in calculating minimum wage. This must be subject to collective agreement.”

Aslam previously told Computer Weekly that Uber’s business model relied on flooding the platform with drivers, producing shorter waiting times for customers, but creating a situation in which drivers – who were only being paid while a passenger was on board – had to wait around longer for jobs to come in.

The ADCU statement added: “While Uber undoubtedly has made progress here, we cannot accept anything less than full compliance with legal minimums. We would also expect to see Uber make progress towards trade union recognition, a fair dismissals appeals process and a data access agreement.”

On Twitter, Farrar said the ADCU would not accept Uber’s “below legal minimums offer”, adding that there will be further legal challenges and that “Uber must accept the Supreme Court ruling and pay for all hours logged in, not just time on trip”.

Computer Weekly has not yet received a response from Uber about why it decided to pay drivers only when assigned a trip rather than when logged on, as stated by the court.

In a separate response to Uber’s announcement, Alex Marshall, president of the International Workers Union of Great Britain, said Uber had been “forced into a corner” by drivers and the only way out was to give them what they are legally entitled to.

“There is more that needs to be done for Uber to comply with the law,” he said. “But this will send shockwaves across the gig economy and sets a precedent to end the exploitative practices synonymous with the likes of Deliveroo, Bolt, Addison Lee and others.

“This is a big step in the right direction and shows what can be achieved when workers come together and fight for what is rightfully theirs.”

In a filing to the US Securities and Exchange Commission on 16 March 2021, Jamie Heywood, Uber’s regional general manager for northern and eastern Europe, said: “This is an important day for drivers in the UK. Uber drivers will receive an earnings guarantee, holiday pay and a pension, and will retain the flexibility they currently value.

“Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives.”

Writing in the Evening Standard on 17 March, Uber CEO Dara Khosrowshahi framed the company’s changes in drivers’ pay and benefits as a choice, rather than the result of a legal battle it had contested at every stage.

“Our thinking on this issue [of drivers’ employment status] has evolved over time, and I will be the first to admit that we’ve struggled to identify solutions that work for Uber and for those who earn on our platform,” he said.

“Following last month’s UK Supreme Court ruling, we could have continued to dispute drivers’ rights to any of these protections in court. Instead, we have decided to turn the page.”

Khosrowshahi added: “We are making the choice to do this, but of course we are not the only player in town. Many drivers work with several private-hire operators at the same time. It makes no sense that they should enjoy the protections of worker status on one trip, but lose them on the next. I hope our competitors, who are engaged in their own legal battles, will rethink their approach and join us in taking this step.”

Law firm Keller Lenkner, which is working with the ADCU and representing more than 9,000 drivers in a group litigation action against Uber, has calculated that each driver could claim back between £10,000 and £12,000 in compensation following the Supreme Court’s ruling.

“We are clearly pleased to see that Uber is purporting to accept that drivers should be treated as workers,” said Andrew Nugent Smith, Keller Lenkner UK’s managing director. “It is disappointing, though, that the minimum wage will only be paid when drivers are on jobs and not also when they are on the Uber app waiting to be allocated a job.

“This may well lead to further litigation in due course. It also remains to be seen on which basis Uber will compensate drivers for historic holiday pay and minimum wage entitlements, although we hope to open a dialogue with Uber on this in the near future.

“If matters cannot be resolved to our clients’ satisfaction, we will have no option but to progress the claims we have already commenced in the High Court and Employment Tribunal.”