March 6, 2021

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Uber’s Supreme Court loss has colossal implications for the UK’s gig economy

2 min read

Uber drivers must be treated as workers, the UK’s Supreme Court has ruled, much to the dismay of the ride-hailing app which has spent five years trying to convince the courts they’re independent contractors.

While the ruling has significant implications for the estimated 65,000 drivers working for Uber in the UK – namely entitling them to rests, national minimum wage and holiday pay – it will also send shockwaves through the UK’s wider gig economy, which an estimated 5m people work in.

Businesses including Uber’s rival driving apps Bolt and Ola could either be forced to factor in the additional costs now associated with the people who carry out their services or to reconsider their entire business models to allow them to retain self-employed status.

This could spell an end to the incredibly cheap rides that have become Uber’s calling card and increase the price of deliveries in a knock-on effect passing it down to the consumer.

The GMB Union and workers rights groups are hailing the ruling as a victory, pointing out that it will provide Uber’s drivers with better workplace protections and gift them the right to file discrimination claims against their employer for the first time.

While the gig economy has flourished in the UK over the past decade, driven by a proliferation of app-driven on-demand businesses that give their riders or drivers the flexibility to choose when and where they work, that same freedom represents a double-edged sword that unions have declared exploitative as employees are still at the mercy of the ebb and flow of user demand.

The Supreme Court’s ruling will have a bearing on all future cases in the UK linked to the gig economy, quashing Uber’s protestations its business model prioritises driver welfare and opening the company up to pay outs likely to spiral into the tens of millions.

Leigh Day, the law firm representing the drivers on behalf of GMB, said it believed tens of thousands of dricers could be entitled up to an average of £12,000 each in compensation, which is likely to be sought through a class action.

Uber said it “respected” the Court’s decision and that it would “consult with every active driver across the UK to understand the changes they want to see”.

It also claimed the verdict did not reclassify all UK drivers as workers, claiming it “only focused on the small group of drivers who brought the claim at a 2016 employment tribunal, many of whom no longer drive on the app”.

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