Worker or Self Employed – The Uber Judgment

Background to Uber Decision

New ways of working organised through digital platforms pose pressing questions about the employment status of the people who do the work involved. The central question for the UK Supreme Court in Uber BV and others (Appellants) v Aslam and others (Respondents), was whether an employment tribunal was entitled to find that drivers whose work is arranged through Uber’s smartphone application (“the Uber app”) worked for Uber under workers’ contracts and so qualified for the national minimum wage, paid annual leave and other workers’ rights; or whether, as Uber contended, the drivers do not have these rights because they work for themselves as independent contractors, performing services under contracts made with passengers through Uber as their booking agent. 

It was Uber’s case that, in answering these questions, the correct starting point is to interpret the terms of the written agreements between Uber BV and drivers. Uber relies on the terms of written agreements which state that, when a request to book a private hire vehicle made through the Uber app is accepted, a contract is thereby created between passenger and driver, to which no Uber entity is a party and under which the driver is solely responsible for providing transportation services to the passenger.

Definition of Worker

The UK Supreme Court noted that, in determining whether an individual is a “worker”, there can, as Baroness Hale said in the Bates van Winkelh of “be no substitute for applying the words of the statute to the facts of the individual case.” At the same time, in applying the statutory language, it is necessary both to view the facts realistically and to keep in mind the purpose of the legislation.

The vulnerabilities of workers which create the need for statutory protection are subordination to and dependence upon another person in relation to the work done. A touchstone of such subordination and dependence is, as has long been recognised in employment law, the degree of control exercised by the putative employer over the work or services performed by the individual concerned. The greater the extent of such control, the stronger the case for classifying the individual as a “worker” who is employed under a “worker’s contract”. 

This approach is also consistent with the case law of the Courts of Justice of the European Union (CJEU) which treats the essential feature of a contract between an employer and a worker as the existence of a hierarchical relationship. In a recent judgment the Grand Chamber of the CJEU has emphasised that, in determining whether such a relationship exists, it is necessary to take account of the objective situation of the individual concerned and all the circumstances of his or her work. The wording of the contractual documents, while relevant, is not conclusive. It is also necessary to have regard to how relevant obligations are performed in practice (see AFMB Ltd v Raad van bestuur van de Sociale verzekeringsbank (Case C-610/18).

Gig Worker v Worker 

The UK Supreme Court held that the findings of the employment tribunal, which originally determined that the drivers were "workers", was justified, highlighting five specific reasons. 

Fixed Remuneration

First and of major importance, the remuneration paid to drivers for the work they do is fixed by Uber and the drivers have no say in it (other than by choosing when and how much to work). Unlike taxi fares, fares for private hire vehicles in London are not set by the regulator. However, for rides booked through the Uber app, it is Uber that sets the fares and drivers are not permitted to charge more than the fare calculated by the Uber app. The notional freedom to charge a passenger less than the fare set by Uber is of no possible benefit to drivers, as any discount offered would come entirely out of the driver’s pocket and the delivery of the service is organised so as to prevent a driver from establishing a relationship with a passenger that might generate future custom for the driver personally. 

Terms are Dictated

Second, the contractual terms on which drivers perform their services are dictated by Uber. Not only are drivers required to accept Uber’s standard form of written agreement but the terms on which they transport passengers are also imposed by Uber and drivers have no say in them. 

Limited Choice

Third, although drivers have the freedom to choose when and where to work, once a driver has logged onto the Uber app, a driver’s choice about whether to accept requests for rides is constrained by Uber. 

Degree of Control

Fourth, Uber exercises a significant degree of control over the way in which drivers deliver their services. The fact that drivers provide their own car means that they have more control than would most employees over the physical equipment used to perform their work. 

Personal Relationship

A fifth significant factor is that Uber restricts communication between passenger and driver to the minimum necessary to perform the particular trip and takes active steps to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride. 

Conclusion

Taking these factors together, the UK Supreme Court held that the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber, thereby establishing an employment relationship.