Greater protection for Uber drivers not all it seems
Elizabeth Maxwell, May 04, 2017
Uber announced new insurance to protect drivers, but does it go far enough to protect Uber in court?
"The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous" said the Employment Tribunal last October when reaching its decision that James Farrar, Yaseen Aslam and 19 other drivers were workers and not self-employed as Uber claimed.
The drivers argued that they were employed by the San Francisco-based firm rather than working for themselves. Uber said they were self-employed contractors offering their services to passengers via its app. The tribunal disagreed and in a scathing judgment against Uber said: "We are satisfied that the supposed driver/passenger contract is a pure fiction that bears no relation to the real dealings and relationships between the parties."
As workers the drivers are entitled to receive the minimum wage, holiday and sick pay, rest breaks, and an employer contribution into an auto-enrolment pension scheme. It could cost the company millions.
Not surprisingly Uber is appealing the decision and will continue to argue that it is a technology company, not a transport provider. Gaining the right to appeal will delay the need for Uber to make any significant changes to its business model and its drivers will be engaged on the same 'self-employed' basis until then. All the while Uber is working hard to prepare compelling arguments to overturn the tribunal’s decision.
Last week the company also announced a new scheme aimed at protecting its drivers. It works on the basis that provided a driver has completed a trip in the last six weeks, made more than 500 trips on the Uber app, and pays a weekly £2 premium they will be covered if they are unable to work because of unforeseen circumstances such as illness, injury or jury duty. Uber is said to be subsidising the remaining cost of the benefit for eligible drivers, which is valued at £8 a week.
The scheme is operated by IPSE, a company that provides independent contractors, consultants and self-employed individuals across the UK with support and protection. Uber drivers will have the choice of signing up to it, but no doubt when they do Uber will argue that they are reaffirming their self-employed status.
The question of status
The tribunals seem only too ready to look behind the written contract between the parties to see what the reality of the situation is. The past year has seen a wave of challenges to companies that engage individuals in the so-called ‘gig’ economy. Pimlico Plumbers, City Sprint, and Excel Couriers are some of the big names that have hit the headlines and come under scrutiny. It’s thought that a group action against Deliveroo is waiting in the wings.
The reccurring theme coming out of these cases is that tribunals are taking time to explore the true nature of the working relationship. They are looking a variety of factors to establish employment status, including:
- The level of personal service and the genuine unfettered right to appoint a substitute
- The obligation on the employer to provide work and the obligation on the individual to accept it
- Who controls what is done and how it is done
- Who provides and maintains the tools or equipment used
- The degree of financial risk adopted
- The degree of investment in and management of the business
- Whether the individual has the opportunity to profit from their own good performance
- Whether the person is paid a fixed wage or salary
- Whether the person is paid when absent due to holiday or sickness
- Integration into the business
In the Uber case drivers said they were under tremendous pressure to work long hours and accept jobs. There were repercussions if they cancelled a pickup. Uber set the default route for each trip and drivers faced fare deductions if they departed from that route. It also fixed the fare.
If Uber is looking to overturn the tribunal’s decision in the Autumn it is going to have to come up with something far more compelling than an optional insurance policy, which a judge will no doubt scrutinise with the same level of scepticism.
Elizabeth Maxwell is a solicitor at Thomson Snell & Passmore