Down but Not Out! To Uber or Not to Uber – That Is the Question (with apologies to Shakespeare!)

To many people (especially in London), it’s a no-brainer – you are flying off to somewhere nice and sunny from Heathrow or Gatwick Airport, loaded to the gunnels with everything you, your partner and the kids are going to need for the holiday you’ve been dreaming of for the past year. And so, you’re going to start as you intend to carry on – going by taxi! Now what would you rather pay for the luxury (or is it a necessity for the sake of your sanity?) – as much as a discounted package holiday to Spain all by itself or, say, £50? The former would mean taking a London black cab or a local-hire company taxi, whilst the latter would mean simply getting an Uber through a smartphone app whilst enjoying a cup of coffee in your favourite armchair.

So what’s the problem? Everything seemed to be going exceedingly smoothly (so far as passengers were concerned) until 2015, when two Uber drivers took the company to an Employment Tribunal (ET) under the Employment Rights Act 1996 Part II (ERA 1966), read in conjunction with the National Minimum Wage Act 1998 and associated Regulations, for failure to pay the statutory minimum wage, and also under the Working Time Regulations 1998 for failure to provide paid holiday, maternity or paternity leave. Again – what’s the problem? Well, it’s basically a threefold one: passengers in general are in favour of Uber drivers, black cab taxi drivers are against Uber drivers and Uber drivers are claiming that they are being treated unfairly by Uber itself!

How does one take an Uber? Basically, a customer who has signed up with Uber to use their services, which involves them providing Uber with their credit card and other details, uses a mobile app to contact Uber for a taxi. Uber then contacts a driver who would either accept or reject the proposed journey (if they rejected it, Uber would contact another one, and so on). The customer’s credit card would automatically be debited with the fare (which the customer agrees with the driver), and Uber would take a percentage of it and credit the driver with the balance. Uber drivers have their own taxis and pay all their own expenses and the tax on their earnings and can work whatever hours they want. Uber would then provide them with work on an ad hoc basis. The drivers would give the passenger an estimate of the fare, which could be accepted, declined or bargained for. 

Obviously, the passenger is in a better position vis-a-vis a black cab taxi because Uber drivers’ fares are generally considerably cheaper, and thus passengers are generally delighted with the whole idea. On the other hand, black cab drivers are not pleased by this setup because they (in order to be licensed) have to pass a very stiff theoretical and practical test known as “the knowledge,” by which they have to prove that they know the whereabouts of every street in the city (what about sat-nav, though?) and are also rigorously regulated. They say they are losing money as a result of Uber’s success, so they are not happy bunnies! So Uber drivers should be happy, yes? No! Uber claims that they do not have any workers’ rights because Uber treats them as self-employed individuals (meaning they do not work for Uber), whereas the drivers are claiming that they are not self-employed (nor independent contractors – same thing!) and that they should therefore be entitled to the rights of employees under the Employment Acts and Regulations.

Their application to the Employment Tribunal was successful. The ET found that they were indeed employees under the ERA 1966. The UK has three categories of employment: contractors, workers or employees. Workers receive more protection than contractors, but fewer than employees. Employment law can be tricky when it comes to working out who is who under these categories. If you can answer yes to the following questions, then you are most likely an employee: “Do you have to do the work that you have agreed to do yourself?” “Can someone tell you what to do and how you do it?” “Are you paid so much per hour, week, month?” “Can you get overtime pay?” “Are you required to work set hours or a given number of hours per week?” “Are you expected to work in a set place?” If you can’t answer yes to these questions, or most of them anyway, then you are most probably a worker (more rights than a contractor but less than an employee).

Uber unsuccessfully appealed to the Employment Appeals Tribunal (which handed down its reserved reasons for its judgment quite recently) and has indicated that they would appeal to the Court of Appeal and, indeed, to the Supreme Court if necessary. So, as it stands at the moment, Uber is down but certainly not out! The full title of the original Tribunal case is Aslam & Farrer and others v Uber BV and others 2202551/2015. The case can be found at… and is worth reading, as it puts the whole concept of employment in an understandable context.

If Uber’s further appeals are turned down, then we may see the end of Uberisation – as far as taxis are concerned anyway!