Uber Lyft driver protests AB-5

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Uber suffered a significant defeat on Friday after the UK’s top court ruled its drivers are workers, rather than independent contractors, entitling them to certain rights.

To date, the company has relied on classifying drivers as contractors to avoid massive costs such as a minimum wage and holiday pay, and also certain taxes. Uber has depended on this model in multiple countries and warned in its IPO filing in 2019 that treating drivers otherwise would hurt its business. It flagged the UK case, and cases elsewhere, as ongoing risks.

The UK ruling means British drivers can claim up to two years’, or £25,000 worth of minimum wage back pay via an employment tribunal, and up to six years’ back pay in county courts, according to analysis by Daniel Barnett, an employment law barrister. Additionally, they can claim up to 5.6 weeks of paid annual leave.

Uber was quick to claim that the ruling only immediately applies to the small group of drivers who brought the case. It also said the ruling was highly specific to the way Uber’s business worked back in 2016, when the drivers initially brought their case, and that the business has since changed.

However, tens of thousands of drivers may test Uber’s resolve here through employment tribunals. Thousands of drivers are set to bring claims against the firm, The Guardian reported on Monday.

And Uber did acknowledge the potential severe impact of the ruling. Lawyers likewise say the decision could have implications for the gig economy more broadly.

Here are four takeaways for Uber and gig economy firms operating in the UK such as Uber Eats, Deliveroo, and Estonia’s Bolt:

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European judges and regulators do not like regulatory ‘disruption’

My official case summary:

Uber: We do not provide transport services to anyone. All we do is help connect people who want lifts to people with cars. Look, that’s what all our contracts say.

The Supreme Court (and everyone else who has ever used Uber): Don’t be silly.

— Ian Browne (@ianjbrowne) February 19, 2021

Insider’s Jim Edwards has previously argued that Uber’s business is based on regulatory arbitrage or regulatory disruption — circumventing the law in the hope that local regulators do nothing about it.

Uber has long argued that it doesn’t provide transportation services in order to justify its drivers’ contractor status — despite the fact that your average Uber passenger understands that they are getting into an Uber cab, which has been directed to them by Uber’s app.

Friday’s ruling implies judges and regulators in Europe do not like this kind of sophistry.

Supreme Court justice Lord Leggatt wrote in his ruling:

“Uber argues … that the drivers were performing their services under contracts made with passengers through the agency of Uber London and not for or under any contract with any Uber company.”

 He argued that Uber can’t be permitted to control the description of its drivers through its contracts because:

“To do so would reinstate the mischief which the legislation was enacted …read more

Source:: Business Insider


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