Uber is reviewing how it treats thousands of drivers in the United Kingdom after the Supreme Court upheld a ruling that they should be classified as workers and not independent contractors.
The unanimous decision could deliver a major blow to the company’s business model in one of its most important markets, and opens the door for drivers to claim the minimum wage and paid time off, legal experts said. The court said Friday that the group of Uber drivers that brought the case to an employment tribunal were not independent contractors because their activities were « very tightly defined and controlled by Uber. » The judge cited the company’s control over fares and how it dictates the contractual terms on which drivers perform their services. While the practical effects of the ruling are not yet clear, the decision could change how Uber (UBER) does business in the United Kingdom. The next step is for an employment tribunal to decide how to compensate dozens of claimants. Uber shares were down 2.5% premarket in New York. The case may also set a precedent for other workers and companies in the broader gig economy, which has thrived during the pandemic due to a sharp increase in demand for food deliveries and other services. The suit against Uber was first filed in a British employment tribunal by Yaseen Aslam and James Farrar in 2016 when the two men were driving for Uber. Aslam used to work for another company, but said he was lured to Uber by lucrative pay and bonuses. But Aslam claimed the perks quickly dried up as more drivers joined the platform, resulting in fewer rides and lower fares. The pair of drivers prevailed in the employment tribunal and then in two subsequent appeals by the company. Aslam told CNN Business on Friday that the compensation he stands to gain is « small » compared to the effort that was required to bring the suit.
