Uber, which has 65,000 active drivers in the UK, had argued that the two drivers who brought the case were independent contractors
The ruling could also affect other online platforms behind the so-called gig economy in Britain – people doing short-term work without formal contracts, or working without guaranteed hours. The Uber application is seen on a mobile phone in London, Britain, September 14, 2018 (Reuters) Uber drivers in Britain should be classed as “workers” and not self-employed, the UK Supreme Court has ruled, in a decision that threatens its business model and holds broader implications for the so-called gig economy.
The ruling on Friday entitles Uber drivers to benefits such as paid holidays and the minimum wage, handing defeat to the ride-hailing giant in the culmination of a long-running legal battle.
The Supreme Court's seven judges unanimously rejected Uber's appeal against a lower court ruling, which had found that two Uber drivers were “workers” under British law.
“The employment tribunal was right to find that Uber drivers are workers who therefore qualify for the rights conferred on workers by employment legislation,” said judge George Leggatt, as he read out a summary of the ruling on a court livestream.
Among their reasons, the judges cited Uber's driver rating and its practice of keeping communications between drivers and passengers to a minimum, which results in the service being “very tightly defined and controlled by Uber.”
“Drivers are in a position of subordination and dependency to Uber,” with little ability to improve their economic position.
They only way to increase their earnings is by “working longer hours while constantly meeting Uber's measures of performance,” the court said.
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The ruling could also affect other online platforms behind the so-called gig economy in Britain – people doing short-term work without formal contracts, or working without guaranteed hours.
The decision was “another nail in the coffin” for the gig economy, tweeted Rix.
Couriers for the Deliveroo food app are currently fighting in the Court of Appeal in London for the right to collective bargaining.
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Uber respects decision
Uber claimed that it has changed the way it works since the legal action began.
Drivers can now choose when and where they drive and can also access free health insurance as well as compensation for parental leave, it said.
Ahead of the court ruling, Uber vowed to increase protection for drivers while keeping them self-employed.
Uber chief executive Dara Khosrowshahi on Monday presented a series of promises to European governments and trade unions.
He said the aim was to offer a transparent and fair pay structure, and more benefits to drivers.
Uber is calling for companies in the sector to form a joint fund that would allow drivers who work for different apps to be able to access protections and benefits such as paid holidays.
Uber plans to replicate in Europe proposals it first made in California, after a court in the US state ordered the platform to classify its tens of thousands of drivers as employees.
But voters in November then backed Proposition 22, a measure designed by Uber and other gig companies that would mean drivers remained independent contractors while receiving some benefits.
Friday's decision is not expected to affect Uber's right to operate in London, which has been subject to a separate dispute.
Uber, which has 65,000 active drivers in the UK, had argued that the two drivers who brought the case were independent contractors.
The company said it respected the court's decision, which it argued focused on a small number of drivers who used the Uber app in 2016.
“Since then we have made some significant changes to our business, guided by drivers every step of the way,” Jamie Heywood, Uber’s Regional General Manager for Northern and Eastern Europe, said in a statement.
“These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.”
Shares in Uber were down by more than 3 percent in premarket trading in New York.
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Source: TRTWorld and agencies