back to article GMB tests Uber 'self-employed drivers' claim at London tribunal

UK union the GMB has brought two test cases to the Central London Employment Tribunal today to determine if Uber acted unlawfully by not providing its drivers with “basic workers’ rights”, such as holiday pay and a national minimum wage. This is the first time that Uber's claim that drivers are self-employed has been tested …

  1. Anonymous Coward
    Anonymous Coward

    I don't understand how they can be guaranteed minimum wage when they are free to choose as many or as few fares as available.

    Unless they are forced to take every fare presented and work set hours (which goes against the flexibility of being an Uber driver I presume) then how can this be correct?

    If they are paid a set wage and Uber keeps any profits made and every has stringent targets that they have to achieve then this isn't really what drivers who sign up to Uber expect, surely?

    1. Alfred

      "I don't understand how they can be guaranteed minimum wage"

      They're not.

    2. Anonymous Coward
      Anonymous Coward

      I don't understand how they can be guaranteed minimum wage...

      ...when they are free to choose as many or as few fares as available.

      Because the minimum wage is an hourly rate. It doesn't matter whether they work half an hour or 60 hours a week.

      Posting stupid? Post anonymous.

      1. Anonymous Coward
        Anonymous Coward

        Re: I don't understand how they can be guaranteed minimum wage...

        A lot of the Black cabs now have a sign "cash only", i bet they also claim they dont earn minimum wage

        How about all mini cab and taxi companies telling HMRC what jobs and fares drivers have taken and let the benefit office make up the difference based on minimum wage policy and tax credits.....bet most drivers would not like HMRC knowing that!!!

      2. Anonymous Coward
        Anonymous Coward

        @Alfred @AC

        "...to determine if Uber acted unlawfully by not providing its drivers with “basic workers’ rights”, such as holiday pay and a national minimum wage."

        GMB are trying to make sure Uber pay the minimum wage. My question was how that would be possible.

        "Because the minimum wage is an hourly rate. It doesn't matter whether they work half an hour or 60 hours a week."

        Yes I know it is, but an Uber driver doesn't have to do any fares. So are you (and the GMB) suggesting that they want Uber drivers to be paid minimum wage directly by Uber even if they don't pick up any actual fares? They just get paid for sitting in a cafe? Of course not. They would then have to start setting out performance targets and restrictions on which fares they had to choose, restrictions on doing other jobs etc - the drivers would lose their flexibility.

        1. Ragarath

          Re: @AC

          Yes I know it is, but an Uber driver doesn't have to do any fares. So are you (and the GMB) suggesting that they want Uber drivers to be paid minimum wage directly by Uber even if they don't pick up any actual fares? They just get paid for sitting in a cafe? Of course not. They would then have to start setting out performance targets and restrictions on which fares they had to choose, restrictions on doing other jobs etc - the drivers would lose their flexibility.

          I think you are confusing waiting for work as working. When you are waiting for work you are not employed. When you pick a fare from Uber that is when you are employed from until the drop-off surely?

    3. JimmyPage Silver badge
      FAIL

      Missing the point

      It has nothing to do with minimum wage, and everything to do with the relationship between Uber and it's drivers.

      If an Uber driver can also work for Lyft, et al then great. The driver really is self-employed.

      However, I suspect that somehow Uber will prevent Uber drivers from doing this - making the driver an employee and therefore protected (for now) by employment legislation.

      Calling employees "self-employed" is a well-known (especially to HMRC) trick to allow companies to shirk their responsibilities. It's also defrauding the revenue .....

      1. Preston Munchensonton

        Re: Missing the point

        If an Uber driver can also work for Lyft, et al then great. The driver really is self-employed.

        This is precisely the situation. Every Uber driver that I've encountered mentioned how they sit on both Uber and Lyft to maximize their earning potential.

        If Uber loses these cases and then chooses to shut down operating in the UK, UK cabgoers will lose far more than Uber will. The cab cartel has no legitimate competition for riders outside of the Tube, which really doesn't have the same overall market or footprint as the cab cartel, so it's apples-to-oranges comparison at best.

        1. sabroni Silver badge

          Re: If an Uber driver can also work for Lyft, et al then great. The driver really is self-employed.

          Why? Lots of people work more than one job, doesn't make them self employed.

          1. Yet Another Anonymous coward Silver badge

            Re: If an Uber driver can also work for Lyft, et al then great. The driver really is self-employed.

            It does if they can choose minute-minute who to work for.

        2. Loud Speaker

          Re: Missing the point

          This is complete rubbish. We still have black cabs (very tightly regulated) and minicabs - which mostly have the same technology as Uber anyway these days.

          The main difference in business model is that minicab drivers pay weekly "rent" to the cab office for their business, not a percentage of turnover. They are still required to have police checks, public carriage insurance and twice annual vehicle inspections, and the cab office is required to check that they do, every week.

          Uber's business model in the UK is to try to weazle word its way through the regulations to the maximum possible extent. And as a user, you risk paying more than even the black cabs would charge you.

        3. John Brown (no body) Silver badge

          Re: Missing the point

          The cab cartel has no legitimate competition for riders outside of the Tube,"

          Yes they have. There's the Tyneside Metro, The Glasgow Subway, Manchester Metrolink, Midland Metro, Nottingham Express, Sheffield Supertram and, of course Edinburgh Trams Of course none of these have stops or stations in London, so probably don't count.

          And then there's all the private hire companies. Maybe taxis are expensive in London and maybe your "minicabs" don't reach the standards of the provinces Private Hire companies so maybe Uber and Lyft are your only choices. Some of us have travelled around a bit and know that all places are not the same. On the whole London has a very good transport system, but it's shit in some respects.

    4. martin777

      What about the "tips"?

  2. Warm Braw Silver badge

    Care agencies seem to get away with it

    Carers typically stop being paid the moment they walk out of the client's door, get paid nothing for their travelling time or costs and start being paid only when they enter the door of the next client.

    This isn't so much a "gig" economy as a shredding of long-established employment rights that simply gets the government shrugging its shoulders. I suppose the Brexiteers felt they needed more flexibility in labour laws so that they can push the same conditions onto those supposedly employed full-time.

    1. GreggS

      Re: Care agencies seem to get away with it

      Actually, this has now changed. They have to be paid for travel time as well and it has to be included in minimum wage calculations and holiday pay;

      https://www.unison.org.uk/news/article/2014/06/unison-welcomes-travel-time-victory/

      and here;

      http://www.independent.co.uk/life-style/health-and-families/carers-mihomecare-settlement-minimum-wage-care-worker-landmark-legal-case-a6936406.html

      This was another way employers could avoid payment to not only their workers but The Inland Revenue.

    2. noboard

      Re: Care agencies seem to get away with it

      "I suppose the Brexiteers felt they needed more flexibility in labour laws so that they can push the same conditions onto those supposedly employed full-time."

      You're complaining that workers are getting shafted while we're under EU rule and then bitching that people voted out of such a system.

      *golf clap*

  3. NotBob

    In these parts, cab drivers aren't guaranteed set wages and are generally treated as independent contractors. Drivers pay rent on the cars and get dispatch service bundled in. Drivers keep fares collected.

    Uber seems to want to sell the dispatch service on its own...

  4. Jason Hindle

    Uber seems an odd test case

    My understanding: Uber drivers really can clock on and off as the please. On the other hand, outfits like Hermes want to provide Uber's T&Cs while still treating their "partners" like employees. Since common law tends to call a spade a spade, I think there are better test cases.

    1. Charlie Clark Silver badge

      Re: Uber seems an odd test case

      I think the problem is that it's great for Uber and passengers if there are lots of drivers. However, it's less attractive for the drivers as more of them are chasing a more-or-less constant set of fares: the more you work for Uber the less rewarding it is. Drivers who a year ago were making £15 an hour now find themselves earning around only £5 putting them in a Catch22 situation: should they drive more or get out of the game?

      The model seems to work well when additional marginal capacity is required: more drivers become available to take up the slack. In practice, as in other industries like power generation, this competes with the base capacity model and drives prices down. This is great until prices fall below costs, in which case the base capacity model collapses and, hence, the raison d'être for providing additional marginal capacity.

      Uber makes money whatever the situation. But it also sets the rates for the "market" and I think this is where there is a legal case that the contracts with drivers are effectively employment contracts because drivers have virtually no bargaining power.

      I wonder if it was situations like this that led to regulation in the first place? The UK should simply work on removing the synthetic distinction between taxis and private hire. This would create a more efficient market at a stroke and require everyone to improve their game. Licensing could then be used as it should be to prevent the worst abuses.

  5. Flocke Kroes Silver badge

    When Uber started ...

    The idea was that if I was going to drive somewhere I could tell Uber in advance and if someone else was going the same way I could pick them up, drop them off and get back some of the costs of the journey. The passenger gets a cheap ride, I get some petrol money and Uber takes their cut. All three benefit from the deal. The key points here are that driving is not my day job, and as I was making the journey anyway all the money I get is profit even if it doesn't even cover petrol.

    Some people started considering Uber as their day job and making journeys entirely at customer request. At this point everything has gone wrong. The driver needs commercial insurance, Uber should not send dispatch assignments without evidence of commercial insurance, and the price has to cover insurance, petrol, maintenance, driver time, and the journey between fares. Self employed or employee does not matter, but self employed has to charge extra to account for lack of sick pay and holidays.

    I have no problem with contractors not asking for enough money. They should either put up their prices or seek different contracts. I do have a problem with contractors agreeing to a contract then whining to a judge about lack of holiday pay. I also have a problem with Uber benefiting from their taxi dispatcher service while avoiding their responsibilities because they once pretended to be a ride sharing service.

  6. Dieter Haussmann

    I am self-employed and use ebay to sell my wares.

    I have only sold a few things this month.

    It works out at £0.11 per hour.

    Can I sue them?

    1. User McUser

      The difference is that Uber tells you "go to this location and take this person somewhere else" and if you don't do it, Uber will stop hiring you. They also set prices as they see fit.

      eBay pretty much does not care what you sell or to whom you sell it or even if you sell the item elsewhere before the auction ends so long as you operate within the law and pay them the listing fees. You are also free to set whatever price you like.

      1. DavCrav Silver badge

        "The difference is that Uber tells you "go to this location and take this person somewhere else" and if you don't do it, Uber will stop hiring you."

        Don't Uber offer jobs and you decide if you want to take them? That's how my local minicab company works: I've seen them accepting or declining the next job while they are finishing driving me somewhere.

        In this case, if you agree to drive someone somewhere and then don't, that's the same in your analogy to offering the eBay item, taking the money, then sending nothing, then refunding the person. Doesn't take too long before eBay would suspend your account doing that either, I guess.

    2. Troncmaster

      Are ebay telling you what to sell? If so, lawyer up.

      1. Known Hero

        Well Ebay said I cant sell human remains on there any more so kind of .....

        1. MyffyW Silver badge

          ...or previously worn foundation garments it would seem

  7. J.G.Harston Silver badge

    Uber are a taxi radio control centre, no more, no less, and should be licensed and regulated exactly the same as any other taxi radio control centre.

  8. Alan Denman
    FAIL

    This is an extremely important case..

    testing if the modern slavery of the self employment dodge of corporates is allowed

    1. Richard 12 Silver badge

      Re: This is an extremely important case..

      Not that important. It's one in a long line of cases against companies trying to claim that employees are contractors.

      UK law uses Duck-Typing. If it looks like a duck, it is a duck.

      If the person looks like an employee, they are.

      And the employer (in this case Uber) are then immediately required to pay the taxes (NI etc) that they have evaded, as well as that which they owe to the employees.

      They can also be held criminally liable for tax evasion.

      HMRC will be looking on with great interest.

      1. John Brown (no body) Silver badge

        Re: This is an extremely important case..

        "If the person looks like an employee, they are."

        Yep, even gov.uk got caught out by their own rules. Planning Inspectors in some (many?) cases were contractors whose only client was the Planning Inspectorate. When HMRC finally noticed, most of those contractors had to become employees (other than those who also did other consulting work, ie had more than one "client")

  9. Martin 47

    If your business, any business, relies on people earning less than minimum wage then it's a pretty crap business,

    just saying

  10. Ken Moorhouse Silver badge

    SIC 62090 - Other information technology service activities

    That's how Uber London Limited classify the nature of their business. How does that relate to accident insurance if a passenger in a Uber hire vehicle was involved in an accident?

    1. d3vy Silver badge

      Re: SIC 62090 - Other information technology service activities

      I'll bet they fiddle their profits to get on the flat rate scheme too... If I'm not mistaken that classification means paying approx 14% vat rather than 20%

      1. Natalie Gritpants

        Re: SIC 62090 - Other information technology service activities

        The flat rate scheme is based on turnover.

      2. Ken Moorhouse Silver badge

        Re: VAT

        The question is whether they are declaring the VAT that they should be collecting on the service which they are providing within the UK. Their turnover must surely exceed the UK VAT registration threshold and they are therefore obliged to charge VAT. If they are not then they will have an unfair cost advantage compared to any other cab company.

        1. jonathanb Silver badge

          Re: VAT

          They claim to be providing the service in the Netherlands and as it is B2B advertising services, it is subject to reverse charge rules, ie the driver is supposed to declare the import and pay VAT on it.

    2. jonathanb Silver badge

      Re: SIC 62090 - Other information technology service activities

      They tell you there is no such thing as an Über hire vehicle and you should deal with the driver. There are news reports of this happening.

  11. James Cullingham

    I cannot understand the merits of this case

    Please correct me if any of the following are wrong.

    (1) Uber drivers are solely responsible for ensuring they have a car. So they have the fixed costs of buying or leasing a vehicle, as well as paying for insurance, VED, maintenance/repairs, etc, plus the variable costs of petrol, congestion charge/tools etc.

    (2) Uber drivers can choose when to work, and for how long.

    (3) Drivers are rated 1 - 5 stars by customers, but drivers can also rate customers - implying that they are free not to accept a fare if, for example, a prospective customer has received poor ratings.

    If the above are in fact correct, then it seems absolutely clear that the drivers must be self-employed, and must accept both the benefits and the risks that come with that.

    In particular, how can (1) and (2), taken together, be consistent with the idea of a minimum wage. If a driver, in a particular month, has fixed costs in relation to their vehicle of, say, £300, and they only choose to work for 2 hours, should Uber pay them £314 just to ensure that their 'wages', aka profit, for the month corresponds to £7/hour for the hours worked. Why would this be fair when compared to the case of the driver who works 234 hours?

    1. Charlie Clark Silver badge

      Re: I cannot understand the merits of this case

      Uber drivers are solely responsible for ensuring they have a car…

      So, Uber does no checking? What happens in the event of an accident involving a driver without a driver's licence?

      The basis for the court case is contract and employment law which presupposes fair negotiations between equal and independent parties. As soon as one party appears to be dependent upon the relationship then the negotiations can be considered unfair. Lots of businesses try all the time to reduce their costs by converting "employees" into "contractors".

      I can understand that everyone who uses Uber because it means a better (and possibly cheaper) service than what they were used to, but that just exposes the flaws in the existing system.

      As for ratings: these have no legal status. This is one of the reasons why we license certain jobs. Or are you planning your next flight based on the rating of the pilot?

      1. Anonymous Coward
        Anonymous Coward

        Re: I cannot understand the merits of this case

        The do claim to do some checking to ensure that the driver has the necessary paperwork and licences.

        However as for your specific example "What happens in the event of an accident involving a driver without a driver's licence?". The driver gets done and possibly sent to prison, as they should do for driving illegally. You could still sue Uber if the checking they claimed they carried out wasn't done.

        Should "Rated People" which allows you to post some plumbing work that needs doing and a plumber can reply and take the job be liable for paying minimum wages and giving that plumber holidays regardless of other work they do or how many jobs they take on? Doe sit change if there is a set fee for that work provided by rated people?

        Should AirBnB be required to ensure all it's home owners get minimum wages and holidays etc?

        I don't agree with any company being able to circumvent employment law to get cheaper wages out of people, but I don't think trying to force these people to be employees in this situation is the answer.

        To me they seem like independant workers/contractors.

        1. John Brown (no body) Silver badge

          Re: I cannot understand the merits of this case

          "Should "Rated People" which allows you to post some plumbing work that needs doing and a plumber can reply and take the job be liable for paying minimum wages and giving that plumber holidays regardless of other work they do or how many jobs they take on?"

          If "Rated People" are setting the price for the job, then yes, they should be able to estimate the time the job should take and factor in the "wage" for the plumber, including his/her costs and travel. But since they don't, then no.

          The same applies to AirBnB. The seller sets the price, not AirBnB.

    2. James Cullingham

      Re: I cannot understand the merits of this case

      Uber is acting as a marketplace - it brings service providers and potential customers together, and takes a fee for the privilege. As part of this, it may or may not choose to put measures in place to ensure that a satisfactory standard of service is being offered, as that protects its own reputation and therefore business.

      It seems therefore that it is entirely valid to compare it to, say, eBay, which does exactly the same thing. If I start a business selling goods on eBay, and earn enough to make a living, that emphatically does not make me an employee.

      The only difference is that in the case of eBay, payment is earned for selling items, whereas in the case of Uber, an argument could be offered that this is more of a personal services scenario. But it isn't - a driver is not being paid for their time per se, but for the fact that they have completed the service that was required, i.e. to move people from place to place. If they drive more slowly, they will earn less. This is not how employment works.

      Please note that I makes no difference to me one way or the other - it just seems so clear cut that I genuinely don't understand how the GMB feel that they have any legal basis to their case.

      1. John Brown (no body) Silver badge

        Re: I cannot understand the merits of this case

        "Uber is acting as a marketplace - it brings service providers and potential customers together, and takes a fee for the privilege."

        That might be true if the "seller" is setting the price, but it's not. Uber is setting the price and basing their commission on that price. So it's a bit more complex than just a "marketplace"

    3. John Brown (no body) Silver badge

      Re: I cannot understand the merits of this case

      "Why would this be fair when compared to the case of the driver who works 234 hours?"

      I think the point is that the driver who works 234 hours in a month still can manage to clear enough to make minimum wage. That's basically a full time job at less than minimum wage.

      There may be more to it of course but if the GMB feel they have enough to go to court with, then it seems quite likely that effectively Uber are paying below a reasonable and fair rate. Whatever the outcome, it's a taxi service, not ride sharing and I suspect that is going to be a major point in the case. It may set a precedent and Uber won't want that.

  12. billse10

    coincidences

    reading this comments page, and I have an Uber advert at the top of it.

    "No Schedule: Drive When You Want." does not sound like any employer I've ever known ....

  13. Alister Silver badge

    It depends a lot on the driver:

    If a person has a full / part time job in another business, but is prepared to pick up and drop off an Uber client as part of their journey, and reap the benefit, then that is equivalent to car sharing, and they are clearly not an employee in any meaningful sense.

    However, if someone's main income is derived from driving around picking up and dropping off Uber clients, then they are acting as an employee.

    In addition, in the latter case, they are clearly using their car "for the purposes of hire or reward", and therefore a normal car insurance policy won't cover them, and they should have a commercial insurance.

    1. DavCrav Silver badge

      Re: It depends a lot on the driver:

      "However, if someone's main income is derived from driving around picking up and dropping off Uber clients, then they are acting as an employee."

      I don't think that's clear. Someone who makes stuff and sells them on eBay, and makes a living doing that, isn't an employee of eBay. You might be right, but you need a more concrete argument than that.

      "In addition, in the latter case, they are clearly using their car "for the purposes of hire or reward", and therefore a normal car insurance policy won't cover them, and they should have a commercial insurance."

      Yep, they have to. I think this is well known.

      1. John Brown (no body) Silver badge

        Re: It depends a lot on the driver:

        "I don't think that's clear. Someone who makes stuff and sells them on eBay, and makes a living doing that, isn't an employee of eBay. You might be right, but you need a more concrete argument than that."

        The difference is that EBay are not telling you what to make (who to pick up and where) or how much to sell it for (setting the journey price)

    2. jonathanb Silver badge

      Re: It depends a lot on the driver:

      "If a person has a full / part time job in another business, but is prepared to pick up and drop off an Uber client as part of their journey, and reap the benefit, then that is equivalent to car sharing, and they are clearly not an employee in any meaningful sense."

      You can't do that on Über. They could, and probably will, send you fares that are going in a completely different direction.

  14. upyourkilt

    It high time all taxi and private hire drivers where employed ,especially all those working under or for an office, the offices overcharging for rentals drivers working 70 to 80 hours a week.

    It doesn't matter if the driver owns the car, if they are working under that office they should be employed .

    Areas outside the large city's drivers in some areas are lucky to take home £2.50 an hour, and its all because of a HM revenue loophole on who pays the fuel, especially on split bags.

    If a driver refuses a run the office can sack them without any comeback, so the drivers have no choice in the matter, then there are school contracts, are drivers able to refuse to do them, are they hell as like.

    so its time everyone was entitled to at least the min wage

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