back to article Until now, if Canadian Uber drivers wanted to battle the tech giant, they had to do it in the Netherlands – for real

Uber's legal campaign to maintain the classification of its drivers as contractors rather than employees suffered a setback in Canada on Wednesday when the Ontario Court of Appeals ruled that the company's arbitration requirement is illegal and unconscionable. Three judges issued a ruling in an appeal brought by plaintiff …

  1. The Nazz Silver badge

    Judgement of Justice Feldman.

    Accurate and precise. And it doesn't even (or need to) mention the fact that arbitration must be taken , not only in a different sovereign country, but on a different continent. (Whether she did later in her Judgment i know not).

    Just what sort of a **** of a human being must someone (several) be to recruit local hardworking, underpaid "staff" to deliver your product ie a taxi ride ( not ride sharing) and yet lumber those same people with such onerous arbitration clauses?

    the phrase, "it won't end well" springs to mind.

    1. W.S.Gosset Bronze badge

      Re: Judgement of Justice Feldman.

      > Just what sort of a **** of a human being...

      Oh, make no mistake. This is not accidental. And it is a very cynical and deliberate abuse of the market-power differences between the hugely funded corporate and the individual (non)employee.

      As I wrote on this site a year or so ago:

      (https://forums.theregister.co.uk/forum/all/2016/11/18/pew_gig_economy_study_is_grim/#c_3032413)

      Re: Not Surprised

      No, it's worse than that, with very real, very disturbing long-term implications.

      The "gig economy" actively/aggressively relies on a desperate underclass, and --much worse-- explicitly creates a structure to guarantee that those people remain trapped in that / as that underclass.

      The "useful idiots" [Lenin] here are those NOT desperate who are just after some extra cash from their idle time. A lot of these, you'll notice after a while, are themselves cross-subsidised from other lifestyle/luck factors. As such, a fair wage (relative to living standards) is not particularly important to them -- only an absolute non-zero value. So they'll happily bid lower just to get whatever cash. The result is that the non-desperate drive down the price for the desperate. Making the desperate two-time losers in this situation.

      The "gig economy" traps the poor in poverty.

      1. Paul Hovnanian Silver badge

        Re: Judgement of Justice Feldman.

        "The "gig economy" traps the poor in poverty."

        So shut down the gig economy. Close Uber. Now where are the poor?

        I happen to like the gig economy as a self-employed engineer. I don't want inequities in the Uber model paraded out as an excuse to force myself (and man other people) into involuntary employee/employer relationships. Fix Uber and the problems with its arbitration policies.

        1. Irongut

          Re: Judgement of Justice Feldman.

          Working for a company that obeys the law and pays them a decent wage.

        2. Doctor Syntax Silver badge

          Re: Judgement of Justice Feldman.

          "I happen to like the gig economy as a self-employed engineer. I don't want inequities in the Uber model paraded out as an excuse to force myself (and man other people) into involuntary employee/employer relationships."

          Being retired I no longer have a direct interest but as an ex-freelancer I share your concern.

          The precedents relied on by taxation tribunals always seemed to have been made to determine employment status in such abusive situations. What's now making it worse is that a previous indicator of being in business on one's own account - provision of equipment - is being ignored.

          ISTM that the entire body of precedent needs to be dumped and replaced by a set of statutory definitions which take into account not only protection of employees but also the right of individuals to be in business.

          1. Insert sadsack pun here

            Re: Judgement of Justice Feldman.

            "What's now making it worse is that a previous indicator of being in business on one's own account - provision of equipment - is being ignored."

            There's no change and the courts didn't ignore it. That's just one of the indicia of being a contractor, but it's never been determinative. There are plenty of employees who have traditionally brought their own tools, but that has never meant they're contractors just because they did so.

            Every case is going to be context specific. I don't see why a statutory test replacing a well-used body of law that's been built up over time would be an improvement.

            1. Doctor Syntax Silver badge

              Re: Judgement of Justice Feldman.

              "I don't see why a statutory test replacing a well-used body of law that's been built up over time would be an improvement."

              Well-used in the sense of extensively used. "Well" in the sense of "good" is arguable.

              Consider for example that civil law decisions are supposed to be taken on the basis of balance of probabilities. In an IR35 case the alternatives being argued are a contract of employment vs a contract for provision of services. Shouldn't that mean that a court should look at each factor and ask "does it fit a commercial contract for services?" as well as "does it fit a contract of service?". One of the crucial tests has been "personal service" of a named person. At one time the IR website had a sample contract for provision of services to the IR Commissioners. I may still have a copy somewhere; I took the precaution of downloading it. In the middle of that was a key man clause to the effect that someone who the Commissioners (i.e. the client) considered important to the delivery of the services couldn't be substituted without their agreement. Put that in a contract as a term the IR wanted to protect itself and it was a normal commercial clause. Put it in a contract the IR wanted to challenge and it was an indication of employment because the possibility of a commercial contract doesn't get weighed in the balance.

              Then there's the back-to-back contract problem. The freelancer has a contract with the agency saying one thing, the client has a contract saying something else. HMRC got a decision saying that the provider is bound by the client side contract which he hasn't seen with terms he wouldn't have agreed to. How did they get that one through? They didn't take on a contractor able to defend himself, they took on one who was so ill that that the tribunal had to conduct the hearing in his home. What's the underlying commercial equivalent? The agent is a broker who sells something he doesn't have (the employment-like contract the client wants) in the hope he'll be able to get it. I've twice had a car dealer sell me something he couldn't get - in one case the entire model was discontinued* and in another it was just the colour. In the case of a freelancer the agent is hoping that the circumstance won't arise when the difference in contracts becomes significant in the course of business; if it does they risk being sued by one party or even both just like any other commercial transaction gone wrong where a settlement can't be achieved - it's a normal broker's commercial risk and it's not the outcome that the HMRC got a precedent on.

              *Strictly speaking it wasn't me to whom they were('nt) selling it. It was picked from my employer's company car list so it was some leasing company so I had no real say and got stitched up with a lump of ghastly diesel rubbish - no I didn't want to pay to buy it when I took early retirement a little later.

  2. Dyspeptic Curmudgeon

    The proper name is "Court of Appeal for Ontario", not 'Court of Appeals'.

    If you read the decision in its full form, the name was at the top of the first page!

    The link given at para 3 is now stale. The full decision is at:

    http://www.ontariocourts.ca/decisions/2019/2019ONCA0001.htm

    Or in legal-speak 2019 ONCA 1

    1. The First Dave

      So where does "ONCA" come from then?

      Or "ontariocourts" in the URL?

      1. Solarflare

        So where does "ONCA" come from then?

        ONtario Court of Appeals, I would guess. Names don't always match up perfectly to their abbreviations to be fair.

  3. W.S.Gosset Bronze badge

    Uber is a ponzi scheme

    Last numbers I saw, Uber was earning US$6bn a year. But spending US$9bn a year to earn it. US$ -3bn/yr, in other words. That's coming from the VCs. If you have anything to do with the VC crowd, you quickly discover they're a pack of inherited-privilege idiots spending other people's money chasing "oo wah!" memes in a bid to score points off their mates by being first into "the next facebook". I'm talking about the GPs here; the LPs are typically just lazy.

    So that's US$3bn/yr of mom&pop savings&retirements funds being funneled by LPs into GPs into Uber, and thence into the Founders' pockets come cash-out time.

    All this while the average Uber driver is earning around A$10/hr before fuel, maintenance, tyres, etc.

    Uber built themselves a lovely huge office just near me last year. It's huge. Flash. Mostly empty. Like most of these require-/create-an-underclass "Disruptive" "startups".

    1. Anonymous Coward
      Anonymous Coward

      Re: Uber is a ponzi scheme

      I don't blame uber ONLY. I blame YOU, happy to use their services, modern equivalent to slavery.

      1. Martin Summers Silver badge

        Re: Uber is a ponzi scheme

        Who said that he was using them? He certainly didn't!

        1. W.S.Gosset Bronze badge

          Re: Uber is a ponzi scheme

          He doesn't. For precisely the reason cited.

          1. Michael Wojcik Silver badge

            Re: Uber is a ponzi scheme

            He doesn't. For precisely the reason cited.

            Nor do I.

            My employer has recently announced that they're "partnering with Uber" for business ground transportation, and asked us to register with the company. Nope. I'll pay for my own ground transport. It's a small concession to maintain my ethics.

        2. Anonymous Coward
          Anonymous Coward

          Re: Uber is a ponzi scheme

          sorry, I mean YOU ALL, "happy uber customers"

    2. Irongut

      Re: Uber is a ponzi scheme

      Personally I think its a money laundering scheme rather than a ponzi scheme but either way it is illegal and should be shut down.

  4. Mongrel

    If it weren't so crappy it'd be funny...

    ...because it imposes an unfair burden on drivers: it requires them to pursue mediation in the Netherlands,

    And I'm sure the required paperwork was stored in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”

    Because 'disruption'

    1. Pascal Monett Silver badge

      Re: If it weren't so crappy it'd be funny...

      There is absolutely nothing funny about how Uber manages itself internally, the market or its non-employees.

      That company should be scrapped and all of its managers forbidden from managing anything more important than a porta-potty, ever.

      1. Andrew Moore Silver badge

        Re: If it weren't so crappy it'd be funny...

        Worse is- Uber gets defended by people whose only desire is to have low cost taxi fares- they couldn't care less about poverty or working conditions, as long as they get their "cheap".

    2. Voyna i Mor Silver badge

      Re: If it weren't so crappy it'd be funny...

      Douglas N Adams was surely the most accurate futurologist we've ever had.

  5. Anonymous Coward
    Anonymous Coward

    writing on the wall

    but hey, those of quick mind have made their fortune (and hey, milions of uber passangers can not go wrong!) Now, let's come up with new, "disruptive" business models (never mind the stink) to reap profits, before the law catches up.

  6. Chrissy

    Always the Netherlands?

    Has anyone seen any other country's Uber contract?

    I'd be interested in where the mediation location is for each country.'s drivers ..

    Are they all The Netherlands, and if so what is so special in Dutch law* that makes it so favourable for Uber?

    * Especially considering that Dutch employment law would theoretically not be that much different to any other EU country's?

    Are they all The Netherlands unless local law forces Uber to arbitrate in the immediate/local country'?

    Or is there some consistent agenda by Uber to make mediation almost always impossible by making sure that the mediation location is always a minimum of say 3000 miles from the driver's country?... are UK drivers expected to arbitrate in Dubai, and Dubai drivers in London?? Dutch drivers have to arbitrate in Ontario?

    Perhaps some journalistic research needed wrt the background to why Uber would have such a bizarre clause?

    1. Anonymous Coward
      Anonymous Coward

      Re: Always the Netherlands?

      The article mentions the ICC but doesn't explain who they mean. I'm guess it's not the International Criminal Court which is based in Holland.

      But it probably means the International Chamber of Commerce Arbitration service, which has branches in many countries. So no idea why Holland

    2. DuchessofDukeStreet

      Re: Always the Netherlands?

      Everywhere other than the US and China, you're dealing with Uber in the Netherlands (both as a driver and a user). Most probably because of the tax position that the corporate structure benefits from...

      http://fortune.com/2015/10/22/uber-tax-shell/ (old but it won't have changed)

      1. Chrissy

        Re: Always the Netherlands?

        Revealing article..... Not at all a company looking like its trying to obfuscate; quote from the article:

        "

        But a careful examination of available records reveals a surprisingly complicated web of business entities for such a young company. Uber Technologies Inc., as the company is officially called, is a Delaware corporation with more than 60 subsidiaries in the U.S. and another 75 or more around the world. (Like the parent company, some of these offshoots in the U.S. have German names, including Neben, which means “next” in German, and Gegen, which means “against.” Another subsidiary, dissolved earlier this year, was called Schaben, which can mean either “scrape” or “cockroaches.”)

        "

        1. W.S.Gosset Bronze badge

          Delaware is a tax haven

          Not many people know this:

          RE: > Uber Technologies Inc. ... is a Delaware corporation

          Delaware is a tax haven which also shelters/hides companies from normal legal&financial recourse, approximately of the order of Bermuda or the British Virgin Isles ("BVI").

          The legal/financial sheltering is subtle and obscure/obfuscated, but serious. For example:

          * corporate bank accounts are exempt from normal creditor recourse such as attachment

          * directors, executives, etc can be exempted from the normal legal requirements such as duty of care, lack of bad faith, improper personal benefit, fraud, misconduct, violation of the law, self-dealing, conflicts of interest, etc.

          .

          This is well-known amongst American corporate structurers, but very very few people outside that milieu are aware of it. Joe Bloggs would have his guard up on seeing a company based in a well-known tax-free legal-lite dodgy-friendly jurisdiction like Bermuda or BVI, but just naturally assumes that because Delaware is an American State it is all normal and legal and above board.

          Actually, you have about the same legal traction vs a Delaware company as you do vs a Bermudan $10 shell company, despite the appearance of a normal open Western jurisdiction, and they both pay the same amount of tax, viz. 0.

          (Granted, the Delaware company WILL have to pay US Federal tax on domestic US operations (offshore operations have always been tax-free historically, but not sure of the situation following Trump's cleanup), but this is only ~2/3 of the withholding tax payable if attempting to repatriate those US earnings to a Bermudan/BVI parent company. So it's still a substantial discount on the next-best structure for a US-heavy company.)

          Delaware corporate-homing is a triumph for PR/public image/optics. All the benefits of Bermuda/BVI and none of the corporate-image backlash.

          1. W.S.Gosset Bronze badge

            Oh, and:

            > and they both pay the same amount of tax, viz. 0

            A cursory glance at Delaware's corporate regs will put the lie to this: Delaware companies pay 8.7% state tax.

            A close look at Delaware's corporate regs will have you doffing your cap at the subtlety and cunning of their legal drafters.

            Essentially, a moment's common sense pops you squarely in a spectacularly innocuous-looking, obscure-sounding Exemption tucked away in a Glossary. Just don't do business in Delaware.

            End of tax. To be clear: tax = 0.

            If you DO want to do business in Delaware, just pay your US$90 and pop up a local subsidiary, and run all intra-state activity through that. Ensures perfect ring-fencing of the larger corporate tax-exemption.

            Like taking candy from a baby.

      2. Irongut

        Re: Always the Netherlands?

        Double Dutch with an Irish chaser most likely.

    3. This post has been deleted by its author

    4. Dabooka Silver badge

      Re: Always the Netherlands?

      Good shout, Dutch drivers have to attend arbitration in Calgary.

      Of course they could just offer to pay expenses and the fee upfront and make it fair. Obviously they host all of these in Stoke, that would surely put any claimants right off.

  7. Anonymous Coward
    Anonymous Coward

    Why Uber?

    How is Uber different to every other taxi firm in the UK?

    They all operate the agency model, where self employe taxi drivers make themselves available for work and the taxi firm provides them with jobs for a fee. If you don't like one taxi firm, you switch to another. If enough drives leave a taxi firm, the quality of service goes down and customers switch too.

    Why exactly are Uber drivers employees or workers?

    1. noboard

      Re: Why Uber?

      Because a taxi driver keeps the whole fare which is worked out on a meter that has been cleared by the local council, or they can set a pre-determined fare with the person. They then pay the company they may work for, so they can get jobs through them. In the old days the jobs would be put out on a machine and a driver could accept it or not. If they didn't accept it, they still had a chance at the next job and so on.

      Now Uber take all the money and the fare the customer pays is worked out by code that's not monitored and the driver has no way of ignoring it and setting a pre-determined fare. Add in the fact if they skip jobs, their chance of others drops and you have a fairly significant difference.

      Oh and taxi drivers also have to take a test to show they know the local area, not as important in the age of sat navs, but still useful when avoiding traffic. Not all cabbies care about getting you places quickly, but if you're a regular and nice, they will go the extra mile for you because they can make that choice.

      1. Timto

        Re: Why Uber?

        Uber drivers are still licensed tax drivers. They still have to pass the same tests.

        I recently booked a taxi in my city using the taxi firms app. The payment was handled by the taxi firm.

        You can agree a fee in advance, but virtually no-one does. They all operate on a meter.

        I still really don't see any difference between Uber and other local firms

        1. Michael Wojcik Silver badge

          Re: Why Uber?

          Uber drivers are still licensed [taxi] drivers. They still have to pass the same tests.

          Not in the US, they're not. While there are no Federal requirements for taxi drivers in the US, many local jurisdictions require they have commercial license, and many use a medallion or similar licensing system as well.

          Taxi owners usually carry, and in some jurisdictions may be required to carry, taxi insurance. Uber provides supplemental insurance to their (non-commercial) gig drivers, but I haven't seen any reliable claims that it's equivalent to taxi insurance. In any case, the two situations aren't identical.

          You don't say what jurisdiction you're in, or provide any other support for your claim, so my guess is you're full of shit.

  8. Alistair Silver badge
    Windows

    I think there is more truth in this line than in any other statement about Uber I've heard of late:

    "Uber's legal position looks increasingly tenuous. "

    Which in reality means its now (with market considerations included) akin to a standard elastic band keeping a car from falling off a 250M high bridge.

    I feel most sorry for the future retirees and pensioners enrolled in those funds that have stupidly dived into this business.

  9. Haefen

    Canada and it's courts

    I think the most telling part of the article, when it comes to Canada, is the ruling that determined it was fair and reasonable that Canadians, Citizens, not have access to their own legal system but must instead use the companies system to settle disputes.

    Even when a companies system requires Canadians to travel outside of Canada and face rules made in a foreign country a Canadian provincial supreme court justice thinks, and ruled, that is reasonable.

    That ruling did not only drive up the cost of accessing the Canadian legal system for the plaintiff but further empowered all other companies to fight workers as they know the Canadian legal system is very much on their side when it comes to certain issues, like compensation.

    Thanks to the Canadian legal system that fight is not over. There will be yet more delays and costs. This appeals court ruling is just one step in an ongoing process designed to generate what feels like endless costs. The appearance of a legal system for all in Canada disappears quickly for the poor and middle class that try to use it.

    Which should be expected in Canada where the ideas of Democracy have never been accepted. Of the three branches of the Canadian government two are appointed.

    Those two appointed branches of the Canadian government, the Court and Senate, have a veto over any bill coming from the Elected House which is controlled by party rule. Party rule in the House often results in elected members abstaining or voting against the interests of their constituents.

    The Senate, an appointed body meant by design to protect Canada's elite from the drunken masses, regularly uses it's veto as seen recently in the legalisation of Cannabis.

    The Canadian "4thEstate" fails to point out that a system should not be considered democratic when every bill has to be crafted to be acceptable to an appointed body that is not accountable to citizens.

    All bills from the Elected House face veto by an appointed assembly with the stated mandate to be the sober second thought against the democratic wishes of the drunken, and now stoned, masses.

    The Canadian legal system, like it's political system, is largely appointed and with a similar mandate, to protect our elite.

    Court judges are federally appointed. Even for provincial courts like the Ontario Supreme Court, the appointments are made by the Federal government, with no input from citizens or their representatives, not when it comes to the judges or the rules and laws under which they operate.

    The effects of the Canadian system and it's lack of accountability can be seen in Canadians lack to access to the legal system and rulings made by those courts.

    Those effects are on full display with this case and will continue to be because it ain't over yet, not for those footing the bill.

    Contracting in Canada, as it is in most places, has been a key part in driving down wages in some sectors and the over all decline in the Canadian standard of living which should be the highest in the world. Canada has more varied and valuable natural resources per capita of any country yet most live off less than $40K a year half of which is used to pay in taxes and fees. Uber would like to drive (pun) down that average income even further.

    1. Wellyboot Silver badge

      Re: Canada and it's courts

      Senators are appointed on the (elected) prime ministers recommendation & the Judiciary are appointed either by the federal or provincial (elected) government.

      Once in place neither can easily be removed on a political whim and so don't have any reason to be popularist in their decisions.

      Senators are there to provide oversight & detailed consideration to legislation put together by the elected house. Judges are expected to interpret and apply the law without favour (especially political favour).

  10. hellwig Silver badge

    US Courts will Eventually see the light of day

    If I recall, Uber only won the case against classifying their drivers as independent contractors because some old coots who haven't done society the service of dying out of their appointed judgeship couldn't understand that Uber uses phone apps to tell drivers what to do instead of actual physical people.

    "A computer telling people what to do? Why, a computer that powerful would be the size of the pentagon, contain enough copper wire to tether the moon to the earth, and require the power equivalent of 5 suns!!! Where would one even find that many tubes and switches? Do we have enough trees left to make all the punch cards?".

  11. EveryTime Silver badge

    I see Uber driver's as contractors. But they are close enough to the line that a definitive legal call should be made.

    This is not a decision that can be made by an arbitrator.

    The underlying issue here is denying people access to the legal system. An argument can be made that it's judicially efficient to make parties to certain types of agreements go through arbitration before taking up court time. But that argument falls apart when the rules put that process outside the jurisdiction, especially when it's in a different country.

    1. LDS Silver badge

      In my experience, arbitration works well only when parties have roughly equal power - i.e. Uber vs Lyft.

      It doesn't work when one party is much more powerful than the others - because of the way those working as arbiters are selected and paid...

      And that's why US companies like arbitration so much. It doesn't allow class actions, and arbiters know their income comes from those who have the money... those pesky judges are paid by the citizens, instead.

    2. Pier Reviewer

      I can’t speak for Canadialand etc, but in the UK I would expect IR35 to be the nail in the coffin for Uber’s argument. Fighting a bunch of drivers in court is one thing. Fighting HMRC is quite another.

      If drivers only drive for Uber, it’ll be hard to avoid the finding they are employees. HMRC are not going to let loop holes develop. They wants their money!

      1. Doctor Syntax Silver badge

        "in the UK I would expect IR35 to be the nail in the coffin for Uber’s argument. Fighting a bunch of drivers in court is one thing. Fighting HMRC is quite another."

        I'd look on it from a slightly different angle. HMRC will be hoping for a decision against Uber because it would allow them to tilt decisions even further in their favour. It would be another nail in the coffin of those trying to keep out of IR35.

  12. Tom 35 Silver badge

    Bike food delivery too

    They registered them with workers compensation as call center workers, so when they got run over by a taxi they had no coverage. But it was cheaper for Uber.

    https://www.cbc.ca/news/canada/marketplace-food-delivery-apps-labour-issues-1.4895801

  13. mzmls
    Meh

    In Ontario, the gov can’t garnish wages of a person if the company has them on contract. However if the person is an employee, they can garnish. Even though I had a court order for monthly child support payments, the government couldn’t legally garnish his wages.

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