California ruling against Uber hits at business model and U.K says Uber drivers should be classed as workers in landmark ruling

California ruling against Uber hits at business model and U.K says Uber drivers should be classed as workers in landmark ruling

uber1st Case:

18th June 2015 – SAN FRANCISCO: A California panel has ruled that a driver for cab service Uber is an employee. In this ruling by the state’s labour commission, Uber was ordered to reimburse one of its drivers, Barbara Ann Berwick, more than US$4,000 (RM14,928) for employee expenses. If the case ends up applying to Uber’s global operations, it could potentially take away one of the underpinnings of its business model, which considers drivers independent contractors.

While Uber claims to be a “neutral technological platform” for independent drivers, it sets most of the terms of employment. Uber and its management team are “involved in every aspect of the operation,” including vetting prospective drivers and terminating them if their rating levels are low. Because of this, Barrett (State hearing officer) wrote, Uber must “indemnify an employee for all that the employee necessarily expends in the discharge of the employee’s duties.” Berwick (Uber driver) had requested the reimbursement of tolls and others expenses incurred while driving. If all drivers are classified as employees, it could require Uber to pay hefty amounts for social security, workers’ compensation and other charges. If all drivers are classified as employees, it could require Uber to pay hefty amounts for social security, workers’ compensation and other charges.

2nd Case:

28th October 2016 – LONDON: U.K. says Uber drivers should be classed as workers in landmark ruling, Uber plans appeal. The Guardian reported that Uber has lost a landmark employment tribunal case against two U.K. drivers who argued they should be treated as workers rather than self-employed contractors. The case in question involves two drivers, Yaseen Aslam and James Farrar, who had argued at a previous tribunal that Uber was the only company they worked for, and they had no control over what pricing they could charge customers.

“Working for Uber is my job — I do not run a private hire business. I do not have a service company. I do not advertise ‘driving services’, I have no one working for me, I have only one car licensed with TfL [Transport for London] for private hire work and I only drive for Uber. I understand that Uber is arguing that I run my own business and that Uber is a customer of that business, but this in no way reflects the daily reality of my job. I am not sure what service Uber provides to me.

In reality, they pay me for the work I have done and keep 20 percent of what they have charged the customer … I have no ability to negotiate a different deal — I either have to accept Uber’s terms or not work as an Uber driver.” – Farrar.

The claimants also argued that their pay often fell below the national living wage. But as with similar cases elsewhere in the world, Uber argued that it was merely a technology platform, and the drivers were independent contractors who choose when and where they work.

Uber has lost a landmark employment tribunal case against two U.K. drivers who argued they should be treated as workers rather than self-employed contractors, reports the Guardian.

The case in question involves two drivers, Yaseen Aslam and James Farrar, who had argued at a previous tribunal that Uber was the only company they worked for, and they had no control over what pricing they could charge customers. At the July tribunal, Farrar argued:

Working for Uber is my job — I do not run a private hire business. I do not have a service company. I do not advertise ‘driving services’, I have no one working for me, I have only one car licensed with TfL [Transport for London] for private hire work and I only drive for Uber. I understand that Uber is arguing that I run my own business and that Uber is a customer of that business, but this in no way reflects the daily reality of my job. I am not sure what service Uber provides to me.

In reality, they pay me for the work I have done and keep 20 percent of what they have charged the customer … I have no ability to negotiate a different deal — I either have to accept Uber’s terms or not work as an Uber driver.

The claimants also argued that their pay often fell below the national living wage. But as with similar cases elsewhere in the world, Uber argued that it was merely a technology platform, and the drivers were independent contractors who choose when and where they work.

Having heard evidence from the claimants’ defense team and Uber during the preliminary hearing, Judge A.M. Nelson today ruled that “the Claimants were ’employed’ as ‘workers’ by the Second Respondents, Uber London Ltd, within the meaning of the:

  • Employment Rights Act 1996, s230(3)(b)
  • the Working Time Regulations 1998, reg 36(1) and the
  • National Living Wage Act, s54(3).”

It means that they are now entitled to paid holidays, rest breaks, and the national minimum wage. Taking a broader look at the ruling, however, it may open the floodgates for similar claims from Uber’s 40,000 U.K.-based drivers.

MyFreelys Academy’s Comments:

Interestingly, in both separate cases, Uber has been very consistent in their defense where they argued that it is a “technology platform and the drivers are independent contractors”. Although this decision is not binding in Malaysia, it is interesting to note the thought processes of the two judges who presided over their respective matters. Back home, a very similar ‘control test’ is applied to distinguish an employment contract (contract of service) and a service contract (contract for service). The facts of these cases remind us to always look at things from a broader perspective as the Court may one day decide to not only look into simple, straightforward control factors such as hours of work, leave applications, etc but may look into the nature of work just like these Uber cases. Think about it – if an outsourced janitor is not controlled in terms of (work) timing, leave, lunch break, disciplinary matter and so forth for the maintenance and cleanliness of the entire office or building space but the company dictates the type of cleaning detergent used or the choice of toilet wares being cleaned, and the budget for cleaning maintenance and upgrading, etc. does it make the outsourced janitor an employee by virtue of the Uber decisions?

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