Uber has failed to overturn a landmark legal judgement over drivers’ working rights, in a fresh setback for the company in the UK.
The Employment Appeals Tribunal ruled on Friday that Uber’s drivers qualify as workers, upholding a decision against the ride-hailing app made last year.
It raises the prospect that Uber will have to give its drivers rights such as the minimum wage and holiday pay, a move that the company says could fundamentally damage the way it operates.
The company, which argues that its drivers are self-employed and that it is a mere intermediary between drivers and passengers, has around 50,000 drivers in the UK but its model has been criticised in some quarters.
It had appealed an Employment Tribunal case last year, brought by two former drivers, that ruled that drivers were effectively working for Uber while the app was switched on, and were not able to make themselves available to other operators as Uber claimed.
Uber controversies timeline
Jennifer Eady, the appeal judge, wrote: “The Employment Tribunal was entitled to conclude there was a contract between Uber London Limited (ULL) and the drivers whereby the drivers personally undertook work for ULL as part of its business of providing transportation services to passengers in the London area.”
The decision is the latest blow for Uber, which was stripped of its London licence in September after Transport for London declared that it was not a fit and proper operator. It continues to operate in London while it appeals TfL’s decision, and is trying to repair relations with the transport body.
Uber drivers are paid based on the journeys they complete, with the app taking a cut of 25pc or 20pc depending on when the driver joined. It claims drivers earn £15 an hour after Uber’s cut, although this is before expenses such as fuel.
Uber says the model is the same as that which has existed in minicab firms for decades, and that enforcing the ruling would require drivers to work in shifts, taking away the flexibility it claims they enjoy.
Tom Elvidge, Uber’s acting UK general manager, said it would appeal the judgement, either at the Court of Appeal or by escalating it to the Supreme Court.
“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed,” Mr Elvidge said. “The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive and so we intend to appeal.
“Over the last year we have made a number of changes to our app to give drivers even more control. We’ve also invested in things like access to illness and injury cover and we’ll keep introducing changes to make driving with Uber even better.”
Campaigners celebrated the victory, saying Uber was making "a mockery" of current workers' rights.
"Today's victory is further proof, as if any more was needed, that the law is clear and these companies are simply choosing to deprive workers of their rights," said Jason Moyer-Lee, the general secretary of the Independent Workers' Union of Great Britain, which had helped bring the case against the company.
"These companies are making a mockery of supposed employment rights. The government needs to properly enforce the law and they need to do it now."