Uber's UK supreme court defeat should mean big changes to the gig economy | John Naughton


“Move fast and break things” was famously the mantra of Silicon Valley tech companies. It was passionately embraced by Uber, the ride-hailing company set up to put taxis out of business. Unfortunately for it, one of the things it broke was UK employment law – which led the UK supreme court to issue a judgment on 19 February confirming that this was indeed the case.

Uber (for those who, including this columnist, have never used it) is a technology platform that puts customers seeking a taxi in touch with drivers who own cars and are willing to provide rides. Everything that happens in that process, other than conversations between customers and drivers, is controlled by the platform. Uber’s case – and business model – depends on drivers being regarded as self-employed contractors, ie cheap. The case decided by the court hinged on the question of whether drivers were indeed merely contractors, or “workers” entitled to a minimum wage and holiday pay – protections they were unable to enjoy while Uber classified them as self-employed.

The court unanimously upheld a 2016 employment tribunal decision maintaining that drivers are in a “position of subordination and dependancy to Uber”. The judgment is worth reading just to see the justices’ elegant exposition of this proposition. Uber set maximum fares; drivers had no say in their contracts; the application imposed penalties if drivers cancelled too many requests; and they had little or no ability to improve their economic position through “professional or entrepreneurial skill” – so in practice the only way in which they could increase their earnings was by working longer hours while constantly meeting Uber’s measures of performance. Which meant they worked for Uber and not themselves.

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Although Uber are insisting the verdict only applies to the 25 drivers who brought the claim, in reality it sets a precedent for how millions of gig economy workers are treated in the UK and elsewhere (because foreign courts pay attention to what courts in other jurisdictions have decided). In that sense, the judgment is a landmark one with significant implications for gig-economy outfits such as Deliveroo and others.

Mind you, it doesn’t go the whole way to regarding Uber drivers as employees. There are three employment categories under UK law: employees, who are guaranteed employment rights and benefits; workers, who enjoy some of those rights; and the self-employed, who have very little protection. The supreme court has just moved the drivers from the third of these categories to the second. But it’s a start.

So what happens next? Will Uber tweak its platform to reduce its level of control over its “new” workers? If it does then, as the Financial Times pointed out, it will be less able to guarantee customers a uniform service – which is one of the reasons why Uber was so popular with foreign visitors to Britain. (I gather that a common complaint of Uber drivers to their passengers in Cambridge is that the bottom dropped out of their business once the pandemic forced Chinese students to return home.)

Another possible response will be to raise prices to cover the additional costs of conforming with the law as decided by the supreme court. Since Uber is pathologically unprofitable (London seems to have been one of the few cities where it was making some money), a significant rise in its operating costs seems certain to make the financial picture worse.

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So, on the face of it, Uber is cornered – by UK law on the one hand, and by financial realities on the other. But, as any zoologist will confirm, wild beasts are often at their most dangerous when cornered. And Uber – which until recently had the most toxic corporate culture after Facebook – is unlikely to play nice. We had a taste of that in California a while back when it – and an alliance of other gig-economy companies – shelled out $200m to successfully support Proposition 22, a measure that allows them to continue classifying their drivers as “independent contractors” rather than “employees” with mandated benefits.

Uber is already trying the Proposition 22 approach in Brussels. It has published a preposterous “white paper” explaining how important it is to preserve the freedom of 600,000 European workers to “access flexible earning opportunities”. The “current legal ambiguity on the status of independent workers”, it goes on, “makes it difficult for platforms like Uber to provide both access to flexible work and benefits and social protections to independent workers”.

Well, in the UK at least, that “current legal ambiguity” has been eliminated. So all that remains now is for Uber to come to terms with the one thing that all global tech companies viscerally loathe: the idea that they have to obey the law of the petty jurisdictions in which they operate. And one of the deliciously ironic side-effects of Brexit is that the option of kicking the case into the long grass of the European court of justice is no longer available! Sometimes, one must be grateful for small mercies.

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What I’ve been reading

Special effects
There’s a fascinating post by Eugene Wei on his blog about some of the unexpected affordances of TikTok for enabling creative responses to videos.

Getting with the program
Paul Graham, one of the few good essayists the tech industry has produced, has contributed a lovely autobiographical essay, What I Worked On.

Chief of staff
Trump Hotel employees reveal what it was really like working there in a nice piece of reportage by the Washingtonian magazine.



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