Uber lost an appeal at a U.K. employment tribunal Friday over its treatment of its drivers. The ride-hailing major failed to overturn an employment court ruling that said it must treat its drivers as workers, as opposed to self-employed contractors.
Why is it Important?
Uber has an advantage when its drivers are self-employed because it reduces operating costs.
Self-employed status means rights are not statutory, and you’re not subject to workplace rules.
Uber plans to appeal, which could drag the issue up through the Court of Appeal and the Supreme Court.
The UK ruling could set a precedent in Uber’s countries of operation.
As the company readies itself for an IPO, this could pose a major hurdle because of increased operating costs, not to mention the effect of ongoing lawsuits on investor sentiment.
The Details
The case against Uber was filed by its ex-drivers James Farrar and Yaseen Aslam.
They claimed Uber was not offering basic workers’ rights, like minimum wage or holiday pay. They won.
Uber appealed, citing other traditional minicab companies.
Their stand has always been that their drivers are independent contractors, and that it is a tech platform connecting riders with drivers and taking a cut on the deal.
Several countries across the EU have already banned UberPop, which uses drivers that are not professionals.
Hungary and Denmark have already forced Uber to quit due to tight regulation.
