What’s it About?

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.