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?
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Uber has an advantage when its drivers are self-employed because it reduces operating costs.
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Self-employed status means rights are not statutory, and you’re not subject to workplace rules.
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Uber plans to appeal, which could drag the issue up through the Court of Appeal and the Supreme Court.
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The UK ruling could set a precedent in Uber’s countries of operation.
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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
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The case against Uber was filed by its ex-drivers James Farrar and Yaseen Aslam.
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They claimed Uber was not offering basic workers’ rights, like minimum wage or holiday pay. They won.
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Uber appealed, citing other traditional minicab companies.
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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.
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Several countries across the EU have already banned UberPop, which uses drivers that are not professionals.
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Hungary and Denmark have already forced Uber to quit due to tight regulation.