Plan Insurance Blog

Is the Uber appeal decision a loss for the Private Hire industry?

Uber have failed in their appeal against the 2016 tribunal’s decision which ruled drivers to be workers, rather than self-employed.

Under this ruling, drivers must be entitled to employee benefits such as holiday pay and National Minimum Wage. That judgement has now been upheld by the Court of Appeal.

Uber have since argued that, as one of the three judges agreed with their argument, they will be using that as grounds to appeal to the Supreme Court.

“This decision was not unanimous and does not reflect the reasons why the vast majority of drivers choose to use the Uber app,” an Uber spokesperson said.

“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed. Drivers who use the Uber app make more than the London Living Wage and want to keep the freedom to choose if, when and where they drive.

“If drivers were classified as workers they would inevitably lose some of the freedom and flexibility that comes with being their own boss.”

The judges scorned the words used in the agreement between Uber and its drivers, deeming their stance contrived and artificial:

The judgment passed down on Wednesday said:

“For [Uber] to be stating to its statutory regulator that it is operating a private hire vehicle service in London and is a fit and proper person to do so, while at the same time arguing in this litigation that it is merely an affiliate of a Dutch-registered company which licenses tens of thousands of proprietors of small businesses to use its software, contributes to the air of contrivance and artificiality which pervade’s Uber’s case.”

Implications – For Uber

As mentioned previously, Uber have already tried and failed to appeal this 2016 tribunal and now plan to escalate the matter to the Supreme Court. Should this be the case, it is quite evident to see that seriously unattractive financial implications are at stake rather than just a matter of price/principle.

How Uber plan on recouping these costs will be interesting, drivers may be concerned these fees may result in a higher operation commission percentage, but the company will certainly have to tread carefully as this court decision could have many drivers who prize their self-employed freedoms looking for an early exit.

Implications – For the PH Industry

This ruling will certainly open a can of worms for drivers who value their workflow independence and all the greater freedom being self-employed affords them. For those not clambering for workers’ rights, this victory will now severely restrict them going forward.

Will Uber be able to offer their drivers the choice between remaining self-employed and continuing to enjoy certain flexible working practices or becoming employees and receiving the benefits of workers-rights?

Established industry expert Gary Jacobs of EaziAdvice shares his take on the potential next move for Uber following this high profile decision:

“The simple answer is yes. There are recognised levels of supervision direction and control, that operators and drivers can adhere to and continue their relationship, as long as the legislative goalposts don’t keep being moved. Regardless of the many strong opinions in our industry, in reality we haven’t seen the trickledown effect of this or any other case yet.

“However, Uber specifically were defending what was essentially a tech contract, which looked substantially different from the many Contract for Services we traditionally have in our industry. From a personal perspective, I found it interesting how little private hire industry knowledge was present in the respondent’s legal line up. Because of this, their defence left a hole big enough for politics to enter.

“The 64 million dollar question is, what about the silent majority of drivers and their rights to work in the way that suits them financially. Any app can be switched off, and there are now at least twelve new private hire apps on the horizon, so if this leads to Draconian laws on the engagement of workers, the rights of the more precarious and vulnerable workers may be protected on paper. But in reality, many of my driver clients’ may be severely limited in how they choose to trade. Where is the win for our traditional hard working PH driver?”

Potentially the ruling will have a large impact on the ride-hailing industry. If Uber passes any additional costs onto their drivers, many may head for the door and look for recruitment from other operators. 

However, other operators will now have to keep one eye open as the ruling on Uber’s overheads might be just as applicable to other companies within the industry. It’s very likely other operators will be spending the New Year re-evaluating their drivers’ contracts and working practices with employment status in mind.