Supreme Court rules that Uber drivers are workers

As researchers exploring the private hire sector, we are pleased to see the recent ruling that Uber drivers should be classified as workers. This was one of the main recommendations arising from our recent research which explored drivers’ working conditions in a Core City in England. Our findings highlighted the precarious conditions facing many drivers:

“You could do one job in an hour; the minimum fare on Uber is £3, for you as a rider. Now the slice that Uber take is 25%; it’s a big chunk, and so you’re left with £2.25, and that’s an hour’s worth of work, minus your fuel, minus your running costs, insurance, road tax, etc…. Now, on a busy weekend you will probably make more than £10 an hour, before you take out your expenses, but you’re still going to be hovering around that threshold. If you take it over a week, you find that you’re actually falling below the minimum wage threshold.”

DWPE04, private hire drivers’ organisation

Such economic insecurity has become worse during the pandemic, as demand has fallen sharply and state support for drivers has reportedly been difficult to access.

Driver insecurity is compounded by an over-supply of drivers. This was a problem before the pandemic and also affects Hackney taxi drivers:

“I’ve been in the cab trade since 1990 and I was making more in say 1995 than I am now. My take-home pay has decreased although the fares have gone up. Just because it’s – the market basically is flooded.”

DWPE07, Hackney drivers’ organisation

This over-supply has been caused by a combination of de-regulation of the sector in 2015 and Uber’s business model which aims to recruit to a level where there is always a driver nearby and available. Classifying drivers as workers will help to address such economic insecurity, by entitling drivers to an hourly wage, paid sick leave and holiday, creating a disincentive to over-recruitment.

However, the challenge now will be how to enforce the ruling. Uber have already issued a statement claiming that the ruling only applies to those drivers using their app at the time of the initial Employment Tribunal application in 2016 – an interpretation that is disputed by drivers’ legal representatives – and it seems likely that widespread implementation will require further Employment Tribunal applications by current drivers, using the Supreme Court ruling as a precedent.

There is an urgent need for legislative change to restrict drivers to collecting fares within the local authority for which they are licensed, and powers for local authorities in England to cap the number of private hire licences, as is already the case in Scotland.

There are significant challenges of cross-border operating which makes it harder for local authorities to improve passenger safety, enhance driver welfare and tackle environmental issues. The New York Taxi Workers Alliance reports similar frustrations to Nottingham drivers concerning an over-supply of cars driven by Uber and Lyft, leading the union to campaign successfully for a cap on the number of vehicles licenced to these apps and a target for reducing the percentage of the time cars spend without a passenger in certain areas.

Implementing such a cap also carries risks, however. Some drivers view their work as a last resort, and thus any cap on the number of private hire drivers or vehicles needs to be accompanied by job creation, training and support for alternative forms of employment.

The Supreme Court ruling sends a clear message that operators share responsibility for drivers’ wellbeing. The judgement summary explicitly states that the definition of worker should apply because drivers “are in a subordinate and dependent position in relation to a person or organisation which exercises control over their work”. This has implications for many other people working in the gig economy, including private hire drivers with other operators and couriers and delivery drivers who work consistently for the same company and have very limited autonomy.

The ruling strengthens the case for legislative reform to enshrine this shared responsibility for drivers’ welfare within the licensing framework. This is more important than ever during the pandemic, where drivers have died at a higher rate than almost every other occupational group. At present, licencing conditions for operators quite rightly include conditions aimed at protecting the welfare of passengers and the public, but do not offer similar protections for drivers. This was expressed by one of our interviewees involved in licencing:

“it’s a conversation I have with private hire drivers quite a lot … I absolutely understand their problems around the gig economy and stuff. But I’m the licensing authority…. I can’t dictate terms and conditions to operators…. The primary thing is [that] they operate a safe business: they operate a business that doesn’t put their passengers and the public at risk. And that’s what the law tells me I have to do…. Imposing and policing large operators, because that’s what it’ll mean, about their terms and conditions, is a bit beyond our scope … we might be able to do it, if we increase our licensing fees to cover that sort of cost, but I would rather go around a route of trying to negotiate change with them.”

DWPE03, Individual from City Council

We recommend legislative change to require fair treatment of drivers as a condition of operators’ licence, alongside adequate resourcing for local authorities to monitor and enforce these conditions.

Update 17/03/21: In a surprise u-turn, on 16 March Uber announced that they will recognise all of their UK drivers as workers, but on terms that differ significantly from those set out in the Supreme Court ruling. Whereas the court ruled that drivers should receive a minimum hourly wage for all of the time they are logged in to the app and available for work, Uber have said they will only apply the minimum wage from the moment a driver accepts a job to the moment they drop off the passenger. This is therefore a significant, but partial, victory for drivers’ claims, and fully achieving their demands may require further legal challenges.

The full report and recommendations are available here. We welcome enquiries and discussion about our findings, or proposals for future research.

Tom Vickers is a senior lecturer in Sociology and convenor of the Work Futures Research Group at Nottingham Trent University. Rich Pickford leads the Nottingham Civic Exchange, a placed-based think tank housed at NTU’s School of Social Science. David Dahill is a Research Associate at Nottingham Trent University, where he is also competing his PhD which focuses on the existential and social dimensions of precarious work.

Image credit: Eugene Chystiakov on Unsplash