Uber suffers another setback in the UK as a judge rules that drivers require workers' rights

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Uber suffers another setback in the UK as a judge rules that drivers require workers' rights ^Featured

Technology

10 November 2017

Uber lost an appeal at a U.K. employment tribunal Friday over its treatment of its drivers.

Judge Eady said Friday that two Uber drivers, Yaseen Aslam and James Farrar, were working for Uber and consequently entitled to a minimum wage and holiday pay, among other rights.

Uber has long argued that its drivers are self-employed rather than workers at the firm.

The employment tribunal's decision is not only a challenge for Uber's business in Britain, but for the so-called "gig economy" as a whole.

On Thursday, Sean Nesbitt, partner at Taylor Wessing, said the case would be "economically significant to Uber and other gig economy and mainstream operators who are watching with interest."

Another firm operating in the gig economy, online takeaway service Deliveroo, was faced with a legal challenge of its own from delivery drivers earlier this month. Deliveroo's riders are seeking to gain employment rights including the minimum wage.

CNBC has reached out to Uber for comment.

London ban

The tribunal decision follows an attempted ban on Uber's operations in London by the regulator Transport for London (TfL). TfL revoked the taxi start-up of its license to operate in the city in September. Uber then appealed against the shock move last month, which allowed its drivers to continue operating in the capital.

Criticism has been leveled at the ride-hailing business from all sides — including labor unions, politicians and traditional black cab drivers — over working conditions and regulatory concerns.

Last year, Farrar and Aslam successfully argued to an employment tribunal that, as their actions were controlled by Uber, they should be treated as workers instead of as self-employed. U.K. labor union GMB hailed a "monumental victory" over the firm following the case.

Farrar, himself a union representative for Uber drivers, argued that, after commission and operating costs, drivers were earning only £5.68 ($7.46) per hour, 15 percent below the U.K. minimum wage.

Farrar said in a statement Friday: "Uber cannot go on flouting U.K. law with impunity and depriving people of their minimum wage rights."

He called on London Mayor Sadiq Khan, TfL and U.K. Transport Secretary Chris Grayling to "step up and use their leverage to defend worker rights rather than turn a blind eye to sweatshop conditions."

Aslam said: "I am glad that the judge today confirmed what I and thousands of drivers have known all along: that Uber is not only exploiting drivers, but also acting unlawfully. We will carry on fighting until this exploitation stops and workers' rights are respected."