Uber drivers are “workers” and not self-employed contractors, according to a U.K. Supreme Court ruling last week, and this decision could have significant ramifications for the “gig economy” in the long term.
First, a little context: Uber and Lyft, along with delivery companies such as DoorDash and Instacart, have claimed for a while that their drivers are independent contractors, not employees. In California, a law that went into effect at the start of 2020 said otherwise and required these companies to reclassify their contractors as employees. Uber and Postmates (which Uber owns) filed a lawsuit in response, and this past November, Uber and others successfully backed a ballot initiative that made them exempt from the law.
In the U.K., a similar debate has played out. The ruling on Feb. 19 will require Uber to offer benefits like paid holidays and minimum wage. The court’s decision is specific to Uber’s operations in the country, but it could inspire other legal actions from different groups of workers.
Last January, I wrote that 2020 would be an interesting year for the gig economy, and now it appears that 2021 will be a very interesting year, too. This ruling seems to suggest a shrinking of the gig economy, because some former members of this group are now going to be classified as employees. However, we’ve also seen an immense amount of change in the working world more generally since the COVID-19 pandemic began, with more and more people working remotely across the globe. I would suspect that we’ll see new “gigs” emerge in the coming years that don’t even exist today. For those of us in mobility, we generally support employees as opposed to contractors, but it’s good to keep an eye on these ever-changing workforce dynamics.
Experts said the ruling does not have a major immediate impact on other companies because the judges cited business practices specific to Uber, which in the U.K. has to operate under specific regulations governing minicabs. “That being said, whilst it’s not going to automatically make all gig economy workers have those rights, it’s obviously going to make people alive to the potential for bringing those claims” in court, said Joe Aiston, a senior associate at law firm Taylor Wessing. “And you wouldn’t be surprised to see more claims coming in against other similar businesses.”