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19th February 2021

Uber Supreme Court ruling: Is this the end for the gig economy?

Alice Wright

The Supreme Court has today ruled that Uber must class its drivers as workers, not as self-employed. 

The case – brought by James Farrar and Yaseen Aslam, both former Uber drivers – is a victory for workers’ rights. Although not a surprise ruling, since Uber had already lost three former rounds in the courts, it is a significant one. It means that all drivers working for the firm are now entitled to employment rights such as the minimum wage and holiday pay.  

In considering his ruling Lord Leggatt looked at how much control Uber has over drivers’ earnings, control of contract terms, and their ability to penalise drivers. This helped him to reach the conclusion that Uber drivers are indeed workers and not self-employed. Lord Leggatt states that the firm must consider drivers an employee from the moment they log on to the app to when they log off, not just when they are driving. 

Since the ruling is likely to be expensive for Uber, and sets a precedent that will make competing companies nervous, this may be a warning shot to the exploitative practices of the gig economy that keeps labour so cheap and corporate profits so high. 

Alongside the costs of employment the firm may also be considered eligible to pay VAT as a transport provider rather than simply a booking agent. The gig economy is expected to be worth £140 billion by 2025, and HMRC will be looking at ways to update tax to incorporate such businesses, especially as it is feeling the pressure of the ongoing coronavirus restrictions. 

This ruling is also not auspicious for Uber at a time when they are also starting their fight against the incoming suit from black cab drivers. London taxi drivers, represented by Mischon de Raya, are suing Uber for unlawful practices surrounding hailing cabs on the street, between 2012 and 2018. 

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