Continuing the discussion from Uber will continue operating in London after court appeal verdict:
I guess this may mean the cost of an Uber goes up, but also has consequences - good and bad - for other ‘gig economy’ operators which we’ve all become increasingly reliant on during the lockdowns.
Many taxi firms and delivery\courier firms use a very similar method to Uber in that they get paid per drop or per mile or a percentage of the fare. It’s been that way for years. Is there something specific about the way Uber does business that means this is specific to them or do you think this will start to change the way a lot of these companies work…
I guess there will be a few lawyers being asked to look at the Supreme Court judgement and trying to work out if it applies to other businesses or not. The BBC article gives 4 considered reasons as to why they decided the drivers aren’t self-employed, and they don’t look terribly specific to Uber - even courier firms and Amazon are asking for their ‘delivery experience’ to be rated these days and I doubt each driver / agent has (or wants) individually negotiated contract terms.
I don’t know enough about the specifics of Uber, but with the level to which this legal wrangle has gone, and with the calibre of lawyers involved, there must be some seriously technical details in play. But I remember as a despatch rider with Pony Express, Mercury and Inter City Couriers back in the 70s and 80s that there was potentially an issue even that long ago. I think it was broadly to do with if a so-called freelance or self-employed person was expected to turn up for work with the same firm on a regular daily & weekly basis - especially if they were wearing or riding liveried equipment - then there was a grey area as to whether they should be actually regarded as being employed. I think I remember reading something on the HMRC website more recently about this as well. Obviously, with the huge cost to a business of having their workforce employed v’s freelance, there are loads of them who want to ‘appear’ not to employ, whereas, technically, they do. So I would think this ruling will have massive implications (but that’s said as a relative layman on this).
That takes me back! I was a cycle courier in the 80s and I remember it being extremely dodgy and a complete grey area then. We were expected to be “self employed” but that was just another way of saying “we dont tax you at source” - some of the guys had worked there, and no where else for years, so it wasn’t like they were offering their courier services to anyone else. While the motorcycle guys were generally pretty professional, paid tax, had insurance etc a lot of the cyclists were not! Not much tax was paid anywhere.
I know in the tech industry that IR35 changed the game but that wasn’t till 2000.
I just wonder if firms like Forest Hill Cars might end up getting caught in this net…
Happy days / Good times !
(and apologies for the typo on Inter City Couriers)
I think a main point of the ruling is that there is no contractual relationship between the Uber passenger and the driver. Possibly with minicabs there is a technical contract between the passenger and the driver. Also money changes hands. I do not use Uber, but I think payment is made directly to Uber.
Good suggestion @Sherwood , but I use a minicab firm who also accept payment through their app so that may not be it. Interesting though.
You can get sacked or let go in a heartbeat with little or no explanation in my game.
That is the nub of it. It is the way that the the drivers are expected to have all of the obligations and duties of an employee but it’s a one way street and the employers get the advantages of a flexible workforce. It is the difference between a contract for services (self employed) and a contract of service (employed). They pretend that their drivers are former category when they are in reality the opposite. They are legally and factually different concepts. A taxi driver in Canterbury was explaining it to me once. They would set up somewhere and offer the best rates in town so most of the self employed owner drivers would sign up and drive for them. Then when they have finished off the competition they start lowering the drivers rates and swamping the circuit with ever more drivers who feel they have to work all hours god sends to make the same money as before. This naturally gives the company a lot of power. So if you were an employee you would get an hourly rate for x number of hours per week and overtime. On Uber and the like, you just get paid for what you do so you could literally be on call and ready to work a day long shift, but get two fares in a day so you earn £15 or some such. That’s why this has gone all the way to the Supreme Court because the implications are so massive for their business model.
Also from the Beeb article Uber may now be classified a transport provider and have to pay 20% VAT, though it notes:
HMRC and Uber are still in dispute about the firm’s VAT liability.
I’m also not sure if Uber’s employees could also now be subject to PAYE as opposed to being self-employed and responsible for their own tax affairs.
I think that must follow.
If Uber drivers are employees as the Supreme Court says, their employer is responsible for deducting income tax before passing payment to them. I think Uber also needs to auto-enrol them in a pension scheme!
Inevitably, customers will have to stump up higher fares and most Uber drivers will be forced into a less flexible “permanent employment” they never asked for. Or they’ll just lose their income altogether when Uber pulls out from the U.K.
A hollow victory
Personally I feel that it is fair if prices go up because necessary taxes, minimum wage and employee benefits now need respecting.
Perhaps they don’t represent ‘most Uber drivers’, but it’s notable that the case was started in 2016 by the employment tribunal of two Uber drivers, Mr Aslam and Mr Farrar, and the ‘victory’ was welcomed by the GMB and TUC unions according to the original coverage of the case in 2016: Uber drivers win key employment case - BBC News
That same BBC article also contains the following quote from a less pleased Uber driver:
There’s no pleasing everybody, but I guess time will tell how this plays out.
Oh, and welcome to the forum 
I agree, that there may be some unintended consequences, but do you remember the massive row there used to be about introducing the minimum wage which came in 1998 !?
There were a lot folks who forecast it would mean the end of civilisation as we know it, but does anyone now seriously say that was a bad thing and we should go back to the days of old ?
People will still need rides if Uber leaves the UK, these drivers aren’t going to be left up the swanny.
There’s plenty of alternatives to Uber already (Lyft, Bolt, Kapten etc.)
Frankly, if the only way Uber can survive is by taking advantage of it’s drivers then it might not be that resilient of a business in the first place and their inability to continue should be seen as a positive.
I think it is quite a strong business. If you believe the internet, the chief executive reportedly made $45m in the year end 2018. He may make a but less if his drivers get a better deal, but I hope and pray that he will pull through.
Why would drivers choose to work for a company that allegedly “takes advantage” of them when they could work for one of the alternatives you mentioned?
Uber already pays all the necessary taxes.
If drivers want a wage (as opposed to fares), they’re free to go work for a minicab employer that’s pays the min wage. But it seems lots of drivers choose to work for Uber instead? Perhaps they don’t care about “employee benefits” and see flexible work as the most important benefit?
Now that choice will be taken away from them. By the actions of a small handful of drivers, and a bunch of judges whose lifestyle and preferences are a million miles away from the drivers they claim to be “protecting”
Why can’t we just let people work for whom, and in what way, they choose? What an illiberal society we’re becoming.
By clamping down on Uber and manipulating their business model, the courts are just hampering choice for drivers, and raising fares for customers.
Sure it does, but the high court ruling means the may now additionally need to pay VAT themselves as well as minimum wage and employee benefits, thus causing a price increase.
Possibly. It may also be that Uber coming into the market at lower prices means that other employers suffer pressure that drives their own prices and driver benefits down to compete - a race to the bottom, hopefully reset by the court ruling?
I think that’s the main problem, of course people will choose to work for a business that can provide plentiful work, but if that is done by undercutting other businesses, in part through not providing adequate workplace benefits to people who really are their employees, then it isn’t a good thing whether the employees have a choice to leave or not. Of course another potential way around this issue could be a really stong Uber drivers’ union, to ensure that individual employees aren’t being taken advantage of.
One of the best things about technology is its ability to lower prices for consumers, and to reduce the burden on workers to slavishly follow the 9-5 template, and be reliant on long term employment with a single employer.
Sadly there will always be people with vested interests in hampering and delaying that progress.
Why, in this discussion, do we treat Uber drivers with such intellectual disdain? Why do we assume that we know what’s best for them, better than they do themselves? That we should decide what benefits and what flexibility they’re entitled to choose?
Uber’s “race to the bottom” could only succeed if they provide a better experience for both customers and drivers. Because they need lots of both.
And since we live in a free society, and customers and drivers freely choose to use Uber in their droves, who are we to decide Uber’s model is wrong and must be changed?
I don’t think I’ve done anything of the sort. Many employees benefit from regulated workplaces that include provision of benefits that the government assesses to be neccessary, and I do think that gig economy workers should have access to the same benefits too. Maybe an opt out system could be put in place for those that would prefer not to have a more substantive position, lots for policy makers to think about, but no need to randomly accuse strangers on the internet of having distain for others during a casual discussion about a court ruling!
Or how about an “opt in” system for people who want to be employed by a minicab company, which surely everyone would choose if the package genuinely was more “substantive” and appealing?
In fact, hey, we’ve already got that opt-in system! Drivers can choose to drive for whoever they like!
it’s Monday morning, I have no idea why you’re so animated about this, think it’s time for a coffee!