It was a measure of how far the sharing economy has already transformed our daily lives and Uber’s revolutionary impact on mass transit that yesterday’s employment tribunal ruling in London led the evening news and is splashed across the front pages today. The tribunal, which has been running for over a year and is seen as a test case for a number of other pending actions in the UK, was brought forward by several Uber drivers represented by the GMB Union. The Judge’s full findings can be read here: https://www.judiciary.gov.uk/wp-content/uploads/2016/10/aslam-and-farrar-v-uber-reasons-20161028.pdf. The tribunal decided that Uber drivers, despite the lack of any obligation to work any fixed hours, were ‘workers’, a kind of halfway house between contractors and employees, opening Uber up to claims for holiday pay and having to pay drivers for time when the app is switched on and they are not picking up fares. Uber has already announced its intention to appeal the decision.
This decision was welcomed by the vested interests of the trade unions and the employment law profession, both of whom stand to gain enormously from halting the independence and flexibility the gig economy has created for thousands of individuals in the UK and millions worldwide. Currently Uber drivers are free to reject any job they don’t wish to take, to turn on and off the app whenever they feel like it, they are able to work incredibly flexible hours that allow them to do other jobs or to manage family and other commitments. That freedom, flexibility and lack of obligation to Uber have attracted an estimated 40,000 drivers to sign up to a new way of working. Yesterday’s decision risks destroying that way of life, if Uber has to pay drivers for hours when using the app but not driving it will quite reasonably no longer allow drivers to turn jobs down. If it has to start handing out holiday pay then the freedom to turn on and off the app whenever drivers like will almost certainly also end.
It is no surprise therefore that polling shows that by margins of more than five to one, Uber drivers do not want to be classed as workers, they have chosen the flexibility of the self-employed lifestyle. They tend to earn much more than your typical worker, the average Uber driver takes home £16 an hour, after costs are taken into account, they’re still earning an estimated £12 an hour, significantly above the new National Living Wage. In London those numbers are higher still. All those numbers will fall if Uber has to switch to an inflexible and highly regulated model of operating.
That is just to talk about the negative impact on Uber drivers, for consumers the consequences will also be significant, and bad. The number of Uber drivers can be expected to fall if changes in working practices are forced upon the company, that will mean longer waiting times, and higher and more frequent price surges. The costs associated with turning self-employed contractors into workers will also be passed onto consumers, leading to an increase in basic fares. Uber has been revolutionary for passengers, opening the private hire industry up to hundreds of thousands of new consumers for whom the expensive and highly regulated taxi industry was out of reach. Yesterday’s judgement puts all that in jeopardy.
It is one of the great ironies of the current situation that it is forces on the left who are most vociferously opposed to the gig economy phenomenon, despite the fact that it aligns with so many of the left’s policy aims (though these are far from exclusive to them). The big rise in self-employment through the gig economy has helped us to come out of the 2008 financial crisis with record levels of employment. The gig economy also allows incredibly flexible working time with limited or non-existent obligations to the platforms, meaning contractors can prioritise family and personal commitments. On the environmental side, Uber specifically has taken more cars off the road in total, carrying more passengers, helping to reduce congestion and improve air quality. Such positive developments should be welcomed by progressive forces, that they are not is difficult to comprehend.
If Uber loses its appeal it could be time to accept that employment and labour laws need updating, as the Prime Minister has already hinted before yesterday’s ruling. Such a change would also fit into the broader agenda this and the last government has had of giving people greater control over their own lives. Whatever one’s views on the tribunal decision, the three judges had to operate using the guidance of legislation which may no longer be fit for purpose as the digital revolution gathers pace. Any changes need to embrace the flexibility the gig economy has given consumers and workers, not attempt to roll back the clock to a pre-internet age.