Uber Technologies Inc. lost an appeal over whether it should pay overtime and give vacation time to its drivers, a ruling that heaps yet more pressure on the ride-sharing company in one of its most mature markets.
The original decision that gave U.K. drivers the right to more benefits was “neither inconsistent nor perverse,” Judge Jennifer Eady said Friday. The San Francisco-based company said the ruling was based on incorrect evidence and that it will appeal to higher courts.
The case may have implications for the broader gig economy, where workers use apps to perform jobs but don’t get benefits or job security. Uber has faced complaints about working conditions around the globe, and the U.K. — the company’s largest European hub — is leading the fight against the service. London’s transport regulator proposed banning it from the capital because of safety concerns, and a 44-year-old female driver sued for sexual discrimination, saying the company doesn’t protect workers.
“Today’s victory is further proof, as if any more was needed, that the law is clear and these companies are simply choosing to deprive workers of their rights,” said Jason Moyer-Lee, the general secretary of the IWGB union, which represented drivers at the appeal.
The case, brought by two drivers, was the first against the company in Britain and could have ramifications for thousands of workers there. Judges in the U.K. have tended to demonstrate sympathy for the argument that the workers should receive more protection. Deliveroo, a London-based food-delivery company valued at more than $2 billion, is also being sued by dozens of riders over the same workers’ rights issues.
“Today’s decision will not just affect Uber but will have a huge impact on other gig economy models,” said Glenn Hayes, an employment lawyer at Irwin Mitchell who wasn’t involved in the case. “Uber have been keen to treat this case as being discrete and have tried to suggest that it has no bearing on the rest of its workforce of around 50,000 drivers in the U.K. That is nonsense. ”
The ruling hits at a central element of Uber’s business model. By treating workers as contractors, not employees, it can keep costs low without taking cars off the road. When rider demand is low, Uber isn’t on the hook to pay the drivers’ wages. In some cases, such as Denmark, Uber has shut down operations over new taxi regulations.
The European Court of Justice, the region’s highest court, is also weighing whether Uber should be regulated as a transportation service, a move that would bring more costly rules to follow.
Uber, in an emailed statement, said the tribunal used an assertion that drivers must accept 80 percent of jobs sent to them when logged into the app, which the company says “has never been the case in the U.K.”
“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed,” Tom Elvidge, Uber U.K.’s acting general manager, said. “Over the last year we have made a number of changes to our app to give drivers even more control.”
Uber has been balancing its attempts to defend its business through the courts, with its new conciliatory approach with regulators under new Chief Executive Officer Dara Khosrowshahi.
In October Khosrowshahi flew to London in an attempt to smooth relations with the city’s transport regulators. Uber’s appeal against the Transport for London’s decision to revoke its license is set to be held on Dec. 11.
The company has also hired Laurel Powers-Freeling, a well-known banking veteran, in a bid to add gravitas to its U.K. business.