The ongoing battle over the classification and pay levels of Uber Technologies (NYSE: UBER) drivers now has a significant decision in the United Kingdom as part of the growing body of law surrounding gig drivers.
In upholding a lower court ruling, the highest court in the U.K. ruled that a group of plaintiffs made up of former Uber drivers were entitled to a minimum wage while working for Uber. According to an article on the ruling in The Wall Street Journal, the lower court decisions “granted the group of 25 drivers a type of U.K. employment status at Uber.”
Ironically, the decision comes just a few days after Uber had released a white paper entitled “A Better Deal for European Platform Workers.” In the white paper’s foreword, Uber CEO Dara Khosrowshahi said Uber “believe(s) that independent workers across Europe deserve better, work that offers flexible and decent earning opportunities when they want it and protection and benefits when they need it.”
The current U.K. hourly minimum wage is GBP 8.72, increased last year from GBP 8.21. At current conversion rates, that equates to $12.22. The federal minimum wage in the U.S. is $7.25 an hour.
The U.K. High Court, in rejecting the Uber appeal, backed up several key findings from earlier litigation. The court said it was “clear … that claimant drivers were workers who worked for Uber London under ‘worker’s contracts.’” It also said the fact that an Uber driver could turn down work “is not fatal to a finding that the individual is an employee … and does not preclude a finding that the individual is employed under a worker’s contract.”
The nature of the relationship between Uber and its drivers means that the drivers “have little or no ability to improve their economic position through professional or entrepreneurial skill,” the court wrote. “In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.”
According to press coverage of the decision, the ruling does not set a sweeping precedent for all current drivers. It applies only to the former drivers in the case. The case goes back several years, with one of the court decisions in favor of the drivers coming down in October 2016.
“We are committed to doing more and will now consult with every active driver across the U.K. to understand the changes they want to see,” the WSJ quoted Jamie Heywood, Uber’s regional chief for Northern and Eastern Europe, as saying in response to the decision.
In the U.S., the most contentious battleground between Uber and advocates pushing for gig workers to have employee status has been in California. That state’s AB5 law would have forced Uber, Lyft and DoorDash, as well as similar companies, to reclassify their drivers as employees. Just before Election Day 2020, a California court held that the drive-sharing companies needed to reclassify those drivers immediately after having resisted for months following AB5 going into effect Jan. 1, 2020.
But the success of Proposition 22 on Election Day, which exempted those types of drivers from AB5, effectively made that moot. The supporters of AB5 have fought Prop 22 in court, but last week the state’s Supreme Court declined to hear a suit that challenged the results of the statewide initiative, which won by a healthy margin.
Soon after the Prop 22 victory, Uber announced a change in several policies for its drivers in California, calling them “Prop 22 benefits.” Among them was a guarantee for drivers that they would receive at least 20% more than the minimum wage of the pickup city, a number that can fluctuate depending on the city. (For example, the San Francisco minimum wage is $16.07.) On top of that would be a payment of 30 cents per mile for expenses.
There were also benefits for injury protection and a health care insurance stipend.
The Uber European white paper refers to a push to have “transparent” earnings several times in the document. It also notes that the company already had introduced “new tools to provide more control and transparency over earnings.” In several countries, that tool provides drivers with a wider range of information on fares, distances and destinations before a trip commences.
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