Uber – a (temporary?) victory for common sense over law

Amir Paz-Fuchs
Amir Paz-Fuchs

As a late-October treat, the Employment Tribunal (ET) found that Uber drivers are, in fact, well, Uber drivers. This is less tongue in cheek than what it may seem; for a significant part of the ET’s was more common sense than law. In fact, as the ET went through the case law, it seemed that it was stacked against the claimants. Thus, you have a caddie in a golf club who was paid through the club, which was reimbursed by patrons for whom he provided services; and there is case of a lap dancer who was paid in ‘heavenly money’; and there was even a straightforward precedent of taxi drivers, whose position was (unsurprisingly) very similar to that of Uber drivers. In all these cases, the Courts denied the claimants any employment status, including the low-tiered status of ‘worker’, which would guarantee rights to minimum wage, working time protection and (where relevant) whistleblowing protection, for example, all of which were claimed in this case.

But there’s more law, and more bad news. As may be expected, the contract that existed sought to cover all the bases. The drivers were, initially, referred to as Uber’s ‘partners’ (a striking resemblance to a similar practice maintained by the scourge of workers – Walmart; in a delightful twist – it has just been announced that a collaboration will be tested between the two companies). Later on, in a confusing shift, revised documents referred to drivers as ‘customers’ while those previously known as customers were now ‘users’. And, needless to say, all documents denied any form of employment relationship between Uber and the drivers. Indeed, documentation (and arguments) suggested that not only is there no such relationship, but that Uber itself is not a transportation company at all! It is simply a software company, that developed an app! We return to this point below. But it’s not only the formal documentation. Uber’s lawyers made sure that where they could, the common law tests would point to drivers being self-employed. Thus, the Business Reality test, which asks where the risks lie, point directly where the company wanted it to point. The driver is to supply the vehicle, must meet all the expenses, fund their licences, treat themselves as self-employed for tax purposes, and are not provided with a uniform.

So much for what the company could do. What it couldn’t change, however, was the reality. Uber chose drivers through an interview process. In advertising itself, it referred to the high quality of, you guessed it, ‘Uber drivers’, to the high standard of used as ‘Ubers’ and to its customers as ‘Uber passengers’. How does Uber maintain the high standard of drivers? By encouraging users to rate their experience, initiating ‘quality interventions’ when those are sub-par, and eventually ‘disengaging’ drivers who do not manage to maintain the necessary ratings.

And while Uber vehemently denied exercising any ‘control’ over the drivers, the app suggests the route, which the driver is expected to follow. In addition, while Uber maintained that the driver is a self-employed business, working on its own (and, indeed, purchasing a service from Uber!), he was not allowed to contact the client following the ride, and in particular, was strictly prohibited from giving the client his phone number, as that would be considered solicitation, and thus a breach of the agreement with Uber. Similarly, drivers owed Uber duties of confidentiality, and were obliged not to speak negatively about Uber.

What did the tribunal make of all this? It managed to distinguish some of the cases where the claimant was not an ‘integral’, but rather an ‘ancillary’, part of the business (caddie at golf club, lap dancer at night club). It simply ignored the business reality test. And it regarded the all important (for some) ‘mutuality of obligations’ test as not-so-important after all, if claimants seek to establish worker, as opposed to employee, status.

But in the main, the most striking thread of the ET’s reasoning is its resort to common sense over legal conceptualisation, legal documents and legal masquerade. It cites with agreement Elias J (as he was then) in Kalwak (reversed by the Court of Appeal), who warned about ‘armies of lawyers’ who simply place clauses in employment contracts to make them appear different from what they truly are. And it went further, expressing, perhaps, no less than indignation. The passages are worthy of quoting at length:

[87] “We are struck by the remarkable lengths to which Uber has gone to compel agreement with its (or perhaps we should say its lawyers’) description of itself and its analysis of the legal relationship between the two companies, the drivers and passengers. Any organisation (a) running an enterprise at the heart of which is the function of carrying people in motor cars from where they are to where they want to be …. But (c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services and (d) resorting in its documentation to fictions, twisted language, and even brand new terminology merits, we think, a degree of scepticism.

It quotes, in agreement, a similar case decided by the North California District Court (11th March 2015), also rejecting the assertion that Uber is ‘merely’ a technology company, stating succinctly:

Uber does not simply sell software; It sells rides. Uber is no more a ‘technology company’ than Yellow Cab is a ‘technology company’ because it uses CB radios to dispatch cabs.

And the ET continues:

[90] ‘The notion that Uber in London is simply a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous. In each case, the ‘business’ consists of a man with a car seeking to make a living by driving it.

Words to live by, and so rare.

What are the implications of the case? Despite the loud headlines, suggesting that it will affect not only 30,000 drivers in London and 40,000 across the UK, but the gig economy overall, it is worth reiterating that Uber drivers were only guaranteed worker’s rights, which are far more limited than employee’s rights (for example, they have no right for compensation for unfair dismissal). Moreover, Uber immediately wrote to its drivers that it will appeal the decision. Indeed, it continued its ignominious tactics by writing to the drivers that the decision applies only to the two drivers who submitted the challenge, and therefore there is no change in the driver’s ‘partnership with Uber’. This is obviously misleading, to say the least, but to what extent can the decision apply to the gig economy as whole? Other developments, such as the HMRC investigation into the status of Hermes drivers, suggest that authorities are finally awakening to the precarious reality of workers in this brave new world. But for the time being, we can take comfort in what is, at the very least, a temporary victory for commons sense.