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Ride-sharing company, Uber, lost its appeal against a decision by the Employment Appeal Tribunal in London which stated Uber drivers deserved to work for a minimum wage rather than be self-employed.
The decision handed down on Friday is a big setback for the disruptive company who is struggling to maintain its services in many major cities. The appeal was made after drivers James Farrar and Yaseen Aslam won an employment tribunal case last year. The pair argued that they should be classified as workers with rights such as minimum wage and holiday pay, rather than self-employed as Uber insists its drivers are.
Uber defended its position saying that its drivers enjoy the flexibility of the self employed status which entitles them to only basic rights such as health and safety. The Silicon Valley based company compared its model to drivers that operate minicabs or private hire vehicles, a tradition that has occured in Britain for more than 50 years.
Appeal loss a win for drivers
After the win Aslam was quoted saying: “I have been campaigning against Uber since 2014 and, although I always knew I was on the right side, it has always been a struggle that has brought enormous pressure on us. I am glad that the judge today confirmed what I and thousands of drivers have known all along: that Uber is not only exploiting drivers, but also acting unlawfully.”
Uber loses license but can operate as appeals proceed
Uber is expected to appeal the latest decision in a higher appeals court. Uber was left stunned in September when the Transport for London failed to renew its license stating that the company was unfit to run a taxi service. it blamed the company's reputation for slow reporting of criminal activities and poor driver background checking as part of the reason. The company is allowed to keep operating in London until the appeals process is complete, which may take months or even years of legal proceedings.
Shared economy may need to rethink workers' rights
This latest appeal loss will be of major interest to other ‘shared economy’ companies who employ workers on a ‘gig’ basis rather than a fixed contract. These types of employment arrangements have come under fire for creating a generation of vulnerable workers who have no benefits and are currently under pressure to work more for less. Frances O’Grady, general secretary of the Trade Union Congress, saying commented on the results said: “Uber should throw in the towel and accept today’s judgment. No company, however big or well-connected, is above the law. Uber must play by the rules and stop denying its drivers basic rights at work. This ruling should put gig economy employers on notice. Unions will expose nasty schemes that try and cheat workers out of the minimum wage and holiday pay. Sham self-employment exploits people and scams the taxman.”
Many companies like food delivery service, Deliveroo, follow the Uber model where employees are paid only for the time they work and do not receive any job security or benefits.