For those looking for an extra bit of income on top of another job, that might be a sensible arrangement, particularly if you own the car already. But for those treating Uber as their main source of income, the situation is more troubling. Uber looks like it is skirting around employment rights in order to cut costs under the pretence of self-employment. As the tribunal notes, it appeared to be ‘resorting in its documentation to fictions, twisted language and even brand new terminology’.
Whether someone is self-employed or not is tested in English law by whether they are deemed to have a ‘contract of service’ or a ‘contract for services’. For example, if a company tells a worker that they have to be in a certain place for a certain period of time to perform specified tasks, that degree of control suggests that there is a ‘contract of service’ – they are employees of the company. If, on the other hand, a company says, ‘show up when you want, we’ll pay you for what you do’, or, ‘here’s a specific task, do it by a certain date, but in a manner of your choosing’, that looks more like self-employment. In that case, the worker gambles that they will earn enough money based on what work is available, and must make their own arrangements about holiday pay and sick pay. Given the up-and-down nature of self-employment, charges usually reflect the need to cover those extras.
The trouble with the gig economy is that it doesn’t neatly fit into either of these two scenarios. Yes, Uber drivers can just log on when they want to and earn money for accepting passengers. But Uber would be incapable of offering a service to the public if it couldn’t rely on a certain number of drivers being available, and so it has an incentive to pressure drivers into working more than they might otherwise do. It’s not just Uber, either. Other gig-economy companies like Deliveroo have also been accused of making considerable demands of workers while claiming they are self-employed.
Is Uber providing a cheap taxi service to customers by forcing down drivers’ incomes? The company claims that, on average, drivers make around £14 per hour, but after expenses – including much higher car-insurance premiums for cab drivers – the actual net gain to drivers could be much lower. In the meantime, other kinds of drivers, with greater existing protections (like London’s black-cab drivers) are undercut by lower-paid drivers.
Actually, part of the reason Uber can charge lower rates is that drivers are idle less of the time. As soon as one job is finished, another one can be quickly found. Moreover, by cutting the price of getting a cab, more people are likely to use cabs, expanding the market and increasing the potential of making a living out of driving. Some of the cost of a traditional black cab is essential to provide an incentive for potential drivers to put in the long period of study (three years is the norm) to do ‘the knowledge’: learning every street and landmark within a certain distance of central London. But the necessity to go through that process has largely been removed by satellite-navigation systems. Driving a cab has been deskilled to a significant extent.
Uber has, without doubt, been a boon to passengers. New technology is making it cheaper and more efficient to provide transport, even if, in the process of deskilling work, some workers lose out as they can no longer charge a premium for their skills. However, companies shouldn’t be taking advantage of the situation to circumvent workplace protections.
So will the tribunal ruling have a profound effect on the gig economy? That seems doubtful. Uber can no doubt make marginal changes to its practices and contract wording to ensure that its drivers fall firmly into the category of ‘self-employed’. After all, most Uber drivers surely earn at least the minimum wage, or they wouldn’t bother working for Uber.
But what is really needed is a more profound look at how workers and companies can enjoy the flexibility of these new economic forms without preventing innovation or steamrollering workers’ rights. A tribunal ruling on off-the-shelf concepts of employment is unlikely to be the best way to do that.
Rob Lyons is a spiked columnist.
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