An Employment Tribunal was justified in finding that private hire car drivers approved by and operating through the Uber booking platform were "workers" entitled to certain rights and not self employed persons, the UK Supreme Court held today.

A court originally comprising seven Justices (reconstituted as a panel of six after Lord Kitchin was taken ill) unanimously dismissed Uber's appeal from the majority decision of the Court of Appeal in a test case brought by two London drivers, Yaseem Aslam and James Farrer. The drivers claimed that they were "workers" within s 230(3) of the Employment Rights Act 1996, with the rights to be paid at least the national minimum wage, to receive annual paid leave and to benefit from certain other protections.

On appeal, Uber argued that it acted solely as a technology provider with its London subsidiary acting as a booking agent for drivers approved by Uber London to use the Uber app. When a ride was booked through the Uber app, a contract was made directly between the driver and the passenger. The fare, calculated by the app, and paid by the passenger to Uber, was collected on behalf of the driver and paid to them under deduction of a “service fee” for the use of Uber's technology and other services.

This was supported by the wording of the standard written contracts between Uber and drivers, and between the Uber companies and passengers. Uber also emphasised that drivers were free to work when they wanted and as much or as little as they wanted. Drivers were therefore independent contractors.

Lord Leggatt, with whom Lord Reed, Lord Hodge, Lady Arden, Lord Sales and Lord Hamblen agreed, did not accept this argument. As on the facts there was no written contract between the drivers and Uber London, the nature of their legal relationship had to be inferred from the parties’ conduct, and there was no factual basis for asserting that Uber London acted as an agent for drivers.

The correct inference was that Uber London contracted with passengers and engaged drivers to carry out bookings for it. In any event, it was wrong in principle to treat the written agreements as a starting point in deciding whether an individual was a “worker”.

The purpose of the relevant employment legislation was to give protection to vulnerable individuals who have little or no say over their pay and working conditions because they are in a subordinate and dependent position in relation to a person or organisation which exercises control over their work.

There were five aspects of the findings made by the Employment Tribunal which justified its conclusion that the claimants were working for and under contracts with Uber:

  • First, where a ride was booked through the Uber app, it was Uber that set the fare and drivers were not permitted to charge more than the fare calculated by the app. Uber therefore dictated how much drivers were paid for the work they did.
  • Secondly, the terms on which drivers performed their services were imposed by Uber: drivers had no say in them.
  • Thirdly, once a driver logged onto the app, the driver’s choice about whether to accept requests for rides is constrained by Uber. Drivers were penalised if too many trip requests were declined or cancelled.
  • Fourthly, Uber also exercised significant control over the way in which drivers delivered their services. Methods included passengers being asked to rate the driver after each trip, with any driver who failed to maintain a required average rating receiving warnings and potentially having their relationship with Uber terminated.
  • Fifthly, Uber restricted communications between passenger and driver to the minimum necessary to perform the particular trip, and took active steps to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride.

Taking these factors together, the transportation service performed by drivers and offered to passengers through the Uber app was very tightly defined and controlled by Uber. Drivers were in a position of subordination and dependency in relation to Uber such that they had little or no ability to improve their economic position through professional or entrepreneurial skill. In practice the only way in which they could increase their earnings was by working longer hours while constantly meeting Uber’s measures of performance, and the drivers were rightly found to be “workers”.

The Employment Tribunal was also entitled to find that time spent by the claimants working for Uber was not limited (as Uber argued) to periods when they were actually driving passengers to their destinations, but included any period when the driver was logged into the Uber app within the territory in which the driver was licensed to operate and was ready and willing to accept trips.

The case now goes back to the Employment Tribunal to assess the compensation  payable.

Click here to access the judgment.