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Uber loses right to classify drivers as freelance in the UK

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London Black Cab Drivers Protest Against Uber Photo by Carl Court/Getty Images

A panel of employment tribunal judges in the UK ruled that Uber drivers should not be considered freelance, but instead should be paid a living wage, according to The Guardian. The ruling is a blow to the San Francisco-based ride-hailing company, which has long argued that its drivers are independent contractors not entitled to traditional employee benefits. Uber says it plans on appealing the decision.

Much like similar rulings in the US, the initial impact of the UK decision is limited to two drivers. But lawyers representing them were optimistic that the ruling could have broader implications.

“This is a ground-breaking decision,” Nigel Mackay from the employment team that represented the drivers, told The Guardian. “It will impact not just on the thousands of Uber drivers working in this country, but on all workers in the so-called gig economy whose employers wrongly classify them as self-employed and deny them the rights to which they are entitled.”

Indeed, the case could open up Uber to claims from thousands of drivers in the UK, and could have implications for other companies in the gig economy as well. In a statement, Jo Bertram, regional general manager of Uber in the UK, said that surveys of drivers hold that a majority prefer the flexibility of freelance work.

“Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss,” Bertram said. “The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able

drive when and where they want. While the decision of this preliminary hearing only affects two people, we will be appealing it.”

Meanwhile, other decisions affecting the classification of Uber drivers as independent contractors continue to pile up. A few months ago, the New York state Labor Department awarded jobless benefits to two former Uber drivers. The ruling was immediately celebrated as a “game changer” by drivers and advocates who have been fighting to force companies like Uber to better treat its workers.

Yet Uber and Lyft will continue to classify their drivers as independent contractors because their entire business model depends on it. And federal courts and state regulators will make small-bore rulings that seem to directly challenge the crux of Uber’s relationship with its workforce. Class action lawsuits end in settlements (or don’t) that result in incremental changes, some vague promises from Uber, a few extra dollars for the drivers included in the suit, and that’s about it.

“I think the broader effect of all these incremental issues is going to be limited,” said Harry Campbell, an Uber driver who blogs as The Rideshare Guy. “I've talked to drivers who've gone through this process and it's extremely laborious for what you end up with. Uber seems happy to fight these individually or settle since they don't set much of a precedent on a national scale. I suspect we'll see more and more of these but don't think they'll have any real effect on Uber's business model.”