Why doesn't Uber operate across the UK?

Court: Uber drivers in the UK are employees

After many years of litigation, the UK's highest court has ruled that the drivers working for the transport service agent Uber are to be regarded as employees. The ruling of the London Supreme Court on Friday confirms the decisions of the lower courts and thus finally clarifies the status of the British Uber drivers. This could have consequences for Uber and other companies in the "gig economy".

As employees, Uber drivers would be entitled to minimum wages and benefits such as paid vacation or insurance. This changes the basis of Uber's business model. The US company, which has expanded worldwide in recent years, sees itself as a provider of a brokerage platform on which self-employed drivers offer their services as sole proprietorships - and therefore refuses to offer any additional employer benefits.

First judgment in 2016

Two former drivers had sued the company before a labor court. The first instance had already decided in 2016 that the drivers must be considered employees. Uber continued the case through the appellate court and the High Court to the Supreme Court, which now had the final say. The highest British court has rejected Uber's objections that the app is only an intermediary platform for independent sole proprietorships.

In its decision, the court took into account that Uber has control over essential elements of the service: Uber sets the price and thus also decides on the earnings potential of the driver. Uber sets the legal framework with its conditions of carriage, in which the drivers have no say. Uber can sanction drivers who refuse to drive or receive bad reviews from passengers. Such factors indicated that Uber drivers were subordinate to the company.

The plaintiffs celebrate the judgment as a decisive breakthrough and now want to ensure that the drivers concerned receive compensation. "This is a win-win-win for drivers, passengers and the cities," James Farrar, general secretary of the ACDU drivers' union involved in the lawsuit, told the BBC.

Cornerstone of the "gig economy"

Treating drivers as independent entrepreneurs is a cornerstone of the business model of Uber, its direct competitor Lyft, and other "gig economy" startups. They arrange trips or delivery tours to "self-employed" drivers and collect a hefty commission without incurring the same costs as a transport company with permanent employees. In the financial markets, Uber & Co. have long been considered the next big thing.

Uber will "respect" the verdict, said Northern Europe boss Jamie Heywood of the BBC - the company has no choice either. However, Heywood is downplaying the effects of the decision: It only has consequences for a small number of drivers who worked for the company in 2016. "Since then we've made some significant changes to our business model." The company likes to react to legal headwinds: The requirements of the courts are met with small changes to the business process, but on the surface things continue to run.

Resistance in Germany

In other countries too, start-ups like Uber are resisting the "disruption" of public transport. In Germany, the company has already undergone numerous skins: After court rulings that declared the current business model to be unlawful, Uber has slightly changed its approach and can continue to offer its services. This is also due to a passenger transport law from the pre-digital age.

The federal government now wants to change that. With the ongoing reform of the Passenger Transport Act (PBefG), the Federal Government, on the initiative of Federal Transport Minister Andreas Scheuer (CSU), wants to open the market for providers such as Uber or new shuttle services and loosen the existing restrictions. The project was last week in the Federal Council, which still has change requests.

Taxi demos in Berlin

Meanwhile, several hundred taxi drivers protested against the planned amendment to the law in Berlin on Friday. A car parade moved from the Brandenburg city center through Berlin to the CDU federal office. "Don't give Uber a chance" and "Stop scouring", it said on banners. "The taxi industry will not let the butter be taken from the bread and fight for fair competition," said the initiator of the protest in Berlin, Erkan Özmen, of the dpa. Taxi drivers had demonstrated several times in Berlin in the past few months. The Federal Association of Taxi and Rental Cars announced demonstrations across Germany.


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