Last Friday, Uber lost a legal battle against former drivers as the UK supreme court upheld a ruling that Uber drivers are workers and not independent contractors. This decision could have a massive impact on Uber’s UK business, the drivers’ employees’ rights and the gig economy in general. 

In 2016, two Uber drivers, James Farrar and Yaseen Aslam, started a case against Uber claiming that they worked for the company and they had rights such as minimal wage and paid leave. However Uber argued that they are a platform who simply connects a driver with a passenger. The first ruling in 2016 by a London Employment Tribunal was the first time that an examination had been carried out on whether gig workers are independent or employed by a company. 

5 years and a couple of appeals later the UK Supreme Court has granted the driver’s statutory rights. Lord Leggatt explained that the decision was unanimous for many reasons, including the fact that Uber set the contract terms without drivers having any say in it and that Uber can terminate the relationship with a driver if he does meet the company’s standards. 

The decision may have a further impact on Uber’s UK business as they could face the possibility of paying £1bn in VAT and interest. The ruling of gig workers being actual workers with employment protection could have a big impact on other companies with the same model as Uber such as Bolt and Deliveroo. 

There has been a demand for more clarity as stated by Lindsay Judge research director at the Resolution Foundation « Rather than leaving all the heavy lifting to the courts, it is time for parliament to debate the questions of employment status in the modern world of work. »

The decision could have an impact on the perception of those inside IR35. If you are inside IR35 that means you may have to pay the additional taxes, but it also confirms your status as a worker and that you have the rights to all the statutory benefits that come with it such as minimal wage, paid holidays and a pension scheme. 

If you have any questions about how this may affect you and your business, please contact us or ask for a free consultation