A ruling by the London employment tribunal to grant Uber drivers the right to holiday pay and a guaranteed minimum wage has been heralded as a landmark but divisive
On Friday, the GMB union succeeded in winning two of its members the right to be classified as workers, rather than self-employed.
The move has huge repercussions for how some 40,000 drivers in England and Wales operate and expect pay.
It has been hailed by some as a legal ruling that will “uphold workers’ rights”, but sparked controversy from others who fear it sets a dangerous precedent for action against different companies also part of the so-called ‘gig economy’.
Here are five of the strongest and most conflicting reactions from Uber drivers to economists that reveal just how divisive today’s news is:
1. GMB’s General Secretary
Tim Roache, head of the union that represented the two Uber drivers, said today’s ruling helped tackle the firm’s “appalling” employment practices.
“It has far wider implications for work in the 21st century,” Roache wrote in a blog on The Huffington Post UK. “Challenging Uber has the potential to change the working lives of hundreds of thousands of people and the nature of our economy in the next decade...”
“The ruling today says that companies like Uber do have responsibilities. They can’t just shrug their shoulders. No doubt they will appeal instead of facing up to their responsibilities, but an important victory was struck today that has the potential to impact on the world of work for years to come.”
2. The Institute of Economic Affairs
The IEA thinktank takes a drastically different view, saying that Uber is “no different” from many other Internet companies and that today’s ruling would hurt both drivers and passengers.
“Uber is no different from the dozens of other sharing platforms, such as Airbnb and eBay,” Mark Littlewood, Director General at the IEA said. “It would be laughable to suppose that those who run their business through eBay should expect sick pay and holiday leave from the tech firm.
“Forcing regulations such as the minimum wage and the Working Time Directive onto sharing platforms will invariably increase their operating costs and force them to scale down.
“Drivers and consumers will pay the price through a limited number of ‘jobs’ with Uber and higher prices for customers.”
3. An Uber driver
One of those who faces the greatest immediate benefits of today’s ruling spoke with joy when he was filmed by Channel 4’s Ciaran Jenkins giving his reaction.
“That feels great,” he said, asked how he felt about now being classed as a worker.
“That upholds the rights towards the people, those who are working for the companies and making it possible for them to earn an enormous amount of the profit.
“But they also need to contribute and respect the law of the land that allows them to operate. I think today is a landmark case and the judgement is the recognition to uphold the workers’ rights.”
4. Crossland Employment Solicitors
One legal firm has warned instead that there will now be “major financial implications” for Uber that will hit small business who depend on the flexibility of their staff to survive.
“The cost of engaging the drivers will increase,” the firm’s managing director Beverley Sunderland claimed, “as it will have to pay both the minimum wage and give paid holiday.
“It’s also very likely that there are already a number of potential cases waiting in the wings and this decision is likely to encourage many others to come forward.
“It remains to be seen if these higher costs will be passed on to the consumer in the form of higher fares, or whether it may even threaten the very existence and long term viability of the Uber business model.”
She continued: “All businesses in the ‘gig’ economy which rely on a similar business model will be very concerned about the implications of this decision.
“These businesses often argue that the use of self-employed independent contractors allows them to respond to customer demand in a fluctuating market and that such flexibility is essential to allow the business to grow and survive.”
5. The Resolution Foundation
Low- and middle-income thinktank backers The Resolution Foundation hailed the “welcome news” today but warned it was “far too early” to predict the ramifications for cases like this on the wider labour market.
The Foundation’s Director Torsten Bell said on Friday: “What though does this mean for Uber? They have already said that they are appealing, but if the judgement stands they will need to make direct backdated payments for the likes of minimum wage and paid holidays, not just for the workers directly involved but for the others that will now come forward.
“But beyond that they have two broad choices. They can treat their drivers as workers and continue to make such payments going forward, while presumably seeing what part of those increased costs can be passed onto customers.
“Or they can change their business model to respond to the detail of this judgement so they can argue that even if drivers were not previously correctly treated as self-employed they now are.”