Uber loses a major case in UK which rules its drivers are workers, a ruling that could impact the ride-hailing giant everywhere including India

Uber loses a major case in UK which rules its drivers are workers, a ruling that could impact the ride-hailing giant everywhere including India
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  • The UK Supreme Court ruled that the ride-hailing giant’s drivers are workers, not gig economy workers.
  • The drivers are now entitled to minimum wage and other employment protections.
  • This ruling could impact all ride-hailing companies like Uber, Ola, Lyft, Bolt etc., who all call their drivers as ‘mini entrepreneurs’ or independent contractors.
Uber just lost a major case in the UK's Supreme Court unanimously ruled that the ride-hailing giant’s drivers are workers, and not just gig economy workers. The drivers are now entitled to minimum wage and other employment protections, ruled the top court.

“When a ride is booked through the Uber app, it is Uber that sets the fare and drivers are not permitted to charge more than the fare permitted by the app. It is therefore Uber that dictates how much the driver is paid and the work they do,” said the Supreme Court during its ruling.

Uber has been fighting the case in the UK for almost five years now, where in 2016 a tribunal court had ruled in favour of Uber drivers Yaseen Aslam and James Farrar. “I am overjoyed and greatly relieved by this decision which will bring relief to so many workers in the gig economy who so desperately need it. During the six years of these proceedings, we have watched the government commission and then shelve a review of the gig economy yet do nothing to help us. I hope in future the government will choose to carry out its duty to enforce the law and protect the most vulnerable from exploitation,” Aslam said in a statement today after the verdict.

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This ruling could impact all ride-hailing companies like Uber, Ola, Lyft, Bolt etc., who all call their drivers as ‘mini entrepreneurs’ or independent contractors, which gives them the flexibility to also switch between apps.

However, Farar called this a false dream of endless flexibility and entrepreneurial freedom. “The reality has been illegally low pay, dangerously long hours and intense digital surveillance. I am delighted that workers at last have some remedy because of this ruling, but the government must urgently strengthen the law so that gig workers may also have access to sick pay and protection from unfair dismissal,” he said in a statement today.

This could also impact Uber’s case across the globe, where it is often put under scrutiny for its treatment of its driver partners. Earlier, Uber and Lyft had lost a similar case in California where the court had ruled that they must treat their drivers as employees, giving them benefits and wages they are entitled to under state labor law.

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In India too, Uber and Ola drivers have often gone on strikes demanding better compensation from the ride-hailing companies. Most recently, in September 2020, Uber and Ola drivers in Delhi NCR had gone on a strike demanding hike in their per kilometre fare as well as a reduction in the commission that the companies take.

While foreign judgements have no authoritative value on Indian courts they do have persuasive value. “There is nothing under law that requires Indian courts to uphold foreign law, however foreign judgements can be applied as having persuasive value if there are structural similarities in the facts of a case (between the foreign and domestic cases). For example, in the Aruna Ramchandra Shaunbag v. In a number of cases concerning constitutional law, the courts have quoted foreign judgements and principles for persuasive value. Within the common law tradition, its common to borrow and cite foreign judgements for persuading a case,” a lawyer told Business Insider.

In a report evaluating the benefits offered by the likes of Uber and Ola during the COVID-19 pandemic, the Observer Research Foundation had said, “The current scenario, in which livelihoods and health of an entire workforce are threatened, proves that flexibility cannot come at the cost of most basic protections. All workers – irrespective of their unemployment arrangements – need to be able to access health care, to choose to stay home when unwell, and benefit from income support in case of a crisis-related reduction of working time or job loss.”

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In the recent Budget, Finance Minister Nirmala Sitharaman too had said that gig economy workers in India would come under ESIC (Employee State Insurance Corporation) scheme and minimum wages will apply to all such workers.

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