Catching (an) Uber? – Could the Supreme Court’s decision against Uber have a broader impact than imposing merely employment rights on online platforms within the gig economy?
Online platforms generate more traffic than any other type of website and, in proportion to their popularity, they face increasing scrutiny from regulators and the courts.
Following the UK Supreme Court’s recent decision in the appeal brought by Uber (which appealed against an earlier Court of Appeal decision on the employment status of the company’s drivers), it is now clear that Uber drivers are to be classed as “workers”. This means their drivers are entitled to certain employment rights such as the National Minimum Wage, protection from unlawful discrimination and statutory minimum levels of paid holiday.
The obvious implications of this for other online platforms running similar models are clear. Although other platforms will have a different setup, this shows the Supreme Court’s intention for an open approach in assessing personal service and control. Individuals previously considered an “independent third party contractor” may not be. Any online platforms that rely on the fact that their contractors, or those they introduce to the consumer, are third parties should be cautious that their engagements may come under scrutiny.
This decision however also needs to be viewed in a context of broader legal scrutiny of online providers. Online platforms that provide access to third-party services often seek to avoid the regulatory requirements of the services themselves. For example, an online platform that allows visitors to ask queries directly to “experts” may claim to be merely an introducer. This is usually justified on the basis that the contract for the activity itself is directly between the consumer and the “expert”. Taking an open approach to interpreting the relationship with contractors, however, moves the online provider closer to those contractors. If the above were workers and the online platform is deemed to be the “employer” of a regulated self-employed “expert”, then the logical next step would be that the online platform itself would be subject to the same regulatory body. This brings in numerous obligations that the platform may not have previously considered. Fintech is especially open to these issues. Many will remember Uber had battles over taxi licencing in a number of jurisdictions.
The contracting community should also pay attention to the decision in Uber. This shows a clear intention of the courts to focus on the actual relationship between the individuals and the platform. The specifics of the contract are neither necessarily relevant nor the endpoint. Although this is a reinforcement of the approach contractors and businesses should already be taking to IR35 and Off-Payroll matters, this is a clear example from the Supreme Court that the contractual arrangement is meaningless unless it is a true reflection of the engagement. This makes status determinations complex.
Although the focus in the aftermath of the Uber decision has been mostly on the creation of employment rights for Uber workers, the gap between online providers and their contractors and business partners is narrowing and an incorrect assessment of employment or worker status can have much broader repercussions, especially for online platforms. They may not just be an App. They may need to be a regulated employer.
If you think your business may be within scope and impacted by this, or you think it would be useful to assess your contractor arrangements, our team can assist and advise you. Our experts can support you with any status assessments of your contractor arrangements to minimise risk and ensure your business is best prepared for this scenario.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. For advice, get in touch with your usual Greenwoods GRM contact or scroll down to complete our enquiry form.