The justices criticized the legal agreements that Uber requires drivers to sign before working that classifies them independent contractors. The court said Uber did not have the power to “determine for itself” whether or not worker protection laws apply to its drivers.
Uber said it would send a survey to drivers to measure their views on the ruling and worker flexibility, to better gauge how to adjust their model to conform to the ruling. As the case plays out in the employment tribunal, Uber may rely on the appeal of gig work for some people — the ability to work as much as or as little they like.
The case traces back in part to 2015, when an Uber driver, James Farrar, was assaulted by a passenger in London. After Uber did not cooperate with the police investigating the incident, Mr. Farrar became involved in an emerging labor movement among drivers pushing for a minimum wage. Without a pay guarantee, Mr. Farrar said, Uber was able to flood the British market with drivers, who were left competing for a limited number of rides, depressing their income.
In 2016, the drivers filed a claim with an employment tribunal.
“All Uber has to do is ensure that the work they give crosses the line of minimum wage,” said Mr. Farrar, who is now general secretary of the App Drivers & Couriers Union. “The sad part of this is we worked so hard for such a modest ask.”
In Britain, the national minimum wage for people over 25 is 8.72 pounds an hour.
Uber, which has been struggling to become profitable, has counted on classifying workers as independent workers to keep costs low. In 2020, the company reported a net loss of $6.8 billion.
Daniel Ives, an analyst with Wedbush Securities, said the British ruling could be a “nightmare” for Uber if it increases its labor costs. London is one of Uber’s top five markets globally, he said.
“This case could set a precedent for other workers and companies in the gig economy throughout the U.K. and Europe which would be a body blow to the overall ecosystem,” Mr. Ives said in a note to clients.