Uber is awaiting a ruling from the UK Supreme Court on whether drivers are workers

LONDON – Uber’s problems in the UK are not over, despite regaining its license to operate in London.

The travel company is awaiting a major decision from the country’s top court on whether its drivers should be classified as workers rather than independent contractors.

It’s a case that echoes Uber’s struggle with California regulators over the labor rights of its drivers last year. A loss to the company could jeopardize its business model and have wider ramifications for the so-called concert economy.

This is what you need to know.

It all started with a ruling by the UK Labor Court in 2016.

The court ruled in favor of a group of Uber drivers, led by Yaseen Aslam and James Farrar, who claimed to be workers employed by Uber and were therefore entitled to rights such as the minimum wage, holiday pay. and rest breaks.

Uber insists that its drivers are autonomous, a classification that gives them minimal protection. He does not want them to be treated as workers, as this would reduce the flexibility of the work that his service has known and would entail higher costs for the company.

The company lost every appeal against the original Labor Court decision in the British lower courts and has therefore appealed to the Supreme Court as a final appeal.

Uber says it has improved over time in terms of its drivers ’treatment, introducing benefits such as insurance to cover illness or injury and maternity and paternity payments. But lawyers representing drivers say the firm’s relationship with drivers means it should pay them a minimum wage.

Uber isn’t the only travel platform that has trouble reclassifying its drivers as workers. Free Now, a taxi app jointly owned by Daimler and BMW, said most of its drivers use multiple services and “enjoy the flexibility that comes with that.”

“This, by its nature, would be very difficult and not necessarily beneficial for them to change their status from contractors to workers or employees,” a Free Now spokesman told CNBC.

The Supreme Court will rule on Friday around 9:45 a.m. London time. The sentence will be broadcast live on the court’s website.

Friday’s ruling could have huge long-term consequences for Uber and the UK’s concerted economy, which has an estimated workforce of 5.5 million people.

For Uber, a loss would mean the company would have to go back to the UK labor court to determine drivers ’compensation.

What will matter in the Supreme Court ruling is not only whether drivers should be classified as workers, but also in what scenarios they work. For example, does a driver work as soon as he opens his app or only after catching passengers? This is what the judges are debating.

Pinar Ozcan, a professor of entrepreneurship and innovation at Saïd Business School at Oxford University, told CNBC last year that the case was an example of “another confrontation of the power struggle between platforms and its members ”.

The world has changed since Uber originally lost the labor court case. The coronavirus pandemic has taken its toll on traveling drivers and demand has fallen amid the ongoing global health crisis. Meanwhile, many today see Uber Eats messengers and other takeaway apps as essential workers, delivering food to people staying home.

The pandemic has led to an “acceleration of concert work,” according to Ozcan, with the loss of jobs due to closure measures.

“I think we’ll see more people questioning how we should redefine the terms of the concert and make it attractive to members (of the platforms),” he said.

“Of course, the platforms will fight because they are really reducing their revenue,” Ozcan said. “This power struggle will increase, if at all, because there will be more people attracted to concert work.”

Uber won a battle last year with the state of California, which had introduced new legislation in an attempt to classify application-based taxi drivers as employees. But voters supported a vote called Proposition 22, which allowed companies like Uber and Lyft to continue treating them as independent contractors.

Uber is announcing a “third way” for the employment status of concert workers, which would offer drivers some protection, but which would guarantee flexible work.

The firm on Monday shared proposals for this model with the EU, ahead of a European Commission review of concert economy platforms. One of the measures Uber has suggested is the benefit fund idea that workers could use for health insurance and free rest.