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Uber Loses a Legal Battle in the UK

UK Rules that Uber Drivers Are Employees, Not Contractors

The UK’s supreme court unanimously decided to uphold a ruling that Uber (UBER) drivers are employees, not independent contractors. A legal battle between the UK government and Uber about this has been ongoing since 2016.

This decision could have sweeping implications for Uber’s business in the UK as well as for the country’s gig economy as a whole, which employs an estimated 5.5 million people. There are more than 40,000 Uber drivers in the UK, making it Uber’s largest European market.

Arguments on Both Sides

Supporters of the UK court’s decision say Uber drivers are entitled to basic employment rights like a minimum wage and holiday pay. For many people, driving for Uber is their primary source of income and they do not have protections and benefits from another employer.

Uber argues that it is not an employer, but more like an agency which connects drivers and passengers. The company claims most of its drivers appreciate the flexible lifestyle that driving for Uber provides. It also argues that its business model allows it to keep costs low for riders.

Comparisons to Proposition 22 in California

The battle in the UK echoes Uber’s fight against Proposition 22, a proposed California law which would have required Uber, Lyft (LYFT), and other companies to treat gig-workers as employees. The difference is that the bill did not pass in California, and these companies continued operating with their same model. In the UK, however, Uber and other companies employing gig-workers will need to make significant changes.

The UK’s verdict technically only impacts the 25 Uber drivers who sued the company in 2016, but it sets an important precedent for other cases. Uber says it is seeking input from its UK drivers in order to “understand the changes they want to see.” Drivers, riders, and investors will be eagerly waiting to see what is down the road for Uber in the UK.

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