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Uber Drivers: Self-Employed or Company Workers?

Issues regarding what takes a self-employed individual into worker territory are complex. And two Uber drivers brought claims against Uber regarding unlawful activity. What acts were questioned? The lack of holiday and sick pay, and not receiving minimum wage.

Company employees are entitled to Statutory Sick Pay (SSP) and holiday pay. But self-employed individuals do not have such rights. Uber asserts that all drivers associated with the service are self-employed, as reported by the BBC, but a London-based employment tribunal thought otherwise.

How Uber Works

Uber allows interested drivers to sign up for the service and set their own hours. The idea is to provide flexible work for those who are interested while giving potential passengers an alternative to traditional taxis. Drivers sign in when they want to work, and sign out when they don’t. This seems to leave most of the control in the hands of drivers.

Interested passengers use the app to request a driver and receive a price or estimate upfront. A driver accepts the request and meets the passengers at a designated location. Passengers receive a ride and manage the payment through the app. They can even leave if a tip and provide a rating for the driver.

On the Surface

At first glance, Uber is simply a mechanism for connecting drivers and passengers, as well as a secure point for payment. That would mean drivers are technical self-employed and Uber is simply a portal for conducting business. The premise is similar to other freelancing sites that connect skilled individuals to those who need tasks completed.

The Argument

As part of the case, the drivers claim that Uber has more control over their actions than it appears from the outside. First, requests go to the driver closest to the pickup location. That means part of your work is purely up to chance. And, drivers don’t get to see the destination until the job is accepted. That means your passenger may be asking for a 10 minute trip into downtown or an hour long trip to another area.

Additionally, certain fares are controlled by Uber, and the company takes a percentage fee right off the top. That means that, after expenses (like fuel and the driver’s portion of any tolls), it is possible to make less than minimum wage for providing certain rides. And, if you don’t find a rider for your trip back to your home area, then you’re driving back without any incoming funds, effectively cutting the value of your last fare in half.

There are also accusations that Uber takes more than their previously mentioned fee without advanced warning.

The Implications for the Gig Economy

Depending on the outcome of these and similar cases, the implications for the gig economy may be severe. If Uber is an employer, then drivers are entitled to the same rights as employees of other companies. That changes the paradigm dramatically and may lead to the end of the business as we know it.

However, if Uber isn’t officially an employer, then it gives future drivers some perspective on what to expect. Ultimately, the decision to be a driver is yours, and you can change your mind at any time.

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