Uber has lost an appeal against a tribunal ruling that it must give its drivers employment rights.
The ride-hailing app went to the Employment Appeal Tribunal (EAT) to challenge an earlier ruling by the Employment Tribunal which said Uber drivers are entitled to basic workers' rights.
The EAT rejected Uber’s argument that it is merely an agent that connects drivers and passengers, and confirmed the Employment Tribunal’s decision.
"I welcome the outcome of today's ruling. It's not only morally wrong to have drivers denied their workers' rights, but with many feeling they must work long hours, with few breaks, just to get by, it also presents a serious risk to public safety," said Labour's London Assembly economy spokesperson, Fiona Twycross.
"The London Assembly have argued that workers' rights should be a condition of granting private hire licenses to operators in general and we've asked the Mayor to lobby the government on this issue. Legislation must be put in place to ensure other operators don't try their luck in the same way."
"It is astonishing that the employment tribunal granted the two drivers worker status. A key element of being a worker is having to turn up for work even if you don’t want to. This is clearly not the case with people who drive through Uber – they choose when and how long they work for by logging on or off the app," said Chris Bryce, chief executive of the Association of Independent Professionals and the Self-Employed.
"The growing number of employment tribunals linked to the gig economy shows there is a fundamental lack of clarity over what it means to work on your own behalf. The government needs to seriously consider introducing a statutory definition of self-employment. That would bring greater certainty and reduce the need for further tribunals. This would help both individuals unsure of their status and companies wishing to engage people on a self-employed basis."
Nick Elwell-Sutton, partner at Clyde & Co, said today's ruling should not be taken as the last word, given that the issue is "likely to reach the Supreme Court".
"The final outcome of this case will provide employers with much needed clarity in this area. But uncertainty is likely to linger until the Supreme Court has and possibly beyond that, if the Government commits to legislative changes," he added.
"The cloud of uncertainty looming over the gig economy has undoubtedly made new businesses in the UK cautious about building a business model around a self-employed ad-hoc workforce, which may be further stagnating growth and therefore damaging the UK economy. This is particularly concerning as the Brexit clock keeps on ticking - the UK needs to ensure it is demonstrating that it is open for business and at the very least showing business that there is legal clarity around alternative employment practices."