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Uber: where next

Philip Kolvin QC looks at the likely fallout from the Supreme Court's ruling on whether Uber drivers were 'workers'.

The Supreme Court judgment in Uber BV v Aslam laid to rest the question of whether the claimants, who were Uber drivers, were workers and so entitled to the minimum wage and holiday pay. But the judgment is likely to lead to much more litigation in three interlocking fields.

First, and inevitably, large numbers of drivers will claim that they too are workers and so entitled to workers’ rights. The Court was unimpressed with the idea that the employer could anoint or disqualify a driver as a worker by altering their contract, since the purpose of the legislation is to protect workers from a position of unequal bargaining power. Whether they are entitled to protection cannot then turn on the language of the contract.

In this context, it is notable that, following the judgment, Uber has not yet accepted that all of its drivers are workers. It is not yet clear whether Uber will try to claim that changes it has made to driver terms mean that the Supreme Court’s decision is mostly of historic interest. But it is not beyond the realms of contemplation that it will do so. In that case, litigation will inevitably ensue.

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Second, the Court was not attracted to Uber’s self-description as an agent for the driver. Its analysis was that Uber contracted with the customer and allocated the driver to deliver the ride.  If Uber is not in fact an agent but contracts with the customer as principal, it may be difficult to avoid the conclusion that it is a transport service provider and so liable to VAT. This is a topic on which Uber and HMRC have been in extended litigation with the Good Law Project, and Uber has allocated contingent liabilities of over £1bn in its accounts. The Good Law Project claims that HMRC has already acceded to its demands and charged Uber £1.5bn in VAT.  There is no independent corroboration of that as yet. But clearly the size of the sums are such that,  if Uber does not pay, further litigation is likely, particularly if, as The Times reports, liability in the UK would mean that Uber also has a liability in all European nations.

Third, the Court’s decision raised an important issue regarding licensing. It doubted that Uber’s claim that it was an agent for the driver was actually consistent with the London licensing regime for private hire vehicles, which seemed to be predicated on the operator contracting with the customer as principal rather than as an agent for someone else. If it does contract as principal, then this has implications for the first two issues discussed above. But if it doesn’t, and each driver is contracting with the customer on their own account, then there is an issue as to whether each driver may be an operator in the place where they are working. I foreshadowed this in my article Beyond Regulation in the Institute of Licensing’s Journal of Licensing. In a week in which it is reported that York Police have started to turn away Uber drivers who are not actually licensed in the City, it appears that this is a still further question arising from the Supreme Court’s judgment. This is quite independent of issues of Uber’s own fitness, admittedly raised principally by trade rivals, stemming from these parallel questions regarding its compliance with fiscal and employment laws in the UK.

The rights and wrongs of all of this are beyond the scope of this brief article. But suffice to say, Uber is still on an interesting journey, whose price and destination are currently unknown.

Philip Kolvin QC is a barrister at 11KBW.

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