For five million people in the UK, Uber is a fact of life.
Whether it has kept you in lockdown takeaways through the long winter months, or provided your regular ride home back in the age of socialising, its brand has for years been entangled in our one-click lifestyles.
Since it officially launched in San Francisco in 2010, the app we know today has introduced a cheaper way to use cabs. Uber has transformed how people travel in more than 900 cities across the world, and operates in 40 cities and towns in the UK.
As well as the low fares, its ease of use appealed to the smartphone generation. By linking to your payment card, Uber suddenly erased the usual late-night taxi ride detour to find a cash machine, and any need to call up a human being at all.
Another novelty was the rating system: you can rate your driver on a scale of five stars, and they can rate you as a passenger. It’s a concept now so embedded in late capitalism that it was taken to its dystopian conclusion in a 2016 episode of tech-fi series Black Mirror.
“Getting an Uber” became a cornerstone of urban millennial culture: a standard reference in zeitgeisty Netflix series such as BoJack Horseman, Love, and Master of None (the very first scene of which depicts a late-night emergency Uber to buy contraception). In one 2016 episode of the HBO hit Girls, Lena Dunham’s protagonist – the “voice of a generation” – laments while hitchhiking that she was kicked off the app for “low ratings”.
It even played a part in the story of the pandemic. One of the first Covid-19 patients confirmed in London last February took an Uber to A&E, and the company quickly introduced discounted “Uber Medics” rides for health workers. Its data reflects our quarantined psyches: a rise in coffee orders, and restaurant takeaway requests for “no cucumber” rising while those for “no bacon” fell.
Is Uber working?
Yet Uber also manifests a darker phenomenon of modern life. There’s a reason why its fares are more affordable than your average cab: its drivers have been treated not as employees but independent contractors, thereby missing out on the usual workers’ rights afforded to staff on traditional contracts.
Until a week ago, that is. After a six-year battle – with Uber appealing at every juncture – the UK Supreme Court ruled on Friday 19 February in favour of a group of drivers fighting to be classed as workers.
Uber drivers are now entitled to holiday pay and the minimum wage (£8.72 an hour). That is a significant win. In 2016, the average driver had to work 30 hours a week to break even, after Uber’s 25 per cent commission and expenses including car rental, fuel, phone costs and car wash, according to one analysis by the App Drivers and Couriers Union. The New Statesman has seen this analysis, which takes Uber’s own data that “top drivers” in the period of 16-23 May 2016 worked 48 hours and earned £18 per hour in gross fares as a benchmark.
Uber does not recognise this experience, but did not offer the New Statesman an average earnings figure. A study commissioned by Uber in 2018, co-authored by academics and two Uber Technologies employees, estimated that the median London driver earns about £11 per hour spent logged into the app.
For this piece, the New Statesman asked an Uber driver working currently to calculate all his outgoing costs. He has worked for the app for over two years in London and wishes to remain anonymous. He came back with a figure of £51 in daily expenses for a five-day working week, after adding up petrol (£25 a day), congestion charge (£15 a day), and insurance (£11 per working day). He also used to rent a car, which added £220 a week, and there are other vehicle costs, such as changing tyres.
“The money is less than minimum wage,” he says. “I make £4 or less an hour. You need to work 16-hour days to make a living, just to survive, and you are killing yourself from 3pm to 5am, making £120, £130.
“It sometimes feels like it’s better to stay at home, but we have families, we have no choice.”
He is now claiming compensation for minimum wage and holiday pay.
What now for Uber?
During the years of legal wrangling, this case exposed how the “gig economy” – when people are paid per gig – can trap low-paid workers in precarious jobs, behind a veneer of self-employment.
While flexibility is the main reason the majority of drivers join Uber, the Supreme Court outlined how much control the company has over its drivers’ work, and ruled unanimously against its appeal.
Uber’s immediate reaction to the verdict was that it only applies to the small number of drivers involved in this specific case. The company emphasised it had made “significant changes” since the 2016 tribunal the Supreme Court ruling stems from, including “even more control” over how drivers earn their money, and “providing new protections like free insurance in case of sickness or injury”.
A message from Uber’s northern and eastern Europe head Jamie Heywood was sent out to drivers following the judgment claiming it “does not apply to drivers who earn on the app today”.
Yet the judgment’s scope is much broader. “I can’t see that they’ve changed very much at all,” says Nigel Mackay, an employment lawyer at Leigh Day, which represents thousands of Uber drivers. “It’s misleading to say things have changed so much that this judgment won’t apply to drivers now, because none of the changes I can see would have a significant impact on the findings.”
Indeed, there is an acceptance even within Uber that the case has implications for future claims, and a great deal depends on its longer-term response.
“We will respect the verdict,” a spokesperson told the New Statesman. “We are now listening to all active drivers to help us shape the future of flexible work, having launched a nationwide consultation with them following the verdict. We will share the conclusions of this process in the coming weeks.”
A survey was sent out to drivers to ask about how they prefer to work, and an Uber source told the New Statesman that Heywood has been holding video roundtables with drivers to hear what changes they want to see. Ten thousand drivers have filled in the survey, and around 100 will participate in the roundtables.
A document Uber filed in the US two years ago referred to this specific court case when warning that classifying drivers as workers would “incur significant additional expenses for compensating drivers… any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition”.
What can Uber drivers claim in compensation?
A week on from the ruling, the New Statesman understands that 14,233 drivers so far are filing claims for compensation from Uber. Using data from thousands of clients, Leigh Day estimates that they could each be eligible for up to £12,000. There are over 60,000 Uber drivers in the UK.
This means 24 per cent of the UK’s Uber driver workforce are already challenging the company, which could be facing a payout of £170.8m.
“Workers who have driven for Uber since 2015 are likely to be entitled to backdated minimum wages and holiday pay,” says Andrew Nugent Smith, managing director of Keller Lenkner UK – another law firm also representing thousands of Uber drivers.
James Farrar, a lead claimant who worked as an Uber driver for two years in London, first contacted a lawyer six years ago about his contract. He went on to tell an employment tribunal in 2016 that he had calculated that in August 2015 he had earned just £5.03 an hour – far less than the minimum wage – working for Uber (Uber disputed this, but lost the tribunal).
Farrar warns that Uber is already facing “a tsunami of litigation” from drivers like him. “Drivers have to take things into their own hands and join the litigation, and thousands are. This is going to put insurmountable pressure onto Uber.”
The case will now return to the employment tribunal where it began in 2016, this time with Uber’s defence having been overruled by the highest court in the land.
“Joining the action against Uber is free and the process is straightforward,” says Nugent Smith, whose firm has a sign-up page for Uber drivers who want to claim. “We will be filing further claims on an ongoing basis to ensure that all workers are fairly compensated.”
His firm has already filed claims on behalf of 8,000 Uber drivers, and has since been contacted by a further 1,000 to join the action.
Leigh Day has 3,233 clients with around 2,000 potential clients waiting to be processed. It is also inviting online sign-ups.
“They’ve decided Uber drivers are workers, so the next question is what they’re entitled to as a result of that finding,” says Mackay. “We’re looking backwards at what compensation you’re entitled to for Uber’s failure to provide paid holiday, and its failure to pay minimum wage.”
As for Uber, it will “have to deal with what it does going forward, because if it doesn’t rectify the situation then drivers will just have ongoing claims until it does”.
Is the gig up?
The implications of this case go far beyond Uber itself. The Supreme Court judgment sent “shockwaves” throughout the gig economy, according to Alex Marshall, who was a pushbike courier in central London for eight years and now heads the Independent Workers’ Union of Great Britain.
A veteran of fighting for gig workers’ rights, Marshall won what is thought to be the first ever trade union recognition of UK gig economy workers in 2019 – on behalf of medical supply couriers for an NHS contractor called The Doctors Laboratory.
Since the Uber ruling, he has noticed private hire drivers in his union “mobilising” to ensure Uber is held accountable. “We’re seeing a lot more empowered workers up for stepping up – not only launching backdated claims but looking to campaign.”
Nearly five million people work in Britain’s gig economy, which has doubled in size over three years, according to 2019 figures from the Trades Union Congress. The wider gig economy workforce, such as couriers for apps similar to Uber, has been given “a new lease of life” by the ruling, says Marshall.
“The likes of Uber and Deliveroo – they’re what you think of when someone mentions the gig economy, and the fact this is such a big scalp has shown people that no matter how big you are, no matter how many thousands you spend on intricate contracts and inventing words for workers, the judges have seen straight through it,” he says.
This case is also likely to embolden future tribunals to rule in workers’ favour, says employment lawyer Nigel Mackay. He believes “gig economy-type arrangements”, where the company claims it is “just a platform” connecting customers with contractors, will be in most trouble.
“If they want to do that, then they’re on the hook for ensuring that the workers receive the rights they’re entitled to.”
Now it has to change, Uber wants the rest of the industry to follow suit. An Uber source emphasised “the need for a level-playing field across the ride-hailing sector”, ensuring all drivers – who can use multiple apps at once – receive the same benefits no matter which one they’re using.
When will the government step in?
For the industry to change, however, the government must enforce the law.
“Drivers are still driving around, feeling exploited, like ‘this is just another day’,” says Marshall. “It’s been ruled in the court, it’s bizarre that there’s this vacuum where there should be enforcement. The government should be looking after low-paid workers, not giving multimillion-pound companies breathing space.”
Although the government would not comment specifically on the Uber case, a spokesperson said, “We have always been absolutely clear that employers must take their employment responsibilities seriously and cannot simply opt out of them.” They highlighted legislative progress on measures that “add flexibility for workers while ensuring the protection of employment rights”. These include banning exclusivity clauses in zero-hours contracts.
“We will continue to consider options to improve clarity around employment status,” they added.
However, the public position of director of labour market enforcement has been vacant since the end of January. The Department for Business, Energy and Industrial Strategy declined to tell the New Statesman when the role would be filled.
Drivers in the capital are waiting for further action, as the judgment found Uber London may also be breaching private hire regulations.
“We are considering the Supreme Court’s judgment and any impacts on the provision of transport services in London,” said a Transport for London spokesperson.
“I welcome this ruling,” said the mayor of London Sadiq Khan. “I urge businesses in the capital, including private hire companies, to pay their workers the London Living Wage, and to give them the security they deserve.”
And yet it took six years for James Farrar and his fellow drivers to prove they were owed the minimum wage.
“That alone tells you this can’t be the way that we police minimum wage compliance in this country, because what we did was exceptional – it’s not a realistic solution for most people,” he says.
As for his own claim, he has little idea of how much he is owed.
“I haven’t a clue, I’ve never measured it!” he laughs. “One thing I’m pretty sure of is it won’t make up for the hours we’ve had to put into fighting the case. It’s an absurdity, isn’t it, that we would spend six years and millions of pounds of lawyers’ fees to earn minimum wage?”