Search

How can we help?

Icon

Uber judgement set to shift the gig economy for delivery companies

Gig economy delivery companies: after the Uber case, reputational risk and investor concerns  may be more of a brake on Deliveroo than formal findings on worker rights. 

Uber’s announcement about how it will pay its drivers following the Supreme Court decision last month has produced a lot of heated discussion about its impact on the wider gig economy.

On one level, Uber’s decision simply shows they are going to follow the law. Uber drivers are workers and workers are entitled to receive at least the minimum wage, holiday pay, statutory sick pay and workplace pensions. While technically the Supreme Court decision only applied to the drivers in the 2016 employment tribunal claim, no doubt many other drivers had subsequently brought claims which were put on hold pending the ultimate outcome of that case. It would have been futile for Uber to continue to insist that these drivers were self-employed contractors.

However, while the Supreme Court found that the time drivers spent logged into the app and available to work was also working time, this waiting time was excluded from Uber’s announcement. This is because the terms on which drivers are offered work by Uber changed following the 2016 tribunal decision. Since then, Uber has stopped banning drivers from being logged into rival apps or ‘sinbinning’ drivers by logging them out of the app for a period of time if they reject rides offered to them.

It would probably be an uphill struggle to persuade a tribunal that waiting time under the current terms counts as working time for pay purposes. Nonetheless, there is another avenue that the Supreme Court decision opens to Uber drivers. As they are workers, they are entitled to unionise, and Uber can expect that the unions will use the waiting time issue to try to recruit drivers. If the union recruited a high enough percentage of the workforce, it could lead to union-led pay negotiations and/or industrial action. 

The Uber decision does not generalise to all gig economy companies. Deliveroo riders in particular have been found not to be workers because they are not, in the written contract or in practice, required to make deliveries personallyHowever, this finding was challenged in the Court of Appeal last month and the Judgment is anticipated in the coming weeks. It would be a remarkable turnaround if the Court of Appeal were to overturn the High Court decision, particularly in the light of decision of the European Court of Justice in the Yodel case last year.

Nonetheless, the Uber case is part of a shift in attitudes to what constitutes acceptable business conduct, from accepting people working in the gig economy are self-employed to expecting them to have at least worker rights. Most importantly, the shift has reached institutional investors, and this is impacting Deliveroo ahead of its listing next week, which is expected to be the UK’s largest IPO of the last 10 years

This week Legal and General Investment Management, Aberdeen Standard Investments and Aviva Investors, which together manage £2.2 trillion in assets, have expressed concern that Deliveroo’s treatment of its riders doesn’t align with socially responsible investing practices. Aviva cited concerns relating to social responsibilities and the effect on the valuation of the business if a change in the law meant the riders were reclassified as workers. Deliveroo will need to find a way to address these concerns irrespective of any court finding and this may involve further changes to its business model.

Caroline Lendrum

Associate

View profile

+44 118 960 4669

The Uber case is part of a shift in attitudes to what constitutes acceptable business conduct, from accepting people working in the gig economy are self-employed to expecting them to have at least worker rights

For advice on employment status, union relations and business reputation, please contact our employment lawyers.

About this article

Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Caroline Lendrum

Associate

View profile

+44 118 960 4669

About this article

Read, listen and watch our latest insights

art
  • 10 October 2024
  • Employment

Employment Rights Bill – the biggest changes for a generation

Today, 10 October 2024, the Government has unveiled their long-awaited Employment Rights Bill, fulfilling their election manifesto pledge to introduce major reform to workers’ rights within 100 days of government.

art
  • 10 October 2024
  • Employment

Prioritise mental health in the workplace – FAQs

Today is World Mental Health Day, and the focus this year is mental health at work.

art
  • 08 October 2024
  • Immigration

The Immigration Rules updates – October 2024

The Home Office has issued a statement of changes to the Immigration Rules, impacting UK immigration applications. Published on 10 September 2024, these changes take effect as of yesterday, 08 October 2024, with some set to be implemented in early 2025.

art
  • 08 October 2024
  • Employment

Hidden Disabilities in the Workplace: Chronic Pain

In this article we will consider guidance on how hidden disabilities can be managed in the workplace and what employers should consider specifically for employees suffering from chronic pain.

Pub
  • 08 October 2024
  • Public Procurement

Procurement Challenges under the Procurement Act 2023

Taking prompt advice is essential as unsuccessful bidders have just ten days within which to issue court proceedings if they want to benefit from the automatic suspension provided for in the Regulations, which prevents the contracting authority from awarding the contract to anyone else.

art
  • 03 October 2024

Clarkslegal receives outstanding results in Legal 500 guide

Clarkslegal thanks clients for exceptional feedback in its 2025 Legal 500 rankings. Clarkslegal is proud that Legal 500 has recognised the firm in the following areas: Construction, Litigation, Property, Corporate, Employment & Immigration.