Appy and you know it? Employment status in the gig economy

By Alex Brooks & Catriona Boyd

Less than a fortnight after an Employment Tribunal handed down a strongly-worded preliminary judgment in the widely-reported case of Aslam and Others v Uber B.V. and Others [2202550/2015], fellow ‘gig economy’ operator Deliveroo is the subject of fresh calls for greater employment rights for those carrying out its public-facing services, the delivery drivers and riders themselves.

In common with app-driven taxi firm Uber B.V. (Uber), Deliveroo classes its riders and drivers as self-employed independent contractors that simply have access to the company’s digital platform, rather than being workers or even employees of the company itself. There are myriad reasons for this being an important and complicated distinction, including the fact that “workers” and “employees” enjoy the benefits of various statutory rights that do not apply to self-employed contractors, including entitlements to paid holiday, the national minimum wage and the right to unionisation and collective bargaining. On the other side of the argument, a significant number of drivers and riders refer to the flexibility and possible tax benefits associated with being self-employed. Irrespective of which side of the fence an individual may prefer to fall on, what seems clear is that the Uber case is likely to be only the beginning of a protracted and complicated battle regarding employment status in the growing industry of ‘gig economy’ providers.

The Uber case

The Uber drivers concerned have brought claims against Uber in the Employment Tribunal on the grounds that they should properly be considered “workers” for the purposes of the Employment Rights Act 1996 section 230(3)(b) and, accordingly, they have been denied the national minimum wage, as well as rights under the provisions of the Working Time Directive 1998. Uber’s position is that their drivers are self-employed contractors and are, therefore, not statutorily entitled to these rights. It is worth noting at the outset that the Claimant drivers in the Uber case do not necessarily represent the will of all, or even a majority of Uber drivers in London and beyond, many of whom would prefer for various reasons to be legally recognised as being self-employed.

The Tribunal was unimpressed by Uber’s attempts to characterise its business as being solely a provider of technology, rather than itself being a party to the contract between a driver and a passenger. The Tribunal’s view was that Uber’s business is to supply transportation services, rather than merely being a technology company. The judgment points to a number of reasons for this, including that the range of products marketed by Uber (for example the availability of higher-end options “UberLux” and “Uber XL”) cannot be said to benefit any individual driver but, rather, Uber itself.

The Tribunal was also swayed by the amount of control that Uber appears to exercise over the drivers. Uber controls significant elements of drivers’ roles, including: the recruitment and interviewing process for drivers; key information (such as the passenger details and intended destination); default routes (departures from which must be justified by a driver); choice of approved vehicles; rating systems (which effectively act as a performance management process); the complaints process (sometimes without any consultation with the driver) and the rights to amend drivers’ terms unilaterally. The Tribunal was also influenced by the fact that Uber effectively disciplines drivers by forcing a driver to log off from the app system if they cancel or do not accept sufficient trip requests.

Ultimately, the Tribunal found that the written terms used by Uber to engage their drivers do not match the reality of that working relationship, calling it “faintly ridiculous” for Uber to suggest that each driver constitutes a separate business. Overall, the Tribunal were unpersuaded by the arguments put forward by Uber and looked more to the facts of the situation rather than the documentation that Uber sought to rely upon, which was considered to be misleading.

Looking ahead

Whilst the judgment may be welcomed by many of the 40,000 Uber drivers in the UK who could now benefit from being given the green light to claim the statutory rights owed to ‘workers’, the fact-based approach taken by the Tribunal should warn all employers of the dangers of having written agreements that do not accurately reflect the realities of the working systems that they have in place. It is expected that Uber will appeal the Tribunal’s decision; however, it is difficult to see any appeal being successful when one considers the facts in the case.

‘Gig economy’ providers, such as Deliveroo and other couriers, are firmly in the employment rights spotlight currently and the Uber decision has plainly given credence and confidence to those seeking to challenge the status quo in what is a booming industry. Accordingly, such providers would be wise to make a timely review of their contractual arrangements, to ensure that these truly represent the relationship between the parties involved, in order to minimise litigation risks.

For any further advice on the status of your workforce or your contractual arrangements, please contact Nick Humphreys or Alex Brooks of the employment team at Thomas Cooper LLP.

This article is filed under:  Industry news, Publications

About the contributors

  • Nick Humphreys Partner

    Nick has acted for numerous multi-national, publically listed corporations as well as public and third sector clients. His clients include travel sector clients, industrial conglomerates, hotels, media organisations, marine businesses and charities

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  • Alex Brooks Solicitor

    Alex advises on the full range of contentious and non-contentious employment law and HR issues and acts for both employers and individuals on employment tribunal claims involving unfair dismissal, discrimination, breach of contract and whistleblowing

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