• Suzanne McMinn
  • 15 November 2016

Uber and Deliveroo – an end to the ‘gig’ economy?

As reported last week, a ground breaking decision has been made in a London Tribunal, which has ruled that drivers working for the online Uber app are workers rather than self-employed individuals, as Uber maintained prior to the Tribunal outcome. Since the verdict, it has emerged that couriers working for Deliveroo have sought to unionise and claim employment rights. Is this the end of the so-called ‘gig economy’?

In the Uber case, two drivers, James Farrar and Yaseen Aslam, argued that their actions were controlled by Uber, which meant they were employed by the firm - but that they did not have basic workers' rights such as minimum wage or holiday entitlement.

The ruling accused Uber of "resorting in its documentation to fictions, twisted language and even brand new terminology", adding "The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform' is to our mind faintly ridiculous."

Suzanne McMinn

The ruling has been met with mixed views, with many Uber drivers left astounded and unhappy with the verdict and the new employment status that this provides them with.

As a self-employed entity, before the Tribunal outcome, drivers using Uber were entitled to work when it suited them and were responsible only for providing the company with driving services which Uber then used to provide a new ‘taxi service’ via a groundbreaking and very successful app.

Uber has been hugely successful, launching their app in 2011 which enables customers and drivers to be matched quickly for taxi services.

The ruling now sees Uber looking at the additional costs of workers’ rights, which include provision of the National Minimum Wage, paid holiday entitlement and sick pay.  Uber are set to appeal the outcome of the Tribunal and state that they have not acted unlawfully in their actions.

Deliveroo, which provides a delivery service on behalf of thousands of restaurants across the country, classes its riders as self-employed ‘independent contractors’. Like Uber, the riders have no workers' rights such as paid holiday or the right to the minimum wage.

Billy Shannon, a rider who works for Deliveroo in Camden, north London, told the BBC that riders receive £3.75 per delivery.

He added:

"We don't get an hourly fee, so that means at times when there aren't that many deliveries and it is not that busy, we can be waiting for up to an hour for a delivery without getting paid a penny."

The GMB has stated that the Uber ruling is a ground breaking outcome which sets a clear marker for other companies who are using self-employed people as part of their service provisions.  Does this mean that we should all be looking at how we employ people?  Well essentially yes, we should always ensure that we are clear on how people work within our business, be it employee, worker or self-employed.  But the Tribunal outcome doesn’t mean that all companies will be at risk; Tribunals will consider each case on its own merits and look at a variety of different tests to assess someone’s employment status.