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The dispute over whether Uber/Lyft drivers are employees is worldwide in scope. Specifically, the UK’s Supreme Court has held that Uber drivers must be treated as workers rather than as self-employed independent contractors. This decision could mean thousands of Uber drivers are entitled to minimum wage and holiday pay. The decision is also expected to have wider consequences for Britain’s gig economy.

The ruling from UK’s Supreme Court represented the last of Uber’s three appeals on this issue. The Court soundly rejected Uber’s contention that it was an intermediary party and merely matched willing passengers with willing drivers. The Court considered several elements in rejecting Uber’s arguments:

  • Uber set the fare which meant that they dictated how much drivers could earn
  • Uber set the contract terms and drivers had no say in them
  • Request for rides is constrained by Uber who can penalize drivers if they reject too many rides
  • Uber monitors a driver’s service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve

It is clear that the element of “control” was key to the Court’s ruling.

While this decision has no impact on Uber’s business model in California, it is important to note that the element of “control” remains the key factor in making the distinction between employees and independent contractors.

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