(Original edit of article for Taxi magazine).
Meet the New Boss
I was surprised by the recent Employment Tribunal ruling that Uber drivers aren’t self-employed mini-cab drivers, but employees of a foreign tech company.
As expected, Uber have vowed to appeal, so the champagne is still on hold; but if the judgment stands, it’s a welcome announcement for us as their business model goes out the window and it puts the Uber organisation in disarray. Uber’s “Partners” will become employees and will start to enjoy rights that they’ve hitherto only dreamt about. As far as I understand it, these new employees will now be entitled to a minimum wage, and Uber will have to sort out income tax and national insurance for their new employees. They’ll have to pay holiday and sick pay, maternity and paternity leave, pensions, and all the other benefits that employees enjoy under law. This will cost Uber a lot of time, effort, and money.
The Uber drivers who brought the case should’ve have been more careful for what they wished for. Being an employee gives you a degree of security, but it comes at a price. When we start driving a taxi as a self-employed trader we need to put money away for our six-monthly tax bill. We don’t pay a lot of tax because our running costs are offset against our earnings. We pay little National Insurance. We should put money away for holidays, sick days, and a pension, but it’s optional: if we have a lean Kipper Season we can defer it. No chance of doing that when your wages are deducted automatically. Our main concern is keeping the cab on the road. Hopefully, we make a profit, and all our other expenses are taken care of. When I became employed as a Knowledge Examiner I was shocked at how much I was deducted: several hundred pounds of tax and National Insurance every month! It was nice to be in a pension scheme, but that was another £100-plus every month. Every job that Uber drivers do will be logged and deductions will be made accordingly. They might reflect that they were better off when they were self-employed. There isn’t really any extra security being an employee, as an employee can be dismissed within two years and with no reason given. I’d suggest that only a minority of Uber drivers stay longer than two years anyway. Employees will be entitled to a minimum wage, but this won’t be enough to live on. If not enough work is offered and accepted, drivers will be in a sticky situation. Particularly if you are renting a car or buying one on finance. As far as I know, you can’t claim vehicle costs unless you are self-employed.
Going further, if Uber drivers become employees, could their bosses force them to sign contracts stipulating hours of work? Will some drivers be on the nine-to-five with an hour for lunch, while others are on unsociable hours, including weekends and bank holidays? Some drivers could be allocated too few hours, some too many. Taking time off might not be so easy – maybe the boss will need to consult the rota first. They’ll probably have to work a month before seeing their first pay packet. The main benefit of being a private hire driver is the flexibility of being your own boss, but that flexibility has now been signed away. Think how we’d take to having a boss to answer to, and being told when to work.
Uber will now be responsible for their drivers’ conduct. When drivers are complained about it won’t be enough to disassociate themselves with the claim that Uber are a tech company and have nothing to do with the person driving the car brokered through their App.
Fares are sure to rise, making Uber less attractive. At the same time, word is getting around that all London taxis now accept contactless credit cards, and that many of us are also bookable through apps and radio circuits – as many of us have been for years.
Things are getting tough for Uber. They cleverly found a loophole in centuries-old legislation and caught our licensing body napping. They were initially seen as progressive, and feted by celebrities who wanted to align themselves with something new and exciting. They were seen as the People’s Cab, but bad publicity has caught up with them. People are now asking whether their aggressive way of doing things is something they should endorse. They’re suffering attacks from both left and right wing groups, and they’re fighting a war on too many fronts.
Driver morale is low, and I believe it will get lower still. A report by the United Private Hire Drivers speaks of exploitation, with drivers working 90 hours a week just to make ends meet. The group say things won’t get better while TfL continue to flood London with licences: 111,000 and rising. It’ll be interesting to see what happens when Uber’s licence is up for renewal next year. They see London as a honey pot, but their feet are getting stuck right now. That’s sweet.