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Uber defends business model in UK court battle over workers' rights

Credit: REUTERS/Hannah McKay

Uber was defending its business model on Tuesday at Britain's Supreme Court in a battle over rights in the workplace that could have ramifications for millions of Britons earning a living in the gig economy.

By Costas Pitas

LONDON, July 21 (Reuters) - Uber UBER.Nwas defending its business model on Tuesday at Britain's Supreme Court in a battle over rights in the workplace that could have ramifications for millions of Britons earning a living in the gig economy.

In a case brought by two drivers, a London employment tribunal ruled in 2016 that they were entitled to workers' rights such as the minimum wage, paid holidays and rest breaks.

As things stand, Uber drivers are treated as self-employed, meaning they are legally entitled only to minimal protections.

Whilst the drivers point to a contractual relationship with the firm, Uber says there is a looser set-up.

"Drivers were under no obligation to use the app at any time, or to accept trips offered to them; Uber did not pay them for any services and the drivers incurred all necessary expenses," the company said in a legal document.

The Silicon Valley-based firm has lost two appeals in the case, prompting it to seek a hearing at the Supreme Court which is considering the matter on Tuesday and Wednesday.

A judgement is not expected until at least October. If Uber loses, the firm is highly unlikely to be able to appeal and a further tribunal hearing may be needed to decide how the ruling is applied in practice.

Other firms in the gig economy use a similar business model, where people work for one or more companies without fixed contracts.

Uber faces similar cases elsewhere with Canada’s top court in June finding in favour of a driver in a case that paves the way for a class action suit calling for the company to recognize drivers there as employees.

Separately, in London, the company is trying to win back its licence after the city's transport regulator stripped it of its right to operate in November for the second time in just over two years. Its appeal will be heard in September.

(Editing by Estelle Shirbon and Stephen Addison)

((Costas.Pitas@thomsonreuters.com; 02075428024; Reuters Messaging: costas.pitas.thomsonreuters@reuters.net and @Cpitas on Twitter))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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