Several blue states here in America, including California and New York, have been engaged in a war against Uber, Lyft and the rest of the gig economy for a few years now. Across the pond in the UK, the same thing has been happening, but the government there has been far more effective. Using the same strategy and tactics that California has been trying to apply, the Brits have seemingly put the last nail in Uber’s coffin. The U.K. Supreme Court ruled today that drivers must be regarded as employees instead of private contractors and are entitled to all the normal benefits that hourly or salaried employees receive. This decision effectively breaks Uber’s business model, so the company will most likely shrink vastly if they don’t disappear from the British market entirely. (Associated Press)
Uber drivers in Britain should be classed as “workers” and not self-employed, the U.K. Supreme Court ruled Friday, in a decision that threatens its business model and holds broader implications for the so-called gig economy.
The ruling entitles Uber drivers to benefits such as paid holidays and the minimum wage, handing defeat to the ride-hailing giant in the culmination of a long-running legal battle.
The Supreme Court’s seven judges unanimously rejected Uber’s appeal against a lower court ruling, which had found that two Uber drivers were “workers” under British law.
Uber is out of appeals, so that’s probably the end of things. Much as we’ve seen in California and New York City, Uber will probably drop all but a handful of drivers who typically work full time off of the app. They can’t turn a profit while paying drivers who only drive in their spare time all of the pay and benefits being demanded.
So the upshot of this is fairly simple. The press is celebrating this as a “victory” for the drivers and their rights as employees. But most of them will lose that income stream now, thanks to the “help” being delivered by the British government and the courts.
Of course, that was the intent behind this campaign from the beginning, despite how it was being advertised. England’s famous Black Cab industry didn’t want rideshare companies competing with them and they managed to get plenty of powerful politicians on their side. It’s the same situation we’ve seen with the American taxi companies and their unions on this side of the pond. When the attack on Uber in New York City’s courts was successful, the company immediately cut back on the number of drivers allowed to use the app. This reduced competition for the traditional cab companies, even though they provide poorer service and frequently more expensive rates.
This is a sad development for all of the Brits (there are estimated to be 45,000 just in London alone) who were supplementing their income by driving for the various gig economy companies. It’s also bad news for all of the riders who had become accustomed to summoning a car with a few taps on their phone and being able to track the arrival of their driver. But at this point, it appears that everyone is out of options.