Uber Vs. London – The Courtroom Battle The World Is Watching

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David Dawkins   Forbes U.S. Staff

Uber

Uber, the mobile ride-hailing giant responsible globally for over 1.9 billion “trips” a year is facing a summer showdown in two London courts as scrutiny mounts over licensing issues and the drivers’ classification as “workers.” Both cases have huge ramifications for Uber and could set a precedent for so-called “gig economy” workers around the world.

With decisions expected in September, the two Uber drivers at the heart of the 5-year long battle for representation and basic rights have told Forbes that Uber’s ride-hailing system is a danger to its exhausted drivers, and global change is desperately needed. The former drivers claim that forcing Uber to accept drivers as workers will help rid Uber of its “sweatshop labor” culture, and reset the dehumanising “entitlement” differential between riders and drivers. London’s Supreme court has now broken to consider its decision.

Uber now faces making significant changes to its business model in the U.K. If the court rules against Uber, they will be expected to pay minimum wage and grant holiday time to drivers. However, that sum is likely to pale in comparison to the 20% VAT and 13.2% national insurance contributions Uber will have to pay to the British taxman if the court does agree that Uber is a “transportation provider.” The Good Law project has estimated from 2017 earnings that the figure for Uber’s VAT in the U.K. could be in “excess” of $1.3 billion per year.

The Story So Far

Last week London’s Supreme Court began hearing Uber BV v Aslam, a case that could rumble on for the duration of summer and could potentially transform Uber from tech giant to the world’s largest taxi firm – a global employer of drivers and not merely an app that connects passenger, driver, destination and payment.

Uber is attempting, for the third and final time after two rejected appeals, to overturn an Employment Tribunal decision from July 2016 where claimants Yaseen Aslam and James Farrar successfully argued that Uber drivers are workers whenever Uber’s app is switched on and they are ready and able to take trips. The Tribunal ruled that as workers Uber drivers should be paid the U.K.’s national minimum wage and receive paid holiday while on the clock. Uber argued, in claims now synonymous with the “gig” economy, that the drivers using the app are self-employed independent contractors, while they – Uber – are an agent, merely providing the technology to connect drivers with passengers and process their payments.

The Supreme Court ruling pitches a global tech super-power with a $50 billion plus market cap, against the very drivers that made Uber such a phenomenal offering. If London’s Supreme Court upholds the employment tribunal’s ruling, Uber will be forced to recognise drivers as much more than merely contractors and will be entitled to basic worker benefits and the minimum wage. With ongoing legal proceedings in the Supreme Court of Canada and with an incoming lawsuit from California’s attorney general filed in May – all eyes are on London to potentially set a global precedent.

The Second Front

Uber’s second London problem is regulatory and pits the Labour mayor’s City Hall against Boris Johnson’s Conservatives – the mayor is unhappy with Uber, while ties between Uber and members of the Tory party have strengthened in the years since the regulatory problems over the onboarding of new drivers emerged. 

In 2018, a witness statement document pointed to Uber’s strategy of “principled confrontation” – famously described in 2014 by former chief executive Travis Kalanick as, “the thing we do that ... can rub some people the wrong way." 

In 2019, Uber very much rubbed London’s Mayor Sadiq Khan the wrong way, so much so that London’s transport authority removed the company’s licence to operate. As the case moves towards Westminster Magistrates Court this September, the Labour mayor remains unhappy with Uber after authorities revealed in November 2019 that more than 14,000 trips were taken by 43 drivers who had faked their identity on the Uber app. As reported by the Guardian last November, one of the fraudulent drivers found by authorities to be using the Uber app had already been cautioned for distributing indecent images of children.

Mayor Khan had told Uber to make significant changes – “principled confrontation” or not, it wasn’t a good look. 

Uber publicly opposed the TfL’s decision, and in November 2019 Uber CEO Dara Khosrowshahi tweeted: “We understand we’re held to a high bar, as we should be. But this TfL decision is just wrong. Over the last 2 years we have fundamentally changed how we operate in London. We have come very far — and we will keep going, for the millions of drivers and riders who rely on us.”

The U.K. capital could end its love affair with the ride-hailing app if Westminster Magistrates Court, in mid September, cannot find a good enough reason to reverse the decision to deny Uber a new private hire operator's licence from November 2019. The removal of the licence by Transport for London (TfL) marks the midpoint of the bizarre dance between the Mayor's office and Uber that started in around 2014 and resulted in the identification of “a pattern of failures by the company including several breaches that placed passengers and their safety at risk.”

Approaching the mid-September date for the Magistrates court showdown, Uber does not accept TfL's conclusion that it was not a "fit and proper person," but does admit that in 2014 during the conversations with TfL about its licensing Uber, “provided inaccurate and inconsistent information to TfL as to the process by which bookings are accepted through the App." Uber’s top man in the U.K & Ireland Tom Elvidge (now at WeWork) described Uber’s letters to TfL as “unclear, inconsistent and, on occasion, simply wrong."

Today Jamie Heywood, Uber’s regional general manager for northern and eastern Europe, replied to Forbes with a statement confirming their appeal, “We have fundamentally changed our business over the last two years and are setting the standard on safety. On behalf of the 3.5 million riders and 45,000 licensed drivers who depend on Uber in London, we will do everything we can to work with TfL to resolve this situation.”

On the Supreme Court action Heywood said, “The vast majority of drivers want to work independently, and over a number of years we’ve made significant changes to our app to offer more benefits with total flexibility. Drivers can determine if, when and where they drive, but can also access free AXA insurance to cover sickness or injury, as well as maternity and paternity payments.” 

Former Uber drivers James Farrar (L) and Yaseen Aslam. Photo: Yaseen Aslam Twitter

The Unlikely Activists 

But in this journey through the London courts the unlikely activists behind the complaint want to remind us all of the person behind the wheel.

Yaseen Aslam, a former minicab driver, has found himself at the global epicentre in the battle for workers’ rights, representation and voice in the so-called gig economy. Talking to Aslam today, his plight is to make the invisible, visible and give the drivers who have literally driven Uber to a billion dollar valuation a place and a voice in the firm’s story and its continued success.

Aslam talks of “isolated” drivers, working bizarre hours constantly on and off the clock though night, day and night again. He warns, “People don't care, [they don't ask] is this sweatshop labor?” he says.

Although Uber did not offer comment on this specific allegation, a spokesperson pointed to a study in the U.K. from Oxford University that states, “Our estimates suggest that the median Uber driver in London earns about £11 per hour spent logged into the app, after deducting Uber’s service fee and drivers’ expenses.”

Aslam warns, “Think of a driver working 70 hours a week,” adding, “The average Uber driver in London had to work 35 hours just to offset his expense. That means after 35 hours he starts making money.” The need for jobs creates unnatural working habits, “I slept in the airport at Heathrow. So many drivers when they're tired just go to the airport to sleep in their cars then get up for the next job three hours later. That is not a quality of life ... people don't see that. All people see is a driver who picks them up and drops them off.” Like so many of his invisible colleagues around the world, Aslam drove a Toyota Prius.

Aslam met colleague James Farrar, on Twitter after Farrar had begun sharing his experience as an Uber driver. Farrar’s opposition to Uber began after he was allegedly assaulted by a “coke fueled” rider travelling to a “media party” in Shoreditch 2015, and was appalled at just how flat-footed Uber was in passing on the information that would help the police with their active inquiry. 

Farrar claims the attack came from a deeper cultural divide between driver and passenger created by Uber and most prevalent in London’s richest, most entitled postcodes. Farrar describes being made to feel ignored and subhuman by Uber users, and tells Forbes that he would regularly turn off the app in areas like upper-crust South Kensington. Farrar claims that his assault, as confirmed by a letter seen by Forbes from the police (although no charges were filed), came as part of a culture created by Uber to empower the rider and diminish the driver. “Uber trains them to be that way,” he tells Forbes, adding that allowing passengers to take ownership of the car, turn up the music through aux cables and “integrated Spotify”, and the power of the “five star ratings”, he adds, “you're giving a huge amount of entitlement over to a consumer, over [the] driver. And it does lead to some dark places.”

Uber did not offer comment on this specific allegation.

The story of how two ordinary Uber drivers with no legal experience, no historic trade union pedigree, no connections to power or money and no real leverage placed the global spotlight on a tech superpower is a classic tale of the meek and the mighty. For father of three Yaseen Aslam, who drove mini-cabs and Ubers from his home in High Wycombe, about an hour out from London, life will never be the same again.

Aslam’s dialogue with Uber, which started in 2013, has taken different names and occasionally fallen under larger U.K. unions like GMB Union and IWGB. Today he runs App Driver & Couriers Union and is once again independent and free to work for those delivering food, parcels and people. 

“We're not fighting for employee status, we're fighting for worker status which is a middle category between self-employed and employees,” Aslam tells Forbes. The union is fighting for three basic changes to how Uber treats and pays its drivers, “Minimum pay per hour after expense, holiday pay and trade union recognition ... meaning you're protected from discrimination.”

Aslam argues that Uber should not have drawn this out into a five-year struggle. Arguing that if drivers are indeed earning above the minimum wage, then there’s nothing for them to pay. He believes Uber should have honored the 2016 Employment Tribunal ruling and not pushed it through two appeals, and finally to the Supreme Court. “I've not seen a reason why Uber cannot accept the ruling... and there's no reason why the government can't enforce these laws – if people are already making [minimum wage] there should be nothing to change. But if people are making below the minimum wage then it is a concern – why are people being exploited when these laws are here to protect them?”

Uber is certainly concerned about the case, detailing the consequences and risk in its 2019 Securities & Exchange Commission registration documents. However the financial cost of paying minimum wage comes second to Uber’s primary concern. “Losing the case may lead the U.K. tax regulator (HMRC) to classify us as a transportation provider, requiring us to pay VAT (20%) on Gross Bookings both retroactively and prospectively,” the documents states.

“It may also determine us to be an employer for tax purposes, resulting in 13.2% national insurance contributions being payable by us on driver income.”

If a decision in a London court nudges the world towards embracing Uber as a “transportation provider,” the very gig-economy that has underpinned so very many billion dollar valuations in recent years could be forced to adapt. By the end of the summer we’re very likely to know if Uber’s era of “principled confrontation” has delivered results.

 

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David Dawkins   Forbes U.S. Staff

I am a wealth reporter at Forbes, based in London covering the business of billionaires, philanthropy, investing, tax, technology and lifestyle. I studied at Goldsmiths, University of London and joined from Spear's Magazine, where I covered everything from the Westminster bubble to world of wealth management, private banking, divorce law, alternative assets, tax, tech and succession. Notable bylines include an investigation into Switzerland's bi-lateral bonds to the European Union, and a journey through Bhutan - testing the hunger for democracy, and the love for their King. I joined Forbes in May 2019.