The UK High Court declares the Uber business model illegal

In a ruling today, the High Court Administrative Court rejected Uber’s request to declare its controversial gig economy business model legal.

Uber sought a declaration from The High Court that Uber’s drivers can continue to contract directly for Uber’s transport services, in spite of the Supreme Court worker rights ruling.

Uber claimed that Uber’s role was limited to being an internet booking agent and that it wasn’t a party in any transport contract.

After the Supreme Court’s worker rights ruling earlier in the year, the court ruled that it might be illegal for Uber to operate its business model under the transport law in London as regulated by Transport for London.

The High Court clarified the matter, declaring that Uber operators who accept bookings must “enter (as principal) into contractual obligations with passengers to provide the trip in respect of that booking.”

This ruling could fundamentally reform the London private hire market as nearly all 1,832 TfL licensed providers have used this model since 2002, when the industry was first under regulatory supervision.

Frank Field, former Chair of the Work & Pensions Select committee, wrote a report called Sweated Labour Uber & the Gig Economy in 2017. It described the difficult conditions that were tolerated by a trade supervised TfL.

Private hire drivers will be able to access worker rights easier as passengers can only contract with operators, and drivers are indisputable working for the operator.

It will restrict companies’ ability to misclassify employees as independent contractors. This has been used in the past to protect operators from employer liability, legal responsibility to their customers, and payment of VAT.

Yaseen Aslam (ADCU President, claimant in Aslam V Uber) stated: “For years the Mayor and Transport for London said they did not have any powers to protect TfL drivers from being brutally exploited by licensed operators such as Uber.”

“This ruling confirms that they not only had the power but also had the obligation to act on those powers, but did not. To find out the causes of this failure, the Mayor of London must immediately order a review of TfL. This will allow TfL to quickly comply with regulations and ensure that passengers and drivers are not again at risk.

James Farrar (ADCU General Secretary) added: This was a failed collateral attack against the Supreme Court ruling Uber made. Uber sought to end any connection between its obligation under employment law and its London license. Uber decided to double down on misclassification, at the expense of worker rights, safety, and the avoidance of VAT, rather than fixing its broken business model. ”

“Because TfL had declared neutrality before the court, the ADCU was forced to intervene and use our limited resources to defend the case. We will now declare misclassification illegal, make the London minicab sector more efficient, and finally end worker rights abuses.

Uber boss Dara Khosrowshahi CREDIT: REUTERS/ANUSHREE FADNAVIS


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