Uber court case: What is it and why does it matter?

  • Consumer
A court has ruled that Uber drivers are employees, not self-employed Credit: PA

A tribunal has ruled that people working for taxi firm Uber should be classed as employees, not self-employed - entitling them to minimum wage and holiday and sick pay.

But what exactly does that mean for everyone else?

Here's what you need to know:

  • What is Uber and who are the drivers?

Uber is a now-global firm which allows people to order taxis via a mobile phone app. Users submit their trip request, and the app automatically contacts the driver closest to their location and sends them to complete the trip.

Drivers use their own cars, and are paid automatically via the app, meaning there are no cash transactions.

  • Are the drivers self-employed?

Uber says yes; the court judgement today has ruled no.

In a statement, the company's regional general manager Jo Bertram said their business model allows people to "be their own boss" by deciding when they work and how long they work for - an model the firm believes has been key in attracting people to work for them.

Uber had argued that it was a technology company, and the drivers were independent self-employed contractors using that technology to make money.

But lawyers representing two drivers in a test case argued that the terms and conditions of their work meant that they should be classed as employees. One said he had been put under "tremendous pressure" to work long hours and accept jobs, with "repercussions" from the company if he cancelled pick-up request.

Uber says its model allows drivers flexibility Credit: PA

  • What does the court judgement mean?

In essence, it puts Uber drivers on a level with any other employee for any other company - they will be entitled to the national minimum wage of £7.20 an hour for over-25s, and will get holiday and sick pay.

The workers who signed up to the action may also be able to claim missed holiday pay and back payments for any work which fell below the minimum wage.

Other drivers who did not sign up to the claim will not automatically receive payments, but if the court's ruling stands then the firm will have to change its contracts.

  • How many people are affected?

There are around 40,000 people working as drivers for Uber in the UK - but the ramifications could extend far beyong that.

Uber is part of the so-called 'gig economy' - a network of on-demand platforms common on apps and websites, which put people in need of a particular service in contact with others who can provide it.

Other examples include food delivery company Deliveroo and cleaning firm Handy, while sites such as Upwork provide digital services such as writing, design and data entry, etc.

An online survey of 2,238 UK adults aged between 16 and 75 found that 21 per cent had tried to find work managed via such platforms in the past year alone - the equivalent to around nine million people nationwide.

Just over one in 10 (11 per cent) said they had succeeded in doing so.Today's court ruling could have implications for everyone who finds work in this way.

The ruling could have ramifications for other firms like Deliveroo Credit: PA

  • What are the advantages of the 'gig economy'?

Flexibility is the major selling point for companies such as Uber - allowing people to earn money around other commitments in their life, and those offering digital services can often work from home.

It's also a cheap model - the company does not require a physical premises, nor a large administrative team.

It can be a quick and easy way to earn money for people between jobs or trying to make a little extra.

  • So what's the downside?

With flexibility comes uncertainty - income can be unpredictable.Some may flourish, but others might do very badly - or might be forced to work long or inconvenient hours to bring in enough money.

The big negative is that it moves costs - office or vehicle payments, for example - onto the individual rather than the company. Anyone wanting to be an Uber driver has to have a car which is less than five years old - and they have to pay for a Private Hire Vehicle licence from their local council.

It also means there will be a gap in income for any time off, whether that's through choice, ill health or holiday.

The growth of Uber in particular has caused concern - not least among traditional Hackney and private hire taxis, who have argued that "light-touch" legislation is putting passenger safety at risk and allowing Uber to avoid paying its share of tax.