Uber drivers entitled to UK minimum wage, London tribunal rules Two Uber drivers who had taken the taxi app to an employment tribunal successfully argued that UK minimum wage laws apply to Uber's British drivers, as part of a larger ongoing case against the company. The Employment Tribunal judge, A M Snelson, found that Uber's UK drivers are performing "unmeasured work", as defined by …
Uber, AirBnB etc are not tech companies, but regular Taxi and B&B booking services using apps/Internet instead of phone.
They are exploitive. Unsurprisingly not only are Uber Drivers working for Uber, but people renting out their place "significantly" rather than 2 weeks once a year need planning permission for change of use.
Deception is common to all these Internet based classified, services etc.
Indeed.
I find it extremely disturbing that el reg did not quote the more interesting bits from the judgement.
Read the graunidad coverage (especially if you can somehow pull up the initial non-updated one).
https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status
The verdict is beyond damning:
“The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous,” the judges said. “Drivers do not and cannot negotiate with passengers … They are offered and accept trips strictly on Uber’s terms.”
Pity they edited out the Hamlet quote after an update. It is hilarious - commenting on the Uber UK director that : "The lady doth protest too much, methinks"
I agree with you about airbnb, but another tech comparison might be booking.com
With booking.com there is no doubt that they are an online agent booking hotels for clients. As the hotels are businesses there is absolutely no doubt that the hotel staff work for the hotel and not booking.com
I feel this is the model that Uber will move to here. By changing the contracts and only using companies that "employ" drivers they will nimbly move around this ruling. Their drivers will be forced to become taxi companies that follow Uber business practices.
@Adam 52
Good point, but whilst Uber doesn't work like booking.com (as Uber sets the price) it is an easy enough contractual change for them to fix.
For example they could chose to only allow bookings through taxi companies that comply with their conditions. One of these conditions could be the maximum taxi rate. They could even "justify" the maximum price by saying that their focus is providing affordable taxi services with no surprise costs for their customers.
For example they could chose to only allow bookings through taxi companies
Uber and Co are competitive because it drives a the whole horsecart trhough existing regulation and legislation including minimum wage, NI, etc. The moment they have to book strictly through business entities, not "self-employed" (actually slaves), they stops being competitive.
While this means that various services like delivery will become more expensive for most of us, minimum hourly wage and NI legislation is there for a reason. I'd rather pay more for my amazon delivery or taxi ride than see these eroded.
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"Uber, AirBnB etc are not tech companies, but regular Taxi and B&B booking services using apps/Internet instead of phone."
As someone else pointed out a few months back:
These kinds of companies are reviving the old abusive practice of "piecework" for the 21st century.
There's nothing new about this business model. It's just delivered slightly differently - and there's a reason such business models were banned in the past, which is likely to result in it being banned again.
This guy does a pretty good job of explaining why Airbnb should probably be avoided:
Adam Ruins Everything - Why Your Airbnb May Be ILLEGAL (YouTube)
I believe the anon coward was suggesting that the "uber drivers" were also in fact taxi drivers from other taxi businesses, who clearly have an interest in Uber getting brought into line with every other taxi company.
Personally, I'm fine with that. It's funny how Uber have been, for a while now, the darling of the IT industry. Simply because they use an app. But that shouldn't give them a free pass to ignoring all the regulations that go with being an operating taxi firm in the UK, with employed drivers. The only good that's come of their transparent attempt to roll back employment law is that it's given the rest of the industry a kick up the behind in getting themselves up to date with available technology.
@AC - Yeah, I wish basic contract law was taught in schools. It's the equivalent of "Know your rights". There's so much that people should really have a chance of understanding (contract law, banking, bias, the 'real' value of things) that I wish it became a lesson in schools for 16 year olds.
Far more useful than some things taught at that age.
Contracts cannot absolve companies from their statutory obligations and cannot oblige an illegal act. It's amazing how many people thing otherwise.
No... contract was unfair. Doesn't matter if you agreed to it or not, an unfair contract has no basis in law and to prove that you take it to court.
Would you like to see some of the things that standard print companies think are enforceable and making schools etc. sign up to?
**Clauses discovered in standard managed print contracts**
(Paraphrased so they aren't directly Google-able, but still accurate). Bear in mind that we're talking dozens of printers, millions of pages each year, and big-money on 3-year leases (or 5-year, in some cases, because if you actually read the smallprint, the last two are "optional" but "chargeable" even if the lease says three years - that should give you a taster of what's to come), from big-names in IT, print companies in general (I guarantee you've heard of several printer manufacturers which have this shit in their contract), and people who claim to offer "one-stop" service for IT:
- "If you decide to cancel at any time, you have to give three months notice, pay 100% of the remaining quarterly costs for the year, plus 49% of the average print use for all the remaining months of the contract".
- "If you do not use our reporting software, whether by our fault or not, we will charge £15 per toner delivery" (Hint: a school might have about 10-20 toners delivered every month, on average)
- "We reserve the right to increase these costs without notice by 10% per year, or by 7% plus inflation, whichever is higher" (with: "If we increase costs by more than this, we are only obliged to notify you 30 days beforehand").
- "We will charge you £75 per printer per quarter for each printer that doesn't meet our minimum print guidelines [unspecified anywhere] as a service charge".
- "If you do not want to pay the monthly service charge, we will bill you at £150 per hour for any service required" [WTF? It's a printer, not a space shuttle]
- "This service charge does not include toners or consumable parts" [WTF?]
- "The charge for scans is equivalent to the charge for one A4 colour print" [WTFing-F? Never heard of someone charging for scans before!]
- "Nothing mentioned elsewhere [e.g. the quotes, the written promises, or even another contract] affects or overrides these contract terms."
A lot of that is unenforceable but a lot of it is not. It's based on a standard lease contract from a major firm that everyone has copied after realising a) people sign up, b) people then think they can't get out of it, c) people sometimes CAN'T get out of it without it costing them more than they have.
But because it's unfair, you can take it to a court, get it proven wrong, and stop them EVER using those terms in their contracts ever again. Until the next con is discovered.
Just because you signed it, knowingly, being of sane mind, and agreed at the time, it does NOT make it a legal contract.
That's the primary reason that EULA's are generally not considered binding contracts either in many cases. Nobody can sit and read 48 pages of terms and conditions on a mobile device every time iOS updates, so they could slip ANYTHING in, even a clause that only appears on YOUR copy of the contract (and not some other guy on the Internet who posts his analysis of the contract, for example). So a lot of that stuff just isn't enforceable.
But to prove it, you have to take it to court, which is expensive and not without risk.
"- "If you do not want to pay the monthly service charge, we will bill you at £150 per hour for any service required" [WTF? It's a printer, not a space shuttle]
- "This service charge does not include toners or consumable parts" [WTF?]"
Actually, those are pretty standard terms for off-contract servicing. Charging that for leased kit is a con, but I'd expect any service call out caused by the customer not dealing properly with the consumables to be chargeable, on or off contract. In any industry, not just printers or even IT in general.
I couldn't agree more with the rest of your assessment though.
That's Uber's plan anyway, so I think the issue at stake here is whether or not Uber will want to continue business in the UK under this labor ruling.
The problem with that for Uber is that if they pull out of the UK market, then they have to rebuild customer relationships when self-driving cars are available and they want to get back in the marketplace with those.
Google is one of the Uber backers. The low price undercuts operations that have to run at a profit. They are backing it to get the user details, routes and times. ALL the App data is kept. I'd be amazed if Google isn't getting a copy.
So this is a con on two levels. The only flexibility the drivers have is to refuse pickups. That isn't affected by the ruling despite Uber's claims. Uber otherwise controls the driver and price. It is piece work. The fact that it uses software is a means to an end, not the end (selling taxi rides and slurping all the data) the App just makes it all cheaper to run and store the data than if they were rolling out a voice phone up taxi / hackney service (not the same thing originally). So Uber is taking 25% for running an automated version of a taxi company and keeping all the valuable user/route/time data. The drivers only know about their individual fares. They are not managing, co-ordinating, marketing nor storing the data. Just accepting the piece work or turning it away.
No doubt Uber will go to the highest court, because otherwise their exploitation is exposed. It will be a terrible travesty of justice if they win. Is it worth it to exploit the drivers to undercut existing taxi operations? Otherwise Uber would be marketing their service to existing taxi companies.
Will also be interesting how a driver-less taxi can deal with disabled passengers who need assistance to board and/or load luggage.
Will they argue they can only take orders from the able-bodied?
Or that somehow taking payment for travel is not making them a taxi service?
Maybe when ordering a taxi you specify (as you do now) that you need a disabled taxi (no, I don't mean a non-functioning taxi, I mean a taxi with facilities for disabled users - wheel-chair lifts etc). I'd imagine that this small subset of taxi's (less than 5% I think) could still be staffed with a driver.
It appears Tesla are steering well clear of any association with Uber, Lyft and their ilk as they have stated you can't use their new Model X car as a taxi, because they're planning their own car share taxi-ish system 'Tesla Network' in the near future. www.theverge.com/2016/10/20/13346396/tesla-self-driving-ride-sharing-uber-lyft
How is that enforceable?
See Lee D's post above. Tech companies (and many non-tech US companies) think they can write any old shit in their T&Cs regardless of prevailing statute.
Interestingly, the egregious use of legitimate but unintended tax loopholes has now seen that practice coming under harsh scrutiny and changes made (eg EU proposals on common tax rates, various moves on withholding taxes), and if the Globocorps continue to try and ignore statute law in their contracts, that too will become not merely unenforceable at the individual contract level, but a criminal act in itself.
> How is that enforceable? I thought they sold cars, not leased them.
They sell the car, but not the software in it. I read a while ago about one of the main tractor manufacturers (John Deere IIRC) using licensing terms to lock out independent mechanics.
The process goes like : lots of stuff is controlled by the software, the software is licensed rather than sold, you need the official diagnostics software to do even basic maintenance, the manufacturer only allows it's franchised outfits access to it - and in the USA it's expressly illegal to try and bypass "technical protection measures". So an independent mechanic can't do much at all without "breaking in" to the software, something that's expressly a criminal act under their DMCA.
So coming back to Tesla, if they put a clause in the licence that you can't use it as a taxi, and they find out, then they can revoke your licence and the car becomes a vary expensive four wheeled brick. Note that you also cannot use the car without it being connected to Tesla, and they know where you've been, when, etc.
There has been some controversy over the exact position with UBER regarding VAT. Though the parent company is registered in Netherlands and has a Dutch VAT number, it looks as if UBER might have been relying on the notion that you the customer are paying the driver who is their own company, who is therefore unlikely to need to register for VAT (obligatory only on reaching a certain turnover threshold). The driver pays the parent company and consequently there is no VAT in that transaction either.
If it is now ascertained that UBER are the company being paid by the customer then VAT is due. Now the Dutch VAT number on their paperwork implies that that could be used on your VAT return (in a neutral way, the input VAT is zero because it is an EU code, not a UK one). However, the place of supply is the UK and therefore (my understanding is that) VAT needs to be charged at 20% and that (because their turnover would be higher than the registration trigger) UBER need to register for UK VAT.
With this ruling I suspect that HMRC will want some VAT and that will need to be taken into account in UBER's pricing.
I am most definitely NOT a VAT expert but a quick search or two suggested that "transport" is either zero - rated or exempt, and I couldn't find anything to suggest that taxis were not "transport".
Are you sure that VAT is currently charged on taxi fares in the UK?
Zero rating for transport only applies to transport in vehicles that have 10 or more seats - https://www.gov.uk/government/publications/vat-notice-744a-passenger-transport/vat-notice-744a-passenger-transport#zero-rating-passenger-transport
There is an exemption whereby if you take out seats to make room for a wheelchair, you can pretend the seats are still there for VAT purposes, but nevertheless, Über cars have nowhere near 10 seats, usually they have 5.
Also, place of supply for transport in the EU is the place where the journey commences, regardless of where the company providing it is located. If the journey starts in London, it is subject to UK VAT no matter what. Even if you pick someone up at the Eurotunnel terminal in Folkstone and head for the South of France, the journey takes place in the UK for VAT purposes.
"I suspect that HMRC will want some VAT"
They may *want* some, but their track record in this is so abyssmal that I suspect they will "do a deal" that lets Uber draw a line under the whole of history in exchange for the princely sum of fourteen pounds and twenty-five pennies.
"draw a line under the whole of history in exchange for the princely sum of fourteen pounds and twenty-five pennies."
It's called "doing a Vodafone", innit. The names Dearnley and Hartnett also come to mind, and again the letters H M R and C:
http://www.computing.co.uk/ctg/news/2286357/vodafone-cio-to-become-hmrcs-chief-digital-and-information-officer
http://www.dailymail.co.uk/news/article-2270813/Former-UK-tax-chief-Dave-Harnett-lied-MPs-advise-HSBC-bank-honesty.html
"The driver pays the parent company and consequently there is no VAT in that transaction either."
If by "parent company" you mean Uber which, as you say elsewhere, is big enough to be VAT registered why would that payment not incur VAT? And if that's the case then either the driver can't reclaim VAT or would have to be VAT registered and hence would have to charge VAT to the passengers.
Well spotted. I was thinking of things from the other way round.
However, have a look at an UBER invoice and it (apparently) shows zero tax. I believe there is a zero rate in Netherlands for entrepreneurs, however it does not apply to the supply of services to a non-registered entity in another EU country. So either way, there is a flaw in their treatment of VAT.
The passenger pays Über for the cab journey, and that is what Über issues the invoice in respect of. As explained above, if the journey commences in the UK, UK VAT rules apply regardless of where the company is situated, so they should be charging VAT at 20%. There is no possibility of EU reverse charge on this supply as it isn't a cross-border trade. If someone from another EU country comes to London on a business trip and uses Über for business travel, they would have to do an EU VAT refund claim to get the VAT back. They submit this return to their local tax office along with a copy of the receipt, and it gets forwarded to HMRC who will pay the money directly into the company's bank account if the claim is approved.
Über pays the driver, and as we have established that the payment is in the form of wages, there is no VAT on wages, so Über can't claim anything back there.
This ruling might impact upon a larger community. Those whose conditions of employment force them to use their own vehicles for transport 'between' jobs, those who work such long hours that their salary (when calculated against hours worked rather than hours contracted) falls below the national minimum.
Carers, working for home care companies, or local authorities, often have a requirement that they use their own vehicles for transport between jobs. The travel time is not recognised as work related either. So, often, the actual time taken between starting work, and finishing for the day / week, means that the employee is paid significantly below the minimum wage.
Many in the IT industry are pressurised into working extra hours without pay or time off in lieu. Sometimes this is just an hour or two a week, very often (in my experience) much, much more. As 'salaried' employees they (we) do not get overtime. Thus when our actual hours worked, are calculated into our salary, we are getting quite a raw deal.
A whole section of the employed community, the armed forces, poorly paid for a normal working week, find that their real hourly rate is minuscule when on active service.
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