Uber’s Recent PR Nightmare:
The Future of the Gig Economy
TFL’s recent revocation of Uber’s London operating license sent shockwaves as the world was once again reminded of Uber’s poor track record with regulation and authority; as tribunals increase and the big-hitters of the gig economy are scrutinised, should employers be doing more to ensure the correct classification of their workers?
Uber has undeniably built its huge empire on aggressive business practices to crush the competition in cities around the world. The app provides work for 40,000 drivers in the capital alone and offers a low-cost, on-demand alternative to London’s under-pressure public transport system as the city’s population rapidly increases.
However, TFL’s charges against Uber are wide-ranging, citing their failure to adequately assist police with criminal investigations against their drivers and a lack of transparency with regulators. One of the criticisms levied against the company is their manipulation of the gig economy’s flexibility – that is, their practice of recruiting drivers as self-employed who should legally be considered workers, in order to avoid paying salaries and benefits as an employer. An employment tribunal ruled last year that Uber drivers were indeed workers and therefore entitled to holiday, sickness and overtime benefits; Uber’s appeal against this decision was lodged days after their license was revoked, continuing a recent cycle of very poor PR for the business.
Last week, CEO of the new dry-cleaning convenience app Laundrapp Ed Relf delivered a talk at the Technology for Marketing event in Olympia where he touched briefly upon employer responsibility in the evolving application-led marketplace. Relf said his business had made a conscious decision to ensure all members of the Laundrapp team were fully-employed, despite the on-demand nature of the service. He felt this sent out a positive message to consumers and added value to the convenience proposition of the app – his employees feel like part of the team and are completely invested in the business’ success or failure.
Although it remains to be seen whether this signals a step-change away from gig economy practices and back towards traditional employment, it highlights that some organisations at least are looking beyond cost-saving and considering the longer-term impact of manipulating legal ambiguities and easy fixes.
One thing remains clear for employers; compliance is key. Companies wishing to avoid protracted and expensive disputes must audit their practices and take steps to move in-line with legislation. If your organisation wants more advice on the employment of its workers, worker classification, risks relating to permanent establishment and tax or immigration practices, Mauve Group can provide detailed Risk Assessment reports covering your specific circumstances. For more info, get in touch via the Contact page.
The information provided has been checked for accuracy as of the date of publication, and is intended as a general guide and for information purposes. It is subject to unanticipated and unexpected changes and does not constitute legal advice.