Uber Technologies Inc. lost a suit over how the controversial taxi company treats its U.K. drivers in the first ruling to come out of a London tribunal examining whether they’re entitled to the minimum wage or holiday pay.The case, brought by two drivers, is the first against Uber in Britain and could have ramifications for the rights and pay of more than 40,000 drivers using the service in the U.K. The company said that its UberX drivers in the country received an average of 16 pounds ($19.50) an hour after Uber had taken its service fee.
“This judgment acknowledges the central contribution that Uber’s drivers have made to Uber’s success by confirming that its drivers are not self-employed but that they work for Uber as part of the company’s business,” Nigel Mackay, a lawyer at Leigh Day who represented the drivers, said in an e-mailed statement Friday.
The San Francisco-based company has faced complaints about working conditions around the globe. A $100 million-settlement in a U.S. lawsuit with 385,000 current and former drivers in California and Massachusetts was rejected by a federal judge.
Uber said that while the London ruling only affects two people, it planned to file an appeal.
“The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want,” Jo Bertram, regional general manager of Uber in the U.K., said in an e-mailed statement.
Winnings at London’s employment tribunals are capped at about 80,000 pounds unless claimants can prove they’ve been victims of discrimination or were mistreated for blowing the whistle on corporate misconduct.
The company was valued at $66 billion in its latest round in June, making it the world’s most valuable privately-held technology company.
The decision could have wide-ranging impact for the group of technology companies that claim they are operating “marketplaces” that connect freelance workers with customers. Among these companies are food delivery services like U.K.-based Deliveroo and Berlin-based Foodora, a brand that is run by Rocket Internet’s Delivery Hero.
“This decision will potentially open the floodgates for further claims, not just from Uber drivers but from thousands of others who work in the gig economy,” said Lee Rogers, an employment lawyer at Weightmans, who wasn’t involved in the suit.
In New York City earlier this week, the taxi drivers’ union and individual drivers sued Uber, claiming it engaged in “wage theft” by not paying minimum wage or overtime. Some of the same drivers and the taxi union had previously filed a different suit in U.S. federal court alleging Uber violates the U.S. Fair Labor Standards Act and New York labor law.
Uber has faced similar actions in the U.S. states of California, Florida and Massachusetts too. In those cases, Uber has so far been largely successful in arguing that drivers must take their disputes with the company to private arbitration, which prevents the drivers from pursuing a class action lawsuit against the company.