Uber’s main argument for the legitimacy of their practices is one in line with its business model: their drivers are their bosses. Source: Business of Apps

London – Starting today July 20, the successful transportation company Uber faces a legal dispute at the Central London Employment Tribunal for claims made by 19 of its drivers who request basic worker rights.

The ride-hailing app and service pay 80% of the fare charged to passengers while keeping the remaining 20% for self-profit. In spite of this, testimonies given by Uber drivers working in the London area point out that the economic model of the company can, at times, leave them earning less than minimum wage.

James Farrar, a driver for Uber for the last two years, stated in the presence of the tribunal that he received as little as £5.03 an hour for his services in August 2015. This puts Mr. Farrar’s income at an average of £2 below the minimum wage rates established in the U.K. last April, a dire situation to be in on any country.

Moreover, further testimonies shed light on working conditions for Uber drivers in the British city, who declared that they feared for their jobs when not meeting the labor demands set by the company.

Drivers complained about these instances and formally requested to be recognized as workers of the transportation business in hopes of netting the benefits they do not receive at the moment. Such claims include minimum wage, sick pay and paid holidays, workers’ rights to which they are not entitled given their legal employment status in the eyes of the British government.

Uber drivers are classified as ‘self-employed’ partner drivers of the ride-hiring network and therefore do not qualify as employees who would receive the benefits as mentioned earlier.

From Startup to Business Mogul

Initially, a startup founded in 2009 and launched locally in San Francisco two years later, the rise of the company has led them to become one of the most successful business ventures in the last few years.

Taking advantage of the new technologies and the everlasting drive of economic independence, Uber sought to turn drivers all around the world into business partners. Uber’s meteoric rise launched their service overseas and is present in more than 400 cities in over 60 countries.

Furthermore, investors of the firm include heavyweight names like Microsoft, Google and Goldman Sachs. The mobile app and transportation service are currently worth over $60 billion, as estimated at the end of last year.

A Game-Changing Decision

Uber’s economic model of self-employment along with its popularity among fast-living individuals has been the subject of much criticism since its rapid expansion around the world.

Traditional cab services in the U.S. and Europe have loudly voiced their views on the company’s low rates and sweeping takeover of their trusted customer base.

This past year 2015, protests made the headlines of several news outlets after taxi driver unions banded together to reject the unfair competition that the San Francisco-based company poses for them. The claims made by taxi drivers, however, are not mere tantrums or empty arguments.

Cabbies allege that Uber drivers are not subject to the same rules and regulations that they are, as well as posing a threat to society for the same lack of control. Various accidents and security related incidents in the past have placed the on-demand ride service at the center of controversy.

The internet based company makes it a difficult nut to crack concerning regulation frameworks and jurisdictions, especially as they deal with transportation services.

Despite being banned in several cities and facing restrictions from other entities, the consequences for Uber in the United Kingdom remain to be as severe. The traditional black cab service and its drivers in the city of London have protested against the legality of their transportable competition.

Naturally, the legal challenge in London is not only backed by a firm of lawyers representing the 19 drivers but is also supported by the GMB, one of the largest and oldest unions in the United Kingdom. The union claims that fundamental worker rights must be provided by companies like Uber, who purposefully conceive their platforms to bypass regulations and not meet standard labor demands.

However, Uber’s main argument for the legitimacy of their practices is one in line with its business model: their drivers are their bosses.

Drivers enrolled as partners of the car-hailing venture will work and earn as much as they wish or can, keeping up to 80% of their profits for each ride they give. The attractiveness and success of the model can be attested by the 30,000 workers who make life as drivers in London alone.

The dispute over minimum wage and fundamental rights for Uber drivers will continue until next week, but the date in which the judge will state his verdict is still uncertain. What is indeed certain is that mobile based companies like Uber in the U.K. and all over the world will keep an eye on the decisions ruled by the British tribunal.

Source: The Guardian