Uber Judgment – You are workers, but we are not a cartel …

The Uber judgment from the UK ET, which was released, this afternoon is the first stage in what will no doubt become and important litigation for the future of the ‘gig economy’ in the UK. Employment lawyers will be the first to feel its impact (if my colleagues schedule of hastily arranged press interviews is anything to go by) but if this interpretation of the arrangement between Uber and its drivers stands in the UK it will also have an impact on competition law.

The first impressions of the judgment. on twitter at least, suggest that when a driver has the app switched on and they are accepting rides they are ‘workers’ for the purposes of UK employment law. This is controversial as Uber have always argued that the drivers are self-employed independent contractors and do not have a ‘worker’ relationship with the firm. If they are workers it will caused issues for Uber as workers have certain rights, for instance in relation to minimum wage and holiday pay, which Uber must ensure.

The finding of worker status for Uber drivers has an interesting positive for Uber outside the employment context. It protects Uber from a raft of potentially difficult competition law issues. The biggest ‘win’ for Uber in this regard is that the difficult question of how it is lawful for the Uber app to fix prices for ‘independent contractors’ is avoided. As the Uber drivers are now workers any agreement/arrangement they have with Uber on pricing takes place within an undertaking and competition law scrutiny under ART 101 TFEU, or its domestic equivalent, is no longer relevant.If Uber drivers were independent Uber would have had to make a difficult Art 101(3) argument that the common pricing structure, essentially a hub-and-spoke cartel of sorts, was a necessary part of its business model, and even with such a hard-core competition restriction the agreement worked to the benefit of consumers. It is not impossible to contemplate such an argument, but it would not have been any easy task.

Given that this is only an ET judgment there is still plenty to play for, as it is bound to go to appeal. The only certainty is that if the employment lawyers don’t get Uber, the competition lawyers will …