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Currently, there are close to 1,000 pending similar cases against Uber which had been stayed until this case was completed.
Popular ride-hailing technological company Uber Technologies Inc (NYSE: UBER) has lost a major case in the United Kingdom over the status of its drivers. According to the ruling by the country’s Supreme Court, the drivers of the app should be recognized as workers and not independent contractors.
Meanwhile, today in the pre-market, Uber stock is 2.12% down, trading at $57.75.Yesterday, the stock closed with a 2.98% fall.
The almost five-year litigation was concluded unanimously by the judges of the court who ruled against the technological company. The court’s decision could have a wide-reaching effect on how Uber operates going forward and an even bigger impact on the gig economy.
In 2016, Uber had been sued by a group of its former drivers who said they were workers of the company, and as such they were entitled to the rights of average workers. Their prayer to the court was that they should enjoy certain labor protections like minimum wage, holiday pay and rest breaks.
Uber, however, has insisted that its drivers were self-employed and that it was only acting as an “agency” by connecting these drivers to passengers. The firm also went on to argue that most of its drivers would rather they remain classified as “independent contractors” because the gig model was also more flexible to them. This model was also very favorable to the ride-hailing app.
Jamie Heywood, the regional general manager for Northern and Eastern Europe, said that its firm would respect the Court’s decision. He went on to add that the app has “made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.”
Though the case is only applicable to the drivers involved in the 2016 case, theoretically, it could be applicable to other drivers who use the app too. As it stands, Uber would still have to go back to the employment tribunal to determine the amount that would be paid to those drivers.
Currently, there are close to 1,000 pending similar cases against the firm which had been stayed until this case was completed.