Maidstone’s Taxi drivers have been under pressure recently from the “Uber” sensation. Uber drivers provide an unlicensed and cheaper service without the extensive training, disability access considerations, safety and insurance that is mandatory for a regulated taxi service. As part of the “sharing economy” the relationship between driver and rider is one of friends giving and taking a lift.
Uber provide a phone app and agree the cost with the passenger and then send one of the many drivers who have signed onto the scheme to collect the passenger and drop them off at their destination. Uber started in California and in less than a decade has spread across North America and Europe. It claims to provide an introduction service facilitating riders who need to make the journey and self-employed drivers who are prepared to provide the journey. It is a very modern and cyber friendly approach to business reliant upon cloud based technology
However, the Employment Tribunal, taking a rather 20th Century approach of the Uber service, has recently ruled that the Uber drivers are not self-employed, independent agents answering a call but are in fact workers and so therefore are entitled to workers’ rights such as the minimum wage, working-hours’ protection, and paid holiday. This is something which will prove expensive and very onerous for a business which has suddenly found itself changing from a small web based organisation with large profits, to one of the UK’s biggest employers. It will almost certainly result in a not insignificant cost increase which is likely to be passed on to the travellers.
The knock-on effect could also have a real impact on other web based businesses which offer introductory services, such as Air BnB and the various Crowdfunding platforms, which contribute towards the Sharing Economy. It is expected that Uber are going to appeal the decision, but for the meantime, Kent’s licensed cabbies can hope that the Uber bubble may be deflated for a while.
If your business wants to take advantage of the Sharing Economy, or is suffering from unfair competition, please contact SNS Solicitors who can provide advice and help with all matters relating to Regulatory and Employment Law.