New Uber CEO Dara Khosrowshahi may have found an early nemesis in the form of London Mayor Sadiq Khan. But for the rider-sharing firm’s legal team, just one name dominated the beginning of 2017: Gary Smith.
Smith had worked for Pimlico Plumbers, the British capital’s largest plumbing company, from 2005 to 2011. He was unable to work for anybody else. But when illness struck, and Smith asked for reduced hours, Pimlico refused. It took his branded company van, too.
A lengthy court case concluded this February with the ruling that Smith was not an “independent contractor”, as Pimlico argued, but that he was a full worker with all the benefits that entails. “We are absolutely delighted,” Smith’s lawyer Jacqueline McGuigan said. “The decision brings welcome clarity to the issue of employment status relating to work in parts of the economy.”
‘Parts of the economy’, many concluded, meant the burgeoning gig economy, which employs around five million people in Britain, or around 15% of the country’s working population. Could the Pimlico case open a can of worms for tech firms like Uber and Deliveroo, which rely on employees to work without holiday or sickness benefits?
This July Britain’s government released the Taylor Review, which aims to redress some of the supposed shortcomings those in the gig economy face. Changes include requiring service platforms to pay workers 1.2 times the national minimum wage and higher potential fines for offending companies.
That would seem to pave the way for a raft of damaging law suits brought against tech’s leading gig economy brands. But the second half of the year has been a mixed bag – and highlights just how uncertain lawmakers are about firms that have, in just a few years, transformed economies worldwide.
One of those companies is Uber. The San Francisco-based behemoth has continually batted off legal claims its drivers are workers, maintaining they are self-employed contractors. This month it suffered its second courtroom defeat on the issue, when a London employment tribunal ruled its drivers were in fact workers. Like Pimlico’s case, Uber’s is expected to head to the British Supreme Court next year.
Deliveroo, the food ordering service, is another startup fighting tooth and nail to prevent its riders from receiving regular work benefits. It has been more successful, however. Last week an arbitration court found in favor of the London-headquartered company, citing riders’ ability to switch out shifts with friends.
“It seems that after a series of defeats, finally a so-called gig economy company has found a way to game the system,” union leader Dr Jason Moyer-Lee told the BBC.
Cue celebrations among Deliveroo’s C-suite. But its win has stirred British politicians. Today two Parliamentary committees announced they would be looking to close employment loopholes they say have been exploited by gig economy firms. Deliveroo riders, for example, face an “unacceptable burden” to prove they are “workers”.
Deliveroo’s, and Uber’s, legal teams will envision far more days in court. But while they will be confident of securing victories the political screw is tightening. And unlike in the United States, where such issues are partisan, Britain’s politicians are turning against tech’s gig leaders wholesale.
It may be a long time before anything major changes. But gig economy startups may soon need to change the way they hire and fire. And Europe’s, and America’s, fellow firms are taking note.