Before too long, news that Uber will offer 70,000 drivers holiday pay and the national living wage will be viewed less as an unmitigated triumph than a Pyrrhic victory. In the UK you can be an ’employee’ with an ever-growing raft of employment rights, a ‘worker’ with rather fewer rights, or ‘self-employed’. These statuses have different implications for tax purposes.
Last month, the UK Supreme Court, ending a six-year case brought by two Uber drivers, ruling that the ride-hailing firm must classify drivers as workers rather than self-employed. This week, the consequences of that judgment begin to be felt — though it is the government’s fault that, in repeatedly failing to grasp the nettle and draft a new law fit for the 21st century, an issue as important as the gig economy was left to the courts.
While Uber’s PR machine is firing out statements around ‘quality of work’ and ‘additional benefits’, it takes a short memory to forget that this is precisely what the ride-hailing firm fought against for half a decade. Despite the firm’s valiant efforts to retain the traits that made it so revolutionary when it first hit our screens 12 years ago, it may survive only as a poor shadow of its former self.
No perky press release can convince us that Uber has discovered a new gig-topia in which workers can be handed more rights with no repercussions. Regrettably, it goes against the laws of economics to suggest that self-employment status will be retained, overall ‘profitability’ unimpeded, and competitive fares maintained following the introduction of these largely unsought benefits.
While Business Secretary Kwasi Kwarteng warmly declares that the move is ‘absolutely to be welcomed’, the opposite is true. We are sending out a signal that innovative employment possibilities must increasingly be dampened with regulations and higher costs.