The recent landmark Supreme Court ruling that Uber drivers are workers could have wide-ranging impacts on the Gig Economy, and for those who earn their living from it.
As a recap, the Court has reinforced earlier judgments that Uber drivers are in fact workers and not self-employed, as Uber argues.
What is a ‘worker’
A worker can be considered half way between an employee and self-employed. They are entitled to statutory rights and benefits but not full employment rights. So now that they are workers, Uber drivers will be entitled to National Minimum Wage/Minimum Living Wage, sick pay and holidays.
Not so great news for Uber.
Whilst drivers will now be paid as workers, this will undoubtedly increase the operating costs for Uber. What will this mean for their business model? Will they be tempted to pass these costs on to users in terms of increased fares? Will they manage costs with less availability, matching driver (worker) costs to demand. Will this mean less work for the workers?
Good for Workers?
The uncertainty of earnings in the Gig Economy can be a major cause of poor financial wellbeing and stress. Any moves to reduce this uncertainty, improve financial wellbeing and resilience should of course be welcomed. But what if that comes at the expense of their overall living standards or reduces flexibility. Some are attracted to the Gig Economy because of the flexibility it offers. It’s a fine balance between flexibility and security.
Many Gig Workers will have another job, sometimes another in the Gig Economy. Will they now be classified as workers for all these?
Moreover, just because a driver is now a worker it doesn’t mean to say they will be able to enjoy the full benefits of their employed counterparts. For example, they may not be invited to join a workplace pension and benefit from employer contributions.
Inevitably there is forecast to be an increase in operating/employment costs for those businesses who now rely on workers to deliver their service.
Will consumers pay through a reduced service or are they willing to pay for the improved financial wellbeing of these workers?