Realist, not conformist analysis of the latest financial, business and political news

A Very Bad Judgement

From our Swindon Correspondent:

There’re reasons we should generally simplify laws, especially around employment and tax. From the BBC:-

Uber drivers must be treated as workers rather than self-employed, the UK’s Supreme Court has ruled.

The decision means tens of thousands of Uber drivers are set to be entitled to minimum wage and holiday pay.

The ruling could leave the ride-hailing app facing a hefty compensation bill, and have wider consequences for the gig economy.

Well, firstly, we don’t know how many of those drivers will be entitled to that, at least going forward, because maybe Uber thinks the UK is a bad idea now.

Delivering his judgement, Lord Leggatt said that the Supreme Court unanimously dismissed Uber’s appeal that it was an intermediary party and stated that drivers should be considered to be working not only when driving a passenger, but whenever logged in to the app.

The court considered several elements in its judgement:

Uber set the fare which meant that they dictated how much drivers could earn

So? If I hire a painter and decorator, I can tell him how much I want to pay, can’t I? He can always reject that, but you could turn the contract that way around.
Uber set the contract terms and drivers had no say in them
Well, the “say in them” is that you can always refuse. I might come up with a garish style that I want a painter and decorator to do in my lounge. And I could always say “and no arguments, take it or leave it”.
Request for rides is constrained by Uber who can penalise drivers if they reject too many rides
If you call a painter/decorator and he keeps telling you he doesn’t want the work, you’d stop phoning him, wouldn’t you? So, what’s the difference?

Uber monitors a driver’s service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve

And how is this different to me hiring a painter and decorator and after a couple of jobs, I realise that he makes a lot of mistakes that I have to call him back in to fix?

These are not good ways to be determining employment or otherwise, and really, we should stop trying to classify it and just let people get on with choosing what works. I do freelance work and not getting holidays or sick pay is irrelevant because I get paid more to compensate. Some chefs effectively paid to work at the finest Paris restaurants to learn, once you deduct rents from low wages.
Lots of people like the gig economy. I had an Uber driver who just did it so he could own a nice shiny BMW 5 Series. He didn’t want to drive full-time. He had an office job Monday to Friday. I know a programmer who loves being a PSV driver occasionally, driving groups of old people to the seaside or whatever. Students like the arrangements at McDonalds or Cineworld because they can prioritise exams or going to a music festival.
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Spike
Spike
1 month ago

A horrible Supreme Court decision that again views workers as victims of someone with a lot of money. Compare AB 5 in California (the people recently passing a referendum to carve out an exception for Uber et al) and the PRO Act in Congress. Uber drivers do it for the independence, and of course no one who interacts with others is completely independent. Gov’t wants every bit of work to be well-defined, well-taxed, and static.

Bloke in Kent
Bloke in Kent
1 month ago

Is this decision against Uber specifically? If so can they not just spin up Uber UK or whatever and move all the activity into the new company – then the whole legal process would need to start from scratch?

Spike
Spike
1 month ago
Reply to  Bloke in Kent

I think sanctions are in place to keep a firm from evading a court judgement by setting up a copy of itself and protesting that the new one is not exactly the thing the judgement went against – that is, to set up a sham corporation to stay one step ahead of the law.

Esteban
Esteban
1 month ago
Reply to  Bloke in Kent

The problem is that this ruling is effective retroactively. Uber has been treating these people as independent contractors but they’re legally (now anyway) employees. So Uber owes them back pay & is on the hook for insurance, etc. If Uber reincarnates, once they’ve been sued – and this type it’ll be quicker to resolve – they’ll be on the hook again.

TD
TD
1 month ago

The left hates gig workers (hard to tax I suppose) and would rather see them out of work than continuing to work as they are doing. That’s been frustrating for musicians in California who came close to being told they could no longer play for pay unless employed by the venue. They also hate online platforms such as Google or Facebook as well as Amazon. Should Uber shut down in the UK, as they threatened to do in California before the passage of the recent referendum, or as Facebook has just done in Australia, it will be interesting to see… Read more »

Spike
Spike
1 month ago
Reply to  TD

This is chronic; for decades the IRS has had rules to distinguish between contractors and employees, and one of them was that a “contractor” needs to have three “clients” which, in technical services, no one starting out does, nor a good established one, as a client often wants all your time. Tech-writers don’t lobby Congress, but Temporary Employment Agencies do. I was told that some, for a fee, would go through the motions of letting you be in their stable while you book your own work.

Spike
Spike
1 month ago
Reply to  TD

PS – Yes, something else will definitely spring up. Credit unions, cellphones, and cable television emerged partly to evade the stasis of a regulated industry. It happens much more often than the legislature passes actual deregulation.

TD
TD
1 month ago
Reply to  TD

I also see that Rupert Murdoch’s Australian media businesses have cut a deal with Google for payment to them. You have to smile, or perhaps grimmace, a bit at the notion of the Aussie government coming down hard on Murdoch’s side because he is too weak a player to go up against Facebook and Google on his own.

Bloke on M4
Bloke on M4
1 month ago
Reply to  TD

It’s just as easy to tax gig workers, and maybe you get even more tax money.

This is more about unions. Unions hate gig workers, because gig workers don’t unionise. By trying to get rid of gig working, they hope to get more people joining unions. That’s why this case was brought by the GMB Union on behalf of a grand total of 80 Uber drivers (out of about 40,000).

TD
TD
1 month ago
Reply to  Bloke on M4

To some extent you’re correct, but the self employed can take lots of deductions and few are audited.

David Bolton
David Bolton
1 month ago

I did a spot of private hire driving back in the 90s in the Northwest of the UK. I was paid half of the take after fuel had been deducted. The other half went to the owner of the car who owned the car and was responsible for the monthly taxi firm radio dues (£250) and insurance which even then was over £1,000 per annum.

I had no minimum wages, no sick or holiday pay. I imagine there’s quite a few gigs that have always been like this.

TD
TD
1 month ago
Reply to  David Bolton

I remember a musician once that I used to see play in local bars back in the ‘70s who told me it took him five years before he was able to support himself playing music. That was a combination of lessons, bar gigs, tips, and perhaps a few self produced CD sales. And it was a pretty simple living. No sold out stadiums. Nice guy. B talent. Should the bar owner have been required to pay him more?

MrVeryAngry
MrVeryAngry
1 month ago

Bloody Blair. The legacy of his malign and destructive regime hangs over our liberties like the eruption of Vesuvius hung over Pompeii. The Supreme Court is an abortion.

jgh
jgh
1 month ago

“must be treated as workers rather than self-employed”

There’s some serious destruction of the language taking place there. If you’re working – by whatever means whatever – you’re a worker. You work, you do work, you expend energy and implement actions, you’re a worker. “worker” and “type-of-employment” are seperate dimensions. You can be a non-worker, you can be a worker, you can be a self-employed worker, you can be an employed worker, you can be a freelance worker, it’s not “employed” vs “worker”, they are different axis.

Charles
Charles
1 month ago
Reply to  jgh

According to the Employment Rights Act 1996 section 230
(3)In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)—

etc. See https://www.legislation.gov.uk/ukpga/1996/18/section/230

Charles
Charles
1 month ago

“how is this different to me hiring a painter and decorator…” It’s different in that if you are hiring someone you are their employer, while Uber were claiming that the passenger was the employer. The features of the three-way relationship between passenger, Uber, and driver wer being examinined to see what was the true state of affairs. “If I hire a painter and decorator, I can tell him how much I want to pay, can’t I?”. You can, but that would be extremely unusual. Normally he would tell you how much the job would cost and it’s you who would… Read more »

TD
TD
1 month ago
Reply to  Charles

There is something rather cavalier about your comment. What you’re really faced with is the blunt reality that Uber or other such employers might simply shut down in your area and the people doing the work are out of work. I assume you would rather see them unemployed than working in a manner of which you disapprove, but will the newly unemployed thank you for that? It’s not a bluff as Facebook has just shown in Australia. Uber also threatened to cease its operations in California which was abated by the passage of a referendum kaboshing the newly enacted law… Read more »

Charles
Charles
1 month ago
Reply to  TD

Whether Uber shuts down or not has nothing to do with deciding whether they’re obeying the law. If they are not obeying the law they must start doing so and if that makes the service unprofitable, they can either go away or campaign to have the law changed. What we cannot tolerate is some kind of special arrangement whereby they get away with doing things that other companies cannot. Even if there is a huge need for a disruptive influence in the taxi/minicab field, there’s no reason why it has to be Uber.

Spike
Spike
1 month ago
Reply to  Charles

I am forced to side with Charles, TD; your lament for the sidelined Uber driver has to be tested against the case of the neighborhood heroin dealer. The analogy isn’t direct, as in the case of Uber, the law doesn’t claim harm to anyone (except the taxi racket) but seeks to fit everyone into a “job” where gov’t can dictate terms and benefits.

TD
TD
1 month ago
Reply to  Charles

But Uber wasn’t violating a law. A new law was passed to force Uber to act in a certain way with the knowledge that it would bust Uber’s business model, and Uber threatened to pull out of California. I don’t know about the UK. This would have cost the drivers their occupations, or their side gigs as the case might be. This has nothing to do with obeying the law. It has to with imposing new laws to drive something out of business and the people who utilize it be damned.

Spike
Spike
1 month ago
Reply to  TD

AB 5 was a horrible law, passed with a wink from established businesses to “help” gig people by imposing stasis on them. If Californians hadn’t voted for a tiny exemption, and if Uber remained in the state, it would be breaking the law. We ought not to endorse lawbreaking out of concern for Uber but try to repeal the law, and try not to let it go nationwide as the “PRO Act.”

TD
TD
1 month ago
Reply to  Spike

But Uber didn’t break a law, though they suceeded in thwarting the implementation of a new one.

Michael van der Riet
Michael van der Riet
1 month ago

Navigating this new layout is a real PITA. I vote for the old format.

Spike
Spike
1 month ago

Seconded. I can comment from phone but no longer from the old kitchen-table rig.

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