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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Uber B.V. ("UBV") & Ors v Aslam & Ors  EWCA Civ 2748 (19 December 2018)
Cite as:  WLR(D) 6,  EWCA Civ 2748,  RTR 25,  3 All ER 489,  ICR 845,  IRLR 257
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ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HHJ Eady QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE UNDERHILL VP
LORD JUSTICE BEAN
| UBER B.V. ("UBV") (1)
UBER LONDON LIMITED ("ULL") (2)
UBER BRITANNIA LIMITED (3)
|- and -
|Yaseen ASLAM (1)
James FARRAR (2)
Robert DAWSON & others (3)
Jason Galbraith-Marten QC and Sheryn Omeri (instructed by Bates Wells and Braithwaite LLP) for the First and Second Respondents.
Thomas Linden QC (instructed by Leigh Day) for the Third Respondents
Hearing dates : 30-31 October 2018
Crown Copyright ©
Sir Terence Etherton MR and Lord Justice Bean:
"The core issue remains as to whether the claimants are "workers" for the purposes of the various definitions under the domestic legislation. There are also conflict of laws issues, but these have narrowed substantially.
a) Uber now accepts that the Tribunal has jurisdiction in respect of all of the respondents, i.e. that it is competent (in the international jurisdiction sense) to adjudicate the claims against all of the respondents including UBV.
b) They also accept that the WTR apply to the claimants provided they are workers as defined;
c) They also accept that the ERA and the NMWA would apply to any claim against ULL provided they are workers.
d) But they say that the ERA and NMWA do not apply to any contract with UBV – Dutch law applies such that the claimants do not have any protection under UK employment legislation."
If the claimants are "workers", the Tribunal is then asked to determine, in principle, what counts as work and/or working time for the purposes of the WTR and the national minimum wage legislation."
a) English law applied;
b) The Claimants were "employed" by ULL as "workers" within the meaning of section 230(3)(b) of the ERA 1996, the Working Time Regulations and the NMWA;
c) The working time of each of the Claimants started as soon as he was within his "territory" (London), had the App switched on and was ready and willing to accept trips, and ended as soon as any of those three conditions ceased to apply;
d) For the purposes of the National Minimum Wage Regulations 2015 the Claimants were engaged in "unmeasured work".
"Taking an Uber"
"15. The Uber system works in this way. Fare-paying passengers must be aged 18 or over. They register by providing certain personal information including credit or debit card details. They can then book a trip by downloading the App on to their smartphones and logging on. They are not obliged to state their destination when booking but generally do so. They may, if they request, receive a fare estimate. Once a passenger request has been received, ULL locates from the pool of available drivers the one estimated by their equipment, which tracks drivers' movements, to be closest to the passenger and informs him (via his smartphone) of the request. At this stage the driver is told the passenger's first name and his/her rating. He then has 10 seconds in which to accept the trip. If he does not respond within that time he is assumed to be unavailable and another driver is located. Once a driver accepts, ULL confirms the booking to the passenger and allocates the trip to the driver. At this point the driver and passenger are put into direct telephone contact through the App, but this is done in such a way that neither has access to the telephone number of the other. The purpose is to enable them to communicate, for example to agree the precise location for pick-up, to advise of problems such as traffic delay and so forth. Drivers are strongly discouraged from asking passengers for the destination before pick-up.
16. The driver is not made aware of the destination until he has collected the passenger (he learns it from the passenger directly or, where the passenger has stated the destination to Uber, from the app, when he presses the 'Start Trip' button). The App incorporates software linked to satellite navigation technology, providing detailed directions to the destination. The driver is not bound to follow the route proposed and will not do so if the passenger stipulates a different route. But an unbidden departure from the App route may have adverse consequences for the driver (see below).
17. On arrival at the destination, the driver presses or swipes the 'Complete Trip' button on his smartphone. Assuming he remains logged on to the App, he is then eligible to be allocated further trips.
18. At the end of any trip, the fare is calculated by the Uber servers, based on GPS data from the driver's smartphone. The calculation takes account of time spent and distance covered. In 'surge' areas, where supply and demand are not in harmony, a multiplier is applied to fares resulting in a charge above the standard level.
19. Strictly speaking, the figure stipulated by Uber is a recommended fare only and it is open to drivers to agree lesser (but not greater) sums with passengers. But this practice is not encouraged and if a lower fare is agreed by the driver, UBV remains entitled to its 'Service Fee' (see below) calculated on the basis of the recommended amount.
20. The passenger pays the fare in full to UBV, by credit or debit card, and receives a receipt by email. Separately, UBV generates paperwork which has the appearance of being an invoice addressed to the passenger by the driver. The 'invoice' document does not show the full name or contact details of the passenger, just his or her first name. Nor is it sent to the passenger. He or she would no doubt be vexed to receive it, having already paid the fare in full to Uber and received a receipt. The relevant driver has access to it electronically through the App. It serves as a record of the trip undertaken and the fare charged, but
24. Where a passenger cancels a trip more than five minutes after it has been accepted by a driver a £5 cancellation fee is payable. That fee is deemed a fare and accordingly UBV takes its customary percentage."
The Rider Terms
"28. Passengers logging on to the App are required to signal their acceptance of Uber's terms. The UK 'Rider Terms', updated on 16 June 2016, were shown to us. We assume that the document which they replaced was similar. Part 1 is entitled "Booking Services Terms". Para 3 includes this:
Uber UK accepts PHV Bookings acting as disclosed agent for the Transportation Provider (as principal). Such acceptance by Uber UK as agent for the Transportation Provider gives rise to a contract for the provision to you of transportation services between you and the Transportation Provider (the "Transportation Contract"). For the avoidance of doubt: Uber UK does not itself provide transportation services and is not a Transportation Provider. Uber UK acts as intermediary between you and the Transportation Provider. You acknowledge and agree that the provision to you of transportation services by the Transportation Provider is pursuant to the Transportation Contract and that Uber UK accepts your booking as agent for the Transportation Provider, but is not a party to that contract.
Para 4 lists the "Booking Services" provided to the passenger by ULL (strictly as agent for the "Transportation Provider") as follows:
1. The acceptance of PHV Bookings in accordance with paragraph 3 above, but without prejudice to Uber UK's rights at its sole and absolute discretion to decline any PHV Booking you seek to make;
2. Allocating each accepted PHV Booking to a Transportation Provider via such means as Uber UK may choose;
3. Keeping a record of each accepted PHV Booking;
4. Remotely monitoring ... the performance of the PHV Booking by the Transportation Provider;
5. Receipt of and dealing with feedback, questions and complaints relating to PHV Bookings ... You are encouraged to provide your feedback if any of the transportation services provided by the Transportation Provider do not conform to your expectations; and
6. Managing any lost property queries relating to PHV Bookings.
Para 5 is entitled "Payment". It states:
The Booking Services are provided by Uber UK to you free of charge. Uber UK reserves the right to introduce a fee for the provision of the Booking Services. If Uber UK decides to introduce such a fee, it will inform you accordingly and allow you to either continue or terminate your access to the Booking Services through the Uber App at your option.
Under the rubric "Applicable Law", para 7 reads:
The Booking Services and the Booking Service Terms set out in this Part 1, and all non-contractual obligations arising in any way whatsoever out of or in connection with the Booking Service Terms shall be governed by, construed and take effect in accordance with the laws of England and Wales.
Any dispute, claim or matter of difference arising out of or relating to the Booking Services or Booking Service Terms is subject to the exclusive jurisdiction of the courts of England and Wales.
29. Part 2 of the Rider Terms sets out detailed provisions purporting to govern the conditions on which the passenger is given access to the App. They avowedly characterise a contractual relationship between the passenger and UBV and are declared to be exclusively governed by the laws of the Netherlands. Para 2 includes these passages:
The Services constitute a technology platform that enables users ... to pre-book and schedule transportation, logistics, delivery and/or vendors services with independent third-party providers ... (including Transportation Providers as defined in Part 1) ... YOU ACKNOWLEDGE THAT UBER [defined as Uber BV, see below] DOES NOT PROVIDE TRANSPORTATION, LOGISTICS, DELIVERY OR VENDORS SERVICES OR FUNCTION AS A TRANSPORTATION PROVIDER OR CARRIER AND THAT ALL SUCH TRANSPORTATION, LOGISTICS, DELIVERY AND VENDORS SERVICES ARE PROVIDED BY INDEPENDENT THIRD PARTY CONTRACTORS WHO ARE NOT EMPLOYED BY UBER OR ANY OF ITS AFFILIATES.
30. Para 4, entitled "Payment", includes the following:
You understand that use of the Services may result in charges to you for the services or goods you receive from a Third Party Provider ("Charges"). After you have received services or goods obtained through your use of the Services, Uber will facilitate your payment of the applicable Charges on behalf of the Third Party Provider as disclosed collection agent for the Third Party Provider (as Principal) ...
As between you and Uber, Uber reserves the right to establish, remove and/or revise Charges for any or all services or goods obtained through the use of the Services at any time in Uber's sole discretion ...
This payment structure is intended to fully compensate the Third Party Provider for the services or goods provided. Except [not applicable], Uber does not designate any portion of your payment as a tip or gratuity to the Third Party Provider. Any representation by Uber ... to the effect that tipping is "voluntary," "not required," and/or "included" in the payments you make for services ... is not intended to suggest that Uber provides any additional amounts, beyond those described above, to the Third Party Provider.
31. Para 5 contains a lengthy disclaimer in respect of the use of the "Services" and an even longer clause purporting to exclude or limit UBV's liability for any loss or damage suffered by the passenger as a result of his or her use of the "Services"."
Terms between Uber and the driver
The 2013 Partner Terms
"32. The terms purporting to govern the relationships between Uber and the drivers were initially contained in a document dated 1 July 2013, entitled 'Partner Terms". It begins with, among others, these definitions:
"Customer" means a person who has signed up and is registered with Uber for the use of the App and or the Service.
"Driver" means the person who is an employee or business partner of, or otherwise retained by the Partner and who shall render the Driving Service of whom the relevant ... details are provided to Uber.
"Driving Service" means the driving transportation service as provided, made available or rendered ... by the Partner (through the Driver (as applicable) with the Vehicle) upon request of the Customer.
"Partner- means the party having sole responsibility for the Driving Service ...
"Service" means the on-demand, intermediary service through the App ... by or on behalf of Uber.
"Uber" means Uber B.V.
"Vehicle" means any motorized vehicle ... that is in safe and cleanly condition and fit for passenger transportation as required by applicable laws and regulations and that has been approved by Uber for the provision of the Driving Service.
33. Under "Scope", para 2.1.1 declares:
The Partner acknowledges and agrees that Uber does not provide any transportation services and that Uber is not a transportation or passenger carrier. Uber offers information and a tool to connect Customers seeking Driving Services to Drivers who can provide the Driving Service, and it does not and does not intend to provide transportation or act in any way as a transportation or passenger carrier. Uber has no responsibility or liability for any driving or transportation services provided by the Partner or the Drivers ... The Partner and/or the Drivers will be solely responsible for any and all liability which results or is alleged to be as a result of the operation of the Vehicle(s) and/or the driving or transportation service ... Partner agrees to indemnify, defend and hold Uber harmless from any (potential) claims or (potential) damages incurred by any third party. including the Customer or the Driver, raised on account of the provision of the Driving Service. By providing the Driving Service to the Customer, the Partner accepts. agrees and acknowledges that a direct legal relationship is created and assumed solely between the Partner and the Customer. Uber shall not be responsible or liable for the actions, omissions and behaviour of the Customer or in relation to the Partner, the Driver and the Vehicle. The Drivers are solely responsible for taking reasonable and appropriate precautions in relation to any third party with which they interact in connection with the Driving Service. Where this allocation of the Parties' mutual responsibilities may be ineffective under applicable law, the Partner undertakes to indemnify, defend and hold Uber harmless from and against any claims that may be brought against Uber in relation to the Partner's provision of the Driving Service under such applicable law.
Para 2.2.1 includes:
Notwithstanding the Partner's right, if applicable, to take recourse against the Driver, the Partner acknowledges and agrees that he is at all times responsible and liable for the acts and omissions of the Driver(s) vis-a-vis the Customer and Uber, even where such vicarious liability may not be mandated under applicable law. ... The Partner acknowledges and agrees that he will retain and, where necessary exercise, sole control over the Driver and comply with all applicable laws and regulations ... governing or otherwise applicable to his relationship with the Driver. Uber does not and does not intend to exercise any control over the driver - except as provided under the [Partner] Agreement and nothing in the [Partner] Agreement shall create an employment relationship between Uber and the Partner and/or the Driver or create either of them an agent of Uber. ... Where, by implication of mandatory law or otherwise, the Driver and/or the Partner may be deemed an agent, employee or representative of Uber, the Partner undertakes and agrees to indemnify, defend and hold Uber harmless from and against any claims by any person or entity based on such implied employment or agency relationship.
34. It is common ground that the vast majority of Uber drivers were and are sole operators such as Mr Aslam and Mr Farrar. Nonetheless, for the purposes of the Partner Terms, they provided "Driving Services" through their "Drivers" (ie in the ordinary case, themselves) to the "Customers".
35. A number of other features of the Partner Terms are worthy of note. By para 4.3.4 Partners were required to "support Uber in all communications", actively engage other Partners or Drivers if requested to do so and refrain from speaking negatively about Uber's business and business concept in public. Several provisions in para 9 imposed mutual duties of confidentiality. Deemed representations of Partners and Drivers under para 6 went well beyond the scope of standard regulatory requirements (concerning, for example, qualifications and fitness to perform driving duties). By para 6.1.1 the Partner represented (inter alia):
(vii) the Driver and the Vehicle comply at all times with the quality standards set by Uber
Para 9.4 required the Partner and Driver to agree to constant monitoring by Uber and to Uber's retention of data so generated. Uber reserved wide powers to amend the Partner Terms unilaterally (see paras 1.1.2 and 5.3). By para 8.1, the Agreement was declared to terminate automatically,
... when the Partner and/or its drivers no longer qualifies, under the applicable law or the quality standards of Uber, to provide the Driving Service or to operate the Vehicle.
And by para 8.2(a) either party was entitled to terminate without notice in any case of a material breach of the Agreement, which might take the form of:
... (e.g. breach of representations ... or receipt of a significant number of Customer complaints) ...
The Partner Terms made provision for Uber to recover fares on behalf of Drivers and deduct 'Commission', calculated as a percentage of the fare in each case (para 5.2). The Agreement was declared to be governed by the law of the Netherlands and, unless otherwise resolved, any dispute was to be referred to arbitration under the International Chamber of Commerce Arbitration Rules (para 11)."
The 2015 New Terms
"36. In October 2015, Uber issued revised terms ('the New Terms') to drivers. They were not the subject of any consultation or discussion. They were simply communicated to drivers via the App and the drivers had to accept them before going online and becoming eligible for further driving work.
37. The New Terms are contained in a document which begins:
This Services Agreement between an independent company in the business of providing Transportation Services ... ("Customer') and Uber BV…
Uber provides the Uber Services (as defined below) for the purpose of providing lead generation to Transportation Services providers.
Customer acknowledges and agrees that Uber is a technology services provider that does not provide Transportation Services, function as a transportation carrier or agent for the transportation of passengers (sic).
Although the terminology has undergone a striking transformation (in addition to the 'Partner' losing his or her definite article and becoming 'Customer', the 'Customer' has become the 'User', and 'Commission' has become 'Service Fee'), much of the substance of the Partner Terms is reproduced in the New Terms (albeit in modified language), including the key provisions which we have quoted above. But there are some entirely new stipulations. A few examples will suffice. In para 2.4, it is declared that:
Uber and its Affiliates ... (i.e. ULL) do not, and shall not be deemed to, "direct or control Customer or its Drivers generally or in their performance under this Agreement specifically including in connection with the operation of Customer's business, the provision of Transportation Services, the acts or omissions of Drivers, or the operation and maintenance of any Vehicles.
In the same para the right of "Customer and its Drivers" to cancel an accepted trip is declared to be:
... subject to Uber's then-current cancellation policies.
Para 2.5 is entitled "Customer's relationship with Drivers". Apparently in order to defeat any challenge based on privity and no doubt for other reasons, it includes this:
Customer acknowledges and agrees that it is at all times responsible and liable for the acts and omissions of its Drivers vis-à-vis Users and Uber, even where such liability may not be mandated under applicable law. Customer shall require each Driver to enter into a Driver Addendum (as may be updated from time to time) and shall provide a copy of each executed Driver Addendum to Uber. Customer acknowledges and agrees that Uber is a third party beneficiary to each Driver Addendum, and that, upon a Driver's execution of the Driver Addendum (electronically or otherwise), Uber will have the irrevocable right (and will be deemed to have accepted the right unless it is rejected promptly after receipt of a copy of the executed Driver Addendum) to enforce the Driver Addendum against the Driver as a third party beneficiary thereof.
Para 2.6 is concerned with ratings. Para 2.6.2 includes:
Customer acknowledges that Uber desires that Users have access to high-quality services via Uber's mobile application. In order to continue to receive access to the Driver App and the Uber Services, each Driver must maintain an average rating by Users that exceeds the minimum average acceptable rating established by Uber for the Territory, as may be updated from time to time by Uber in its sole discretion ("Minimum Average Rating"). In the event a Driver's average rating falls below the Minimum Average Rating, Uber will notify Customer and may provide the Driver in Uber's discretion, a limited period of time to raise his or her average rating ... if such Driver does not increase his or her average rating above the Minimum Average Rating within the time period allowed (if any), Uber reserves the right to deactivate such Driver's access to the Driver App and the Uber Services. Additionally, Customer acknowledges and agrees that repeated failure by a Driver to accommodate User requests for Transportation Services while such Driver is logged in to the Driver App creates a negative experience for Users of Uber's mobile application. Accordingly, Customer agrees and shall ensure that if a Driver does not wish to provide Transportation Services for a period of time, such Driver will log off of (sic) the Driver App.
38. The Driver Addendum begins thus:
"This Driver Addendum Services Agreement ("Addendum") constitutes a legal agreement between an Independent company in the business of providing Transportation Services (as defined below) ("Transportation Company") and an independent, for-hire transportation provider ("Driver").
Driver currently maintains a contractual or employment arrangement with Transportation Company to perform passenger carriage services for Transportation Company.
Transportation Company and Uber B.V. ("Uber") have separately entered into a Services Agreement ("Agreement") in order for Transportation Company to access the Uber Services ...
In addition to the Transportation Services It (sic) regularly performs pursuant to his or her contractual arrangements with Transportation Company, Driver is interested in receiving lead generation and related services through the Uber Services. Transportation Company and Driver desire to enter into this Addendum to define the terms and conditions under which Driver may receive such lead generation and related services.
In order to use the Uber Services, Driver and Transportation Company must agree to the terms and conditions that are set forth below. Upon Driver's execution (electronic or otherwise) of this Addendum, Driver and Transportation Company shall be bound by the terms and conditions set forth herein."
The document proceeds to set out terms which largely mirror those contained in the New Terms, adopting the same terminology (save that 'Customer' has become 'Transportation Company'). Clause 2.3, entitled "Driver's Relationship with Uber", includes the following passages:
Uber and Its Affiliates in the Territory do not, and shall not be deemed to, direct or control Driver generally or in Driver's performance of Transportation Services or maintenance of any Vehicles. Driver acknowledges that neither Uber nor any of its Affiliates in the Territory controls, or purports to control: (a) when or for how long Driver will utilise the Driver App for the Uber Services; or (b) Driver's decision ... to decline or ignore a User's request for Transportation Services, or to cancel an accepted request ... for Transportation Services ... subject to Uber's then-current cancellation policies. Driver may be deactivated or otherwise restricted from accessing or using the Driver App or the Uber Services in the event of a violation of this Addendum or Transportation Company's violation of the Agreement or Driver's or Transportation Company's disparagement of Uber or any of its Affiliates, or Driver's or Transportation Company's act or omission that causes harm to Uber's or any of its Affiliates' brand, reputation or business as determined by Uber in its sole discretion. Uber also retains the right to deactivate or otherwise restrict Driver from accessing or using the Driver App or the Uber Services for any other reason at the sole and reasonable discretion of Uber. Additionally, Driver acknowledges Uber's rights in the UBER family of trademarks and names, including UBER ... the UBER Logo and EVERYONE'S PRIVATE DRIVER..."
"…access to the App was and is personal to the 'Partner/Customer' and (if not the same person) the driver. The right to use the App was and is non-transferable. Drivers are not permitted to share accounts. Nor may they share their Driver IDs, which are used to log on to the App."
It was and is common ground that there is no question of any driver being replaced by a substitute.
Other findings of the ET
"Low Cancellation Rate: when you accept a trip request you have made a commitment to the rider. Cancelling often or cancelling for unwillingness to drive to your clients leads to a poor experience.
High Acceptance Rate: Going on duty means you are willing and able to accept trip requests. Rejecting too many requests leads to rider confusion about availability. You should be off duty if not able to take requests."
"51. Although a driver is nominally free to accept or decline trips as he chooses, his acceptance statistics are recorded and an Uber document shown to us warns:
You should accept at least 80% of trip requests to retain your account status.
52. Drivers who decline three trips in a row are liable to be forcibly logged off the App by Uber for 10 minutes. Ms Bertram denied that this amounted to a penalty but an Uber document called "Confirmation and Cancellation Rate Process" shows that the expression "Penalty Box warning" is current within the organisation. The third in a graduated series of standard form messages reads:
... we noticed that you may have left your partner app running whilst you were away from your vehicle, and therefore have been unable to confirm your availability to take trips. As an independent contractor you have absolute flexibility to log onto the application at any time, for whatever period you choose. However, being online with the Uber app is an indication that you are available to take trips, in accordance with your Services Agreement. From today, if you do not confirm your availability to take trips twice in a row we will take this as an indication you are unavailable and we will log you off the system for 10 minutes.
53 A similar system of warnings, culminating in the 10-minute log-off penalty, applies to cancellations by drivers after a trip has been accepted. As we have mentioned, the New Terms (and the Driver Addendum) provide that the right to cancel is subject to Uber's cancellation policy. There appears to be no document setting out the policy but the standard form warning messages state that cancellation amounts to a breach of the agreement between the driver and Uber unless there is a "good reason" for cancelling. A message from ULL to a driver dated 19 September 2014 reads:
We noticed you cancelled more than 15% of your jobs last week. Cancelling jobs you have accepted leads to highly frustrating experiences for riders, an unreliable experience and lower earnings. Only accept a job if you are prepared to pick up the user and complete that job and if you are not in a position to do work for Uber remember to log Offline at any time."
The regulatory and licensing regime
"2. (1) No person shall in London make provision for the invitation or acceptance of, or accept, private hire bookings unless he is the holder of a private hire vehicle operator licence for London (in this Act referred to as a London PHV Operator Licence).
3. (1) Any person may apply to the licensing authority for a London PHV Operator Licence.
(2) An application under this section shall state the address of any premises in London which the applicant proposes to use as an operating centre.
(3) The licensing authority shall grant a London PHV Operator Licence to the applicant if the authority is satisfied that-
(a) the applicant is a fit and proper person to hold a London PHV operator licence …..
(b) Any further requirements that may be prescribed (which may be requirements relating to operating centres) are met.
4. (1) The holder of a London PHV Operator's Licence (in this Act referred to as a "London PHV Operator") shall not in London accept a private hire booking other than at an operating centre specified in his licence.
(2) A London PHV operator shall secure that any vehicle which is provided by him for carrying out a private hire booking accepted by him in London is:
(a) a vehicle for which a London PHV Licence is in force driven by a person holding a London PHV driver's licence or;
(b) a London cab driven by a person holding a London Cab driver's licence.
5. (1) A London PHV operator (the first operator) who has in London accepted a private hire booking may not arrange for another operator to provide a vehicle to carry out that booking as sub-contractor unless;
(a) the other operator is a London PHV Operator and the subcontracted booking is accepted at an operating centre in London…….
(4) It is immaterial for the purposes of subsection (1) whether or not subcontracting is permitted by the contract between the first operator and the person who made the booking.
(5) For the avoidance of doubt (and subject to any relevant contract terms) a contract of hire between a person who made a private hire booking at an operating centre in London and a London PHV Operator who accepted the booking remains in force despite the making of arrangements by that operator to provide a vehicle to carry out that booking as sub-contractor."
"The Operator shall, if required to do so by a person making a private hire booking:
(a) agree the fare for the journey booked or,
(b) provide an estimate of that fare."
By an amendment made with effect from 27 June 2016 this was changed to read:
"Before the commencement of each journey the operator shall;-
(a) Agree the fare with the person making the private hire booking or;
(b) Provide an accurate estimate of the fare to the person making the private hire booking.
What constitutes an accurate estimate for the purposes of this condition may be specified by the licensing authority from time to time."
Value Added Tax
"3.1 The types of business this covers
This includes all businesses, whether they're a sole proprietorship, partnership or limited company, which either:
employ staff to drive taxis or private hire-cars; [or]
take on self-employed drivers to work under a contract for services.
3.2 Accounting for VAT
If you run a business of this kind, then unless you're acting as an agent for any of your drivers for some, or all, of the work they do, you're a principal in making the supply of transport to the customer. In working out the value of your supply you must include:
the full amount payable by the customer before deducting any payments made to your drivers;
any fares you (as the sole proprietor, director or partner) take if you drive for the firm;
the full fares payable by passengers even if you sub-contract work to an independent business or owner driver; and
any referral fee you get from other taxi businesses.
3.3 Agent or principal
As a taxi or private hire car business you may perform two different types of work. These are:
cash work, where individual customers pay cash to the driver on completion of the journey; and
account work, where regular customers, particularly companies and institutions, are allowed to settle their bills periodically.
………If all your drivers are employees, you're a principal and must follow paragraph 3.2 when accounting for VAT. But, if your drivers are self-employed you may, depending on the agreements you have with them, be acting as their agent for cash work and in some cases for account work as well."
Employment Rights Act 1996
"Employees, workers etc.
(1) In this Act "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.
(2) In this Act "contract of employment" means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.
(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)—
(a) a contract of employment, or
(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker's contract shall be construed accordingly.
(4) In this Act "employer", in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.
(5) In this Act "employment"—
(a) in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and
(b) in relation to a worker, means employment under his contract; and "employed" shall be construed accordingly."
"Agency workers who are not otherwise "workers"
(1) This section applies in any case where an individual (the agency worker"):–
(a) is supplied by a person "the agent" to do work for another ("the principal") under a contract or arrangements made between the agent and the principal but;
(b) is not as respects that work a worker, because of the absence of a worker's contract between the individual and the agent or the principal and;
(c) is not a party to a contract under which he undertakes to do the work for another party to the contract whose status is by virtue of the contract that of a client or customer of any professional or business undertaking carried on by the individual."
The decision of the ET
"85… We accept that the drivers (in the UK at least) are under no obligation to switch on the App. There is no prohibition against 'dormant' drivers. We further accept that, while the App is switched off, there can be no question of any contractual obligation to provide driving services. The App is the only medium through which drivers can have access to Uber driving work. There is no overarching 'umbrella' contract. All of this is self-evident and Mr Linden did not argue to the contrary.
86. But when the App is switched on, the legal analysis is, we think, different. We have reached the conclusion that any driver who (a) has the App switched on, (b) is within the territory in which he is authorised to work, and (c) is able and willing to accept assignments, is, for so long as those conditions are satisfied, working for Uber under a 'worker' contract and a contract within each of the extended definitions."
The appeal to the Employment Appeal Tribunal ("the EAT")
(1) The ET had erred in law in disregarding the written contractual documentation. There was no contract between the Claimants and ULL but there were written agreements between the drivers and UBV and riders, which were inconsistent with the existence of any worker relationship. As those agreements made clear, Uber drivers provided transportation services to riders; ULL (as was common within the mini-cab or private hire industry) provided its services to the drivers as their agent. In finding otherwise, the ET had disregarded the basic principles of agency law.
(2) The ET had further erred in relying on regulatory requirements as evidence of worker status.
(3) It had also made a number of "inconsistent" and "perverse" findings of fact in concluding that the Claimants were required to work for Uber.
(4) It had further failed to take into account relevant matters relied on by Uber as inconsistent with worker status and as, on the contrary, strongly indicating that the Claimants were carrying on a business undertaking on their own account.
"105. In the normal commercial environment (that pertaining in Secret Hotels2) the starting point will be the written contractual documentation; indeed, unless it is said to be a sham or liable to rectification, the written contract is generally also the end point - the nature of the parties' relationship and respective obligations being governed by its terms. Here, however, the ET was required to determine the nature of the relationship between ULL and the drivers for the purposes of statutory provisions in the field of employment law; provisions enacted to provide protections to those often disadvantaged in any contractual bargain. The ET's starting point was to determine the true nature of the parties' bargain, having regard to all the circumstances. That was consistent with the approach laid down in Autoclenz and was particularly apposite given there was no direct written contract between the drivers and ULL. Adopting that approach, the ET did not accept that the characterisation of the relationship between drivers and ULL in the written agreements properly reflected the reality. In particular - and crucial to its reasoning - the ET rejected the contention that Uber drivers work, in business on their own account, in a contractual relationship with the passenger every time they accept a trip…
109. Uber's case in these respects is founded on the premise that the ET's starting point should have been informed by the characterisation of the relationship between ULL and the drivers as set out in the documentation. I disagree. The ET was not bound by the label used by the parties; in the same way as the first instance tribunals in the VAT context, the ET was concerned to discover the true nature of the relationships involved. Its findings led it to conclude that the reality of the relationship between ULL and Uber drivers was not one of agent and principal; specifically, it rejected the argument that the drivers were the principals in separate contracts with passengers as and when they agreed to take a trip. It rejected that case because it found the drivers were integrated into the Uber business of providing transportation services, marketed as such (paragraphs 87 to 89), and because it found the arrangements inconsistent with the drivers acting as separate businesses on their own account, given that they were excluded from establishing a business relationship with passengers (drivers could neither obtain passengers' contact details nor provide their own), worked on the understanding that Uber would indemnify them for bad debts and were subjected to various controls by ULL …. Having found that Uber drivers did not operate businesses on their own account and, as such, enter into contracts with passengers, the ET was entitled to reject the label of agency and the characterisation of the relationship in the written documentation."
"126… The assessment of the driver's status and time in between the acceptance of individual trips will, however, be a matter of fact and degree. On the ET's findings of fact in this case, I do not consider it was wrong to hold that a driver would be a worker engaged on working time when in the territory, with the app switched on, and ready and willing to accept trips ("on-duty", to use Uber's short-hand). If the reality is that Uber's market share in London is such that its drivers are, in practical terms, unable to hold themselves out as available to any other PHV operator, then, as a matter of fact, they are working at ULL's disposal as part of the pool of drivers it requires to be available within the territory at any one time. That might indeed seem consistent with Mr Kalanick's description of the original Uber model as a "black car service". If, however, it is genuinely the case that drivers are able to also hold themselves out as at the disposal of other PHV operators when waiting for a trip, the same analysis would not apply."
The appeal to this court
"53. …a focus upon whether the purported worker actively markets his services as an independent person to the world in general (a person who will thus have a client or customer) on the one hand, or whether he is recruited by the principal to work for that principal as an integral part of the principal's operations, will in most cases demonstrate on which side of the line a given person falls."
"59... the dominant purpose test is really an attempt to identify the essential nature of the contract. Is it in essence to be located in the field of dependent work relationships, or is it in essence a contract between two independent business undertakings? ... Its purpose is to distinguish between the concept of worker and the independent contractor who is in business on his own account, even if only in a small way."
"24. First, the natural and ordinary meaning of "employed by" is employed under a contract of service. Our law draws a clear distinction between those who are so employed and those who are self-employed but enter into contracts to perform work or services for others.
25. Second, within the latter class, the law now draws a distinction between two different kinds of self-employed people. One kind are people who carry on a profession or a business undertaking on their own account and enter into contracts with clients or customers to provide work or services for them.... The other kind are self-employed people who provide their services as part of a profession or business undertaking carried on by some-one else...."
"involves consideration of whether and in what circumstances the employment tribunal may disregard terms which were included in a written agreement between the parties and instead base its decision on a finding that the documents did not reflect what was actually agreed between the parties of the true intentions or expectations of the parties".
"I would accept the submission made on behalf of the claimants that, although the case is authority for the proposition that if two parties conspire to misrepresent their true contract to a third party, the court is free to disregard the false arrangement, it is not authority for the proposition that this form of misrepresentation is the only circumstance in which the court may disregard a written term which is not part of the true agreement. That can be seen in the context of landlord and tenant from Street v Mountford  AC 809 and Antoniades v Villiers  1 AC 417, especially per Lord Bridge at p 454, Lord Ackner at p 466, Lord Oliver at p 467 and Lord Jauncey at p 477. See also in the housing context Bankway Properties Ltd v Pensfold-Dunsford  1 WLR 1369 per Arden LJ at paras 42 to 44.
24. Those cases were examples of the courts concluding that relevant contractual provisions were not effective to avoid a particular statutory result. The same approach underlay the reasoning of Elias J in Kalwak in the EAT, where the questions were essentially the same as in the instant case. One of the questions was whether the terms of the written agreement relating to the right to refuse to work or to work for someone else were a sham."
"57. The concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses, or clauses denying any obligation to accept or provide work in employment contracts, as a matter of form, even where such terms do not begin to reflect the real relationship….
58. In other words, if the reality of the situation is that no one seriously expects that a worker will seek to provide a substitute, or refuse the work offered, the fact that the contract expressly provides for these unrealistic possibilities will not alter the true nature of the relationship. But if these clauses genuinely reflect what might realistically be expected to occur, the fact that the rights conferred have not in fact been exercised will not render the right meaningless.
59. … Tribunals should take a sensible and robust view of these matters in order to prevent form undermining substance…"
"34. The critical difference between this type of case and the ordinary commercial dispute is identified by Aikens LJ in para 92 [of the judgment under appeal] as follows:
"I respectfully agree with the view, emphasised by both Smith and Sedley LJJ, that the circumstances in which contracts relating to work or services are concluded are often very different from those in which commercial contracts between parties of equal bargaining power are agreed. I accept that, frequently, organisations which are offering work or requiring services to be provided by individuals are in a position to dictate the written terms which the other party has to accept. In practice, in this area of the law, it may be more common for a court or tribunal to have to investigate allegations that the written contract does not represent the actual terms agreed and the court or tribunal must be realistic and worldly wise when it does so."
35. So the relative bargaining power of the parties must be taken into account in deciding whether the terms of any written agreement in truth represent what was agreed and the true agreement will often have to be gleaned from all the circumstances of the case, of which the written agreement is only a part. This may be described as a purposive approach to the problem. If so, I am content with that description.
36. With characteristic clarity and brevity Sedley LJ described the factual position as follows:
"104. Employment judges have a good knowledge of the world of work and a sense, derived from experience, of what is real there and what is window-dressing. The conclusion that Autoclenz's valeters were employees in all but name was a perfectly tenable one on the evidence which the judge had before him. The elaborate protestations in the contractual documents that the men were self-employed were odd in themselves and, when examined, bore no practical relation to the reality of the relationship.
105. The contracts began by spelling out that each worker was required to 'perform the services which he agrees to carry out for Autoclenz within a reasonable time and in a good and workmanlike manner' - an obligation entirely consistent with employment. Notwithstanding the repeated interpolation of the word 'sub-contractor' and the introduction of terms inconsistent with employment which, as the judge found, were unreal, there was ample evidence on which the judge could find, as he did, that this was in truth an employment relationship.
106. His finding did not seek to recast the contracts: it was a finding on the prior question of what the contracts were. Rightly, it was uninfluenced by the fiscal and other consequences of the relationship, which were by no means all one way."
"31. Where parties have entered into a written agreement which appears on its face to be intended to govern the relationship between them, then, in order to determine the legal and commercial nature of that relationship, it is necessary to interpret the agreement in order to identify the parties' respective rights and obligations, unless it is established that it constitutes a sham.
32. When interpreting an agreement, the court must have regard to the words used, to the provisions of the agreement as whole, to the surrounding circumstances in so far as they were known to both parties, and to commercial common sense. When deciding on the categorisation of a relationship governed by a written agreement, the label or labels which the parties have used to describe their relationship cannot be conclusive, and may often be of little weight. As Lewison J said in A1 Lofts Ltd v Revenue and Customs Commissioners  STC 214, para 40, in a passage cited by Morgan J:
"The court is often called upon to decide whether a written contract falls within a particular legal description. In so doing the court will identify the rights and obligations of the parties as a matter of construction of the written agreement; but it will then go on to consider whether those obligations fall within the relevant legal description. Thus the question may be whether those rights and obligations are properly characterised as a licence or tenancy (as in Street v Mountford  AC 809); or as a fixed or floating charge (as in Agnew v IRC  2 AC 710), or as a consumer hire agreement (as in TRM Copy Centres (UK) Ltd v Lanwall Services Ltd  1 WLR 1375). In all these cases the starting point is to identify the legal rights and obligations of the parties as a matter of contract before going on to classify them."
33. In English law it is not permissible to take into account the subsequent behaviour or statements of the parties as an aid to interpreting their written agreement – see FL Schuler AG v Wickman Machine Tool Sales Ltd  AC 235. The subsequent behaviour or statements of the parties can, however, be relevant, for a number of other reasons. First, they may be invoked to support the contention that the written agreement was a sham – ie that it was not in fact intended to govern the parties' relationship at all. Secondly, they may be invoked in support of a claim for rectification of the written agreement. Thirdly, they may be relied on to support a claim that the written agreement was subsequently varied, or rescinded and replaced by a subsequent contract (agreed by words or conduct). Fourthly, they may be relied on to establish that the written agreement represented only part of the totality of the parties' contractual relationship.
35. This is a slightly more sophisticated analysis than the single issue as it has been agreed between the parties, as set out in para 16 above, but, as will become apparent, at least in the circumstances of this case, it amounts to the same thing. In order to decide whether the FTT was entitled to reach the conclusion that it did, one must identify the nature of the relationship between Med, the hotelier, and the customer, and, in order to do that, one must first consider the effect of the contractual documentation, and then see whether any conclusion is vitiated by the facts relied on by either party."
"21… Mr Mingeley's only contractual obligation to Amber Cars was to pay the £75 weekly fee for access to Amber Cars' computer system. He does nothing else contractually for Amber Cars and therefore, on the plain meaning of the words, his contract with them cannot be a contract personally to execute any work or labour."
Like Judge Richardson in the recent case of Addison Lee (see below), we consider that the critical finding in Mingeley was the absence of any requirement for the driver to accept a fare offered to him by the system: which, given the terms of the statutory test then in issue, was decisive. We did not find this case of assistance in determining whether, on the different and more complex facts in the present case, the Claimants are providing services to ULL so as to be "workers" within limb (b) of section 230(3).
"5.1 Subject to Clause 5.4, you choose the days and times when you wish to offer to provide the Services in accordance with the terms of the Driver Scheme but unless we are informed otherwise, you agree that if you are in possession of and logged into an Addison Lee XDA you shall be deemed to be available and willing to provide Services.
5.2. For the avoidance of doubt, there is no obligation on you to provide the Services to Addison Lee or to any Customer at any time or for any minimum number of hours per day/ week/month. Similarly, there is no obligation on Addison Lee to provide you with a minimum amount of, or any, work at all.
5.3. You agree to perform promptly each Customer Contract in accordance with its terms and to indemnify us against any claims from Customers for your breach of the Customer Contract which are directed against us as a result either of having acted as your agent in concluding the Customer Contract or as principal where you have fulfilled the Customer Contract as a sub-contractor on our behalf.
5.4. By ticking the appropriate box at the start of this Driver Contract you select which of the "Anytime Circuit", the "Night Circuit", or the "Weekend Circuit" you wish to participate in.
5.4.1. As a Driver on the Anytime Circuit, you are indicating that, subject to Clause 5.2, you may be available to provide the Services whenever you wish under this Driver Contract at any time.
5.4.2. As a Driver on the Night Circuit, you are indicating that, subject to Clause 5.2, you may be available to provide the Services whenever you wish from 1700hrs each day until 0500hrs the following day.
5.4.3. As a Driver on the Weekend Circuit, you are indicating that, subject to Clause 5.2, you may be available to provide the Services whenever you wish from 1730hrs each Friday to 1730hrs the following Sunday."
"58… In our judgment the ET was entitled to hold that drivers accepted an obligation to undertake driving jobs allocated to them notwithstanding the apparently general terms of Clause 5.2. Indeed, we see very little point in Clause 5.1, which deems a driver to be available when logged on, if Clause 5.2 really permitted a driver to make himself unavailable should he be allocated a job which did not suit him."
"50…….The club did not employ the dancer to dance; rather she paid them to be provided with an opportunity to earn money by dancing for the clients. The fact that the appellant also derived profits from selling food and drink to the clients does not alter that fact. That is not to say that Cheng provides a complete analogy; I accept Mr Hendy's submission that the relationship of the claimant to the club is more integrated than [that of] the caddie with the golf club. It is not simply a licence to work on the premises. But in its essence the tripartite relationship is similar.
51. The fact that the dancer took the economic risk is also a very powerful pointer against the contract being a contract of employment. Indeed, it is the basis of the economic reality test, described above. It is not necessary to go so far as to accept the submission of Mr Linden that absent an obligation on the employer to pay a wage ... the relationship can never as a matter of law constitute a contract of employment. But it would, I think, be an unusual case where a contract of service is found to exist when the worker takes the economic risk and is paid exclusively by third parties. On any view, the Tribunal was entitled to find that the lack of any obligation to pay did preclude the establishment of such a contract here."
The legal test to be applied
The argument that the facts are consistent with Uber's case
The driver does not know at that point a fundamental fact, namely the passenger's destination, as, according to the ET, he only obtains that information either directly from the passenger or via the App at the moment of pick up.
The significance of the regulatory regime
The artificiality of the contractual documents
a) ULL, despite being the PHV operator in London, and therefore the only entity legally permitted to operate the business, is scarcely mentioned at all, even as an "Affiliate" of UBV;
b) The agreement refers to the party with whom UBV is contracting as the "Partner" (2013) or "Customer" (2015), as if it were a separate legal entity employing one or more drivers. Indeed, in the 2015 version, the "Customer" is described as "an independent company in the business of providing transportation services". But, as the ET noted (para 34) and Ms Rose accepted in this court, it is common ground that the vast majority of drivers are sole operators; in the words of the ET at para 80, the "business" consists of a man with a car who seeks to make a living from driving it.
c) We agree with the submission of Mr Linden QC, for some of the Claimants, that:-
"The documents required the drivers to agree to numerous facts and legal propositions about the position of others, such as the relationships between the customer and Uber and/or the driver, rather than being confined, as one would expect, to the mutual obligations of the parties to the agreement. This unusual feature was the hallmark of an attempt to describe the set up as Uber wished to portray it and then bind the driver to that description, whereas the function of a contract is actually to set out obligations and then only the obligations of the party to the contract. Moreover, the drivers could not be bound by facts or legal propositions of which they were unaware and/or which were false."
Uber's public statements
"67. In her evidence Ms Bertram chose her words with the utmost care. But in publicity material and correspondence those speaking in Uber's name have frequently expressed themselves in language which appears incompatible with their central case before us. Some illustrations are to be found above. A few further instances will suffice. We were taken to, among many other examples, references to "Uber drivers" and "our drivers", to "Ubers" (i.e. Uber vehicles), to "Uber [having] more and more passengers". One Twitter feed issued under the name of Uber UK reads:
"Everyone's Private Driver. Braving British weather to bring a reliable ride to your doorstep at the touch of a button."
And in a response of 19 June 2015 to a TfL consultation ULL wrote:
"The fact that an Uber partner-driver only receives the destination for a trip fare when the passenger is in the car is a safeguard that ensures that we can provide a reliable service to everyone at all times, whatever their planned journey."
"Every single person that gets into an Uber knows that our responsibility to him doesn't end when they get out of the car."
68. Ms Bertram told us that Uber provides the drivers with "business opportunities", but strenuously denied that they had jobs with the organisation. However, in a submission to the GLA Transport Scrutiny Committee ULL boasted of "providing job opportunities" to people who had not considered driving work and potentially generating "tens of thousands of jobs in the UK."
69. On the subject of payment of drivers, we have referred above to the Partner Terms and New Terms, which provide for Uber to collect fares on behalf of drivers and deduct their 'Commission' or 'Service Fee'. But in its written evidence dated 3 October 2014 to the GLA Transport Scrutiny Committee, Ms Bertram on behalf of ULL stated:
"Uber drivers are commission-based ... Drivers are paid a commission of 80% for every journey they undertake."
This statement neatly encapsulates the Claimants' case that they are workers providing their services to ULL as employer. It is wholly at odds with Uber's case. The ET records at the end of paragraph 69 that Ms Bertram attempted before them to dismiss it as a typographical error. The ET's observation that this attempt was made by the witness "to our considerable surprise" is notably restrained.
The ET's finding that the drivers were working for Uber
(1) The contradiction in the Rider Terms between the fact that ULL purports to be the driver's agent and its assertion of "sole and absolute discretion" to accept or decline bookings. Ms Rose criticised this on the grounds that it was necessary because under the regime of the PHVA 1998 only ULL can accept or decline bookings. In our view, the fact that this is a statutory requirement does not invalidate its significance: if anything it reinforces it.
(2) The fact that Uber interviews and recruits drivers. We agree with the ET that this is significant.
(3) The fact that Uber controls the key information (in particular the passenger's surname, contact details and intended destination) and excludes the driver from it. Ms Rose argued that these were important and desirable measures in the interests of passenger safety. We agree that they are: but, as with the statutory requirement that only ULL may accept or decline bookings, this does not detract from the significance of what is stated.
(4) The fact that Uber requires drivers to accept trips and/or not to cancel trips, and enforces the requirement by logging off drivers who breach those requirements. We agree that this is significant as showing a high degree of control.
(5) The fact that Uber sets the (default) route and the driver departs from it at his peril. This is not as stringent an element of control as some others because the driver may depart from the route prescribed by the App and the peril is only financial: nevertheless, it does have some significance.
(6) The fact that UBV fixes the fare and the driver cannot agree a higher sum with the passenger. (The supposed freedom to agree a lower fare is obviously nugatory). Ms Rose submits that this also is a regulatory requirement; again, in our view, that fact does not detract from its significance in supporting the ET's conclusion that Uber runs a transportation business and the drivers provide the skilled labour through which its services are provided.
(7) The fact that Uber imposes numerous conditions on drivers (such as the limited choice of acceptable vehicles) instructs drivers on how to do their work, and in numerous ways, controls them in the performance of their duties. Ms Rose submitted that these conditions are standard in the taxi and minicab industry. No doubt they are, but again they support the ET's findings that the drivers are working for Uber, not the other way around.
(8) The fact that Uber subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure. This is a powerful point supporting the case that the drivers work for Uber.
(9) The fact that Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected. This is another similar point, though somewhat less powerful than the last one.
(10) The guaranteed earning schemes (albeit now discontinued). As the words in parenthesis indicate, these had ceased by the time the case came before the ET. We did not hear argument from either side on whether this was in reality a significant point.
(11) The fact that Uber accepts the risk of loss which, if the drivers were genuinely in business on their own account, would fall upon them. The ET may have overstated this point in summarising it. As their findings at paragraph 26 made clear, Uber's general practice is to accept the loss in cases where the passenger has procured the ride by fraud, at least where, as Ms Bertram put it, Uber's systems have failed. On those findings this does not seem to us a point of real significance in the Claimants' favour.
(12) The fact that Uber handles complaints by passengers, including complaints about the driver. This is another regulatory requirement, but again it supports the Claimants' case and the ET's conclusion.
(13) The fact that Uber reserves the power to amend the driver's terms unilaterally. We agree that this supports the ET's conclusion.
Were the drivers providing services to UBV rather than ULL?
"UBV is a Dutch company the central functions of which are to exercise and protect legal rights associated with the App and process passengers' payments. It does not have day-to-day or week-to-week contact with the drivers. There is simply no reason to characterise it as their employer. We accept its first case, that it does not employ drivers. ULL is the obvious candidate. It is a UK company. Despite protestations to the contrary in the Partner Terms and New Terms, it self-evidently exists to run, and does run, a PHV operation in London. It is the point of contact between Uber and the drivers. It recruits, instructs, controls, disciplines and, where it sees fit, dismisses drivers. It determines disputes affecting their interests."
When are the drivers workers?
"We have already stated our view that a driver is 'working' under a limb (b) contract when he has the App switched on, is in the territory in which he is licensed to use the App, and is ready and willing to accept trips. Mr Reade submitted that, even if there is a limb (b) contract between the driver and Uber, he is not 'working' under it unless and until he is performing the function for which (on this hypothesis) the contract exists, namely carrying a passenger. We do not accept that submission because, in our view, it confuses the service which the passenger desires with the work which Uber requires of its drivers in order to deliver that service. It is essential to Uber's business to maintain a pool of drivers who can be called upon as and when a demand for driving services arises. The excellent 'rider experience' which the organisation seeks to provide depends on its ability to get drivers to passengers as quickly as possible. To be confident of satisfying demand, it must, at any one time, have some of its drivers carrying passengers and some waiting for the opportunity to do so. Being available is an essential part of the service which the driver renders to Uber. If we may borrow another well known literary line:
"They also serve who only stand and wait""
"If the reality is that Uber's market share in London is such that its drivers are, in practical terms, unable to hold themselves out as available to any other PHV operator, then, as a matter of fact, they are working at ULL's disposal as part of the pool of drivers it requires to be available within the Territory at any one time. If, however, it is genuinely the case that drivers are able to also hold themselves out as at the disposal of other PHV operators when waiting for a trip, the same analysis would not apply."
Final general observation
Lord Justice Underhill:
THE MAIN ISSUE
THE WRITTEN AGREEMENTS
"Customer acknowledges and agrees that Customer's provision of transportation services to Users creates a legal and direct business relationship between Customer and the User, to which neither Uber nor any of its Affiliates in the territory is a party."
Para. 2.1.1 of the Partner Terms begins:
"Partner acknowledges and agrees that Uber does not provide any transportation services, and that Uber is not a transportation or passenger carrier. Uber offers information and a tool to connect Customers seeking Driving Services to Drivers who can provide the Driving Service, and it does not and does not intend to provide transportation or act in any way as a transportation or passenger carrier."
"Driving Service" is defined as "the driving transportation service … rendered by the Partner (through the Driver …) upon request of the Customer".
"It follows that, applying the principles identified above, the Court of Appeal was correct to hold that those were the true terms of the contract and that the ET was entitled to disregard the terms of the written documents, in so far as they were inconsistent with them."
(1) It is open to an employment tribunal to disregard any terms of a written agreement between an employer and an employee (but also, it is clear, a worker) which are inconsistent with the true agreement between the parties. Such an agreement may be described as a "sham", but it does not have to be a sham in the particular sense defined by Diplock LJ in Snook v London and West Riding Investments Ltd  2 QB 786.
(2) What the true agreement is may be gleaned from all the circumstances of the case, of which the written agreement is part but only a part.
(3) In ascertaining whether the written agreement does in fact represent the true agreement the relative bargaining power of the parties will be a relevant consideration, because employers will typically be in a position to dictate the terms of the paperwork to which an employee must sign up, including terms that do not reflect the true agreement. Tribunals should accordingly take a realistic and worldly-wise approach to deciding whether that is the case.
THE BACKGROUND LAW ABOUT TAXI AND MINICAB DRIVERS
(1) The operator advertises minicab services to the public under its own name, typically in directories or online and by distribution of flyers and business cards.
(2) The operator does not have a fleet of vehicles owned by it, or drivers employed by it, but instead has relationships with a number of individual drivers who own their own vehicles and have the appropriate private hire licences and insurance.
(3) Customers obtain the services of a driver by phoning the operator, who contacts the nearest available driver by radio or telephone and offers them the job and, if they accept, gives them details of the passenger. (Latterly this element may have been to a greater or lesser extent computerised, so that customers can make bookings with the operator online and/or the operator may use software to allocate jobs efficiently.) Drivers are free whether to make themselves available to work and whether to accept particular jobs.
(4) Fares are set by the operator (possibly, but not necessarily, in accordance with a regulatory requirement), who may also impose other conditions such as the use of uniforms, quality of vehicles to be used etc.
(5) As regards payment, the procedure differs between cash and account customers. Cash customers pay the driver themselves at the end of the journey, whether by cash or card. In the case of account customers the driver notifies the amount of the fare to the operator, who debits the account accordingly and pays the driver within a specified period.
(6) The operator either charges the driver a set fee or takes a commission.
I am not to be taken as saying that this is the only possible model, simply that the cases show that it is one which is commonly adopted.
- the operator was as a private hire service (based in Leeds) with a fleet of over 200 drivers operating under a trading name (Amber Cars);
- the driver owned his own car and had his own licence from the Council;
- he paid a flat weekly fee for access to what is described by Maurice Kay LJ as "initially a radio and later a computer system which … allocated calls to drivers from [the operator's] customers";
- he was under no obligation to work or even to notify Amber Cars of his ability to work;
- there was a fixed scale of charges;
- the driver was obliged to wear a uniform; and
- Amber Cars had a procedure for dealing with complaints from passengers about the conduct of its drivers.
Maurice Kay LJ described this as "a type of arrangement commonly found in the private hire industry".
"Whether you're acting as an agent depends on the terms of any written or oral contract between you and the drivers, and the actual working practices of your business. For further information on how to decide whether you're acting as an agent or a principal see the section dealing with agents in VAT guide (Notice 700). Typically in acting as an agent for your drivers you'll:
- relay bookings to the drivers (usually on a rota basis) for an agreed fee;
- collect fares on their behalf from account customers.
You could also provide them with other services such as the hire of cars or radios."
THE REASONING OF THE ET
(1) "The lady doth protest too much". At para. 87 the Tribunal says that the very fact that Uber goes to such trouble to specify in its contractual paperwork the nature of the relationships created is cause for scepticism about whether the picture there painted is accurate. I do not accept that. There is nothing suspicious as such about Uber wanting to have full and careful paperwork setting out the terms of the relationships into which it enters: any prudent business of any size, would, or at least should, do the same. It would of course be different if the paperwork does not reflect what the parties otherwise understood or agreed; but that begs the very question that has to be answered in this case.
(2) Idiosyncratic language. Also at para. 87 the Tribunal refers to the Agreement as resorting to "fictions, twisted language and … brand new terminology". It gives examples in its footnotes, which do indeed show some egregiously ugly pieces of corporate-speak, tendentious definitions and lawyerisms. But, again, the question is whether these various offences against good English actually conceal a different reality.
(3) "Transportation services". The Tribunal attaches importance to the fact that Uber has from time to time described itself as providing "transportation services": see paras. 88 and 93. I do not see that this has much significance, since it all depends what you mean by that term. In one sense Uber obviously provides transportation services. But the question is whether it does so by providing the services of the drivers itself or by providing a service for booking (and paying for) them. The same applies to the Tribunal's reliance (para. 88) on the fact that Uber markets its "product range" in its own name: the question is what the products in question consist of. The fact that the service is branded "Uber" does not seem to me determinative: Checkers Cars and Amber Cars (see paras. 125 and 127 above) likewise advertised themselves in their own names, but that did not prevent Langstaff J and Buxton LJ from regarding them as intermediaries who did not contract directly with the passenger. The Tribunal quotes the decision of the California District Court in O'Connor that "Uber does not simply sell software; it sells rides"; but that is, as far as it goes, an unanalysed assertion. If I may say so, much of the debate in the ET seems to have been side-tracked into considering (and cross-examining Uber's hapless witness on) words and labels rather than analysing the nature of the actual obligations.
(4) Uber's references to its drivers. At para. 88 the Tribunal refers to Uber having acknowledged that it employs drivers for the purpose of the transportation services which it supplies. That is cross-referenced to paras. 67-69 (set out by my Lords at para. 94 of their judgment), but the examples there given are the use in marketing material of such phrases as "Uber drivers" and "our drivers" and attaching the label "Uber" to the ride as well as the booking. All of these are thoroughly equivocal: they could mean a driver or a ride provided through Uber just as much as a driver employed by Uber or a ride provided by it as principal.
(5) "30,000 separate businesses". The Tribunal says at para. 90 that it is "faintly ridiculous" to say that "Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform'". I agree that in some contexts – though not all – it might seem rather unnatural to describe a driver with his own car and a private hire licence who gets all or most of his work through Uber as carrying on a "business"; and Uber's references to drivers "growing" such businesses are unconvincing. But this seems to me to be another example of focusing on a label rather than on the underlying question. I see nothing inherently ridiculous in the notion that Uber provides access to 30,000 drivers who will offer their services as principals. The same, subject only to numbers, could be said of the old "radio taxi" services or, depending on its particular arrangements, a minicab service following the model summarised at para. 126 above.
(1) Limited information available to the driver at the point of acceptance. The Tribunal found it "absurd" to believe that the driver enters into a contract with a person whose identity he does not know and who does not know his to drive him or her to a destination unknown at the time that he accepts the job: see paras. 91 and 92 (3). As to the passenger and driver not knowing each other's names, I cannot see that this is inconsistent with the existence of a contract between them: that is the case not only whenever a passenger flags a taxi in the street but also whenever he or she books a minicab operating on the model described above where the driver is the principal. (In fact the passenger at least is not entirely in the dark, since Uber supplies the driver's first name, and he or she will be able to ascertain his identity if necessary because he will have to display his private hire licence.) As for the driver not knowing the destination in advance, this is the case whether he contracts with the passenger or with Uber, and I do not see how it is relevant to that question. But I do not in any event see what the supposed absurdity consists in: the driver is in business to drive passengers where they want to go, and it is not likely to be of importance to him (at least for any legitimate reason) to know the destination at the point of acceptance.
(2) Driver's lack of control over key terms. The Tribunal, again, found it absurd to treat the driver as entering into a contract with the passenger of which the key terms – specifically route and fare – are set by a non-party (i.e. Uber): see paras. 91 and 92 (5) and (6). As to the route, the Tribunal found at para. 54 that the driver was not required by Uber to follow the route shown on the App, but that if there was a departure from it and the passenger subsequently asked for a refund because the most efficient route was not followed the driver would have to justify the departure. I do not think that it is accurate to describe that, as the Tribunal does in this paragraph, as a finding that Uber "prescribes" the route; but, whether it is accurate or not, I cannot see that it is inconsistent with the passenger and driver contracting directly. Whenever a passenger hires a cab or minicab it must be an implicit term that the driver will make a reasonable judgement of the best route; the fact that on an Uber hire that judgement is normally, in effect, delegated to the App cannot make a fundamental difference. (Indeed, as already noted, it is increasingly usual for any private hire driver to employ satnav or similar apps.) As for the fare, though that is indeed set by the Uber software, with no opportunity for negotiation by the driver, I cannot see why that is inconsistent with the existence of a contract between driver and passenger. As set out above, it is very common for minicab operators to prescribe set fares, but the drivers may nonetheless contract as principals.
(3) Payment arrangements. Another feature which the Tribunal believed rendered it "absurd" to treat the driver as entering into a contract with the passenger is that his or her payment is made to Uber: see para. 91. But it is not at all unusual for minicab operators (and booking services for taxis) to collect payment on behalf of their drivers: that will routinely happen in the case of account customers. It does not follow that the driver is not contracting with the passenger as a principal: the debt is owed to him, even though the passenger pays it through a third party. Again, that is apparent from the case law to which I refer above.
(4) Invoice. The ET attaches importance to the fact that the payment mechanism generates an invoice from the driver to the passenger and says that this is clearly a fiction. I would not accept that description. The invoice records the service rendered by one party to the other and states the price. It is true that it is not a demand, because the price is paid automatically by debit to the passenger's card; but it is not uncommon to find business systems generating invoices for goods or services which have already been paid for. It is less usual for a copy of the invoice not even to be given to the recipient of the goods or services, but it is not particularly surprising in a case like the present, since it is not clear what use the passenger would have for it: he or she gets a receipt anyway at the end of each trip.
(5) Quality control. The Tribunal notes at para. 92 (7) that Uber "imposes numerous conditions on drivers". The only specific example which it gives is the list of acceptable vehicles, but no doubt it had in mind earlier findings about what drivers are told about how to behave towards passengers. But this does not seem to me inconsistent with the existence of a contract between driver and passenger. Even if Uber acts only as an intermediary it plainly has an interest in maintaining the quality of the product from which it makes its profit. The same goes for the maintenance of the ratings and performance management system referred to at para. 92 (8) and more fully explained at paras. 55-56. Similar measures to ensure quality – including some more intrusive ones such as the requirement to wear uniform – are found in the taxi and minicab cases referred to above.
(6) Recruitment. The Tribunal found at paras. 40-41 of its Reasons that would-be Uber drivers had to attend personally at its office to present the required documentation (Public Carriage Office licence, PHV licence, proof of insurance etc) and that they would be "assessed" in the very limited sense that if it was apparent that they could not speak English they would be excluded and that if they exhibited signs of mental illness they would be referred to TfL. At para. 91 (2) it summarises that as: "Uber interviews and recruits drivers". I am not sure that that fairly reflects the actual findings. But in any event the facts as found seem to me to be entirely neutral as regards the question of whether, once recruited, drivers provide their services for Uber or for the passengers.
"Additionally, Customer acknowledges and agrees that repeated failure by a Driver to accommodate User requests for Transportation Services while such Driver is logged in to the Driver App creates a negative experience for Users of Uber's mobile application. Accordingly, Customer agrees and shall ensure that if a Driver does not wish to provide Transportation Services for a period of time, such Driver will log off of [sic] the Driver App."
Mr Galbraith-Marten submitted that that term necessarily demonstrated that drivers were under a contractual obligation to Uber (he would say ULL) to be available to work when logged on. I do not accept that. It is equally consistent with Uber's case that its essential relationship with drivers is to license them the use of the App. It is consistent with that case that it should reserve the right to take steps which disincentivise drivers from being logged on when they are not in fact available (which can give would-be passengers a misleading idea of how many cars are in fact available nearby). That is not the same as a penalty for breach of a positive obligation owed to it or an affiliate.
(1) It is said to be absurd that if Uber became insolvent and failed to pass on the payment the passenger should be liable to the driver. But if Uber – whether for insolvency or any other reason – failed to account to the driver for the fare paid in relation to a particular ride, the driver would have no claim against the passenger, since he or she would have made payment by the agreed mechanism (i.e. by authorising a debit to his or her card at the conclusion of the ride).
(2) The Tribunal suggests that if the contract were between the passenger and the driver the passenger might have the obligations of an employer under the legislation protecting workers – e.g. to pay the national minimum wage. I agree with the Master of Rolls and Bean LJ that that is, with all respect to the Tribunal, obviously wrong: quite apart from anything else, the passenger is plainly a customer of the driver's business so that the words of exception in section 230 (3) (b) would apply.
(3) The Tribunal says that the parties cannot have contemplated that the driver, rather than Uber, would bear the risk of non-payment by the passenger as a result of a some failure in the card collection systems or of unauthorised use of the card by the passenger (fraud); and that that is illustrated by the fact that Uber in fact has a policy that it will pay the driver at least in cases of fraud. This too seems to me neutral. Even on Uber's analysis it is its obligation to collect the fares and there is nothing surprising in it bearing the risk of a failure – innocent or dishonest – in the collection process.
DISCUSSION AND CONCLUSION
B. THE SECONDARY ISSUES
(1) Does availability time constitute "working time" for the purpose of the WTR – namely (regulation 2) "any period during which he is working, at his employer's disposal and carrying out his activity or duties" ? We were not taken to any of the authorities about the effect of that definition.
(2) Does availability time fall to be taken into account in calculating whether the driver has received the national minimum wage ? We were not taken through the NMWR, which are extremely complex, but the central element in the relevant provisions is the time during which the worker is "working". The Claimants' case, which the ET accepted, is that the during availability time they were doing "unmeasured work" within the meaning of Chapter 4 of Part 5 of the Regulations.
The Tribunal, correctly, recognised that the three questions are distinct and addressed them separately. But it regarded the answer to the first as effectively dictating the answer to the other two.
"There is no doubt that zero-hours contracts are a matter of very great concern. This is because they are often—although not always—cynically constructed agreements, framed by the employer in order to avoid their legal duties. I do not believe that the common law can successfully deal with them alone. Autoclenz allows a court to deal with the cases where the agreement is a sham, but the problems arise when it genuinely reflects the way in which the contract is performed, although the worker would choose that the contract were otherwise. The courts cannot simply ignore express terms or apply some general doctrine of unconscionability to invalidate a contract because of unequal bargaining power."
"… [I]n order to apply the principle of the NMW/NLW [National Living Wage] to innovative business models, it is necessary to consider the concept of 'working time': measuring 'working time' for NMW/NLW purposes can become more complex in this context."
More particularly, paras. 8.13-14 read (so far as material):
"8.13. … In the context specifically of app-based platform working, one of the issues arising is how time spent waiting for tasks while logged into the app is classified. Worker representatives have argued that waiting for tasks while logged onto the app is a necessary part of the job and that time should be paid at the NMW/NLW. Otherwise, the risk of low demand is faced by the worker rather than the employer – what the [Taylor] review called 'one-sided flexibility'.
8.14. Employers have expressed concerns that such an interpretation is unfair because they could be forced to pay the NMW/NLW to individuals who open multiple apps simultaneously, or who log into an app knowing there will be no tasks available, or where individuals might open the app to receive the NMW/NLW but refuse to accept tasks. …"
A number of questions are asked relating to those issues. These are quintessential policy issues of a kind that Parliament is inherently better placed to assess than the Courts.
"87. In the first place, we have been struck by the remarkable lengths to which Uber has gone in order to compel agreement with its (perhaps we should say its lawyers') description of itself and with its analysis of the legal relationships between the two companies, the drivers and the passengers. Any organisation (a) running an enterprise at the heart of which is the function of carrying people in motor cars from where they are to where they want to be and (b) operating in part through a company discharging the regulated responsibilities of a PHV operator, but (c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services (through UBV or ULL), and (d) resorting in its documentation to fictions, twisted language and even brand new terminology, merits, we think, a degree of scepticism. Reflecting on the Respondents' general case, and on the grimly loyal evidence of Ms Bertram in particular, we cannot help being reminded of Queen Gertrude's most celebrated line:
'The lady doth protest too much, methinks.'
88. Second, our scepticism is not diminished when we are reminded of the many things said and written in the name of Uber in unguarded moments, which reinforce the Claimants' simple case that the organisation runs a transportation business and employs the drivers to that end. We have given some examples in our primary findings above. We are not at all persuaded by Ms Bertram's ambitious attempts to dismiss these as mere sloppiness of language.
89. Third, it is, in our opinion, unreal to deny that Uber is in business as a supplier of transportation services. Simple common sense argues to the contrary. The observations under our first point above are repeated. Moreover, the Respondents' case here is, we think, incompatible with the agreed fact that Uber markets a 'product range'. One might ask: Whose product range is it if not Uber's? The 'products' speak for themselves: they are a variety of driving services. Mr Aslam does not offer such a range. Nor does Mr Farrar, or any other solo driver. The marketing self-evidently is not done for the benefit of any individual driver. Equally self-evidently, it is done to promote Uber's name and 'sell' its transportation services. In recent proceedings under the title of Douglas O'Connor-v-Uber Technologies Inc the North California District Court resoundingly rejected the company's assertion that it was a technology company and not in the business of providing transportation services. The judgment included this:
'Uber does not simply sell software; it sells rides. Uber is no more a 'technology company' than Yellow Cab is a 'technology company' because it uses CB radios to dispatch taxi cabs.'
We respectfully agree.
90. Fourth, it seems to us that the Respondents' general case and the written terms on which they rely do not correspond with the practical reality. The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform' is to our minds faintly ridiculous. In each case, the 'business' consists of a man with a car seeking to make a living by driving it. Ms Bertram spoke of Uber assisting the drivers to 'grow' their businesses, but no driver is in a position to do anything of the kind, unless growing his business simply means spending more hours at the wheel. Nor can Uber's function sensibly be characterised as supplying drivers with leads'. That suggests that the driver is put into contact with a possible passenger with whom he has the opportunity to negotiate and strike a bargain. But drivers do not and cannot negotiate with passengers (except to agree a reduction of the fare set by Uber). They are offered and accept trips strictly on Uber's terms.
91. Fifth, the logic of Uber's case becomes all the more difficult as it is developed. Since it is essential to that case that there is no contract for the provision of transportation services between the driver and any Uber entity, the Partner Terms and the New Terms require the driver to agree that a contract for such services (whether a 'worker' contract or otherwise) exists between him and the passenger, and the Rider Terms contain a corresponding provision. Uber's case is that the driver enters into a binding agreement with a person whose identity he does not know (and will never know) and who does not know and will never know his identity, to undertake a journey to a destination not told to him until the journey begins, by a route prescribed by a stranger to the contract (UBV) from which he is not free to depart (at least not without risk), for a fee which (a) is set by the stranger, and (b) is not known by the passenger (who is only told the total to be paid), (c) is calculated by the stranger (as a percentage of the total sum) and (d) is paid to the stranger. Uber's case has to be that if the organisation became insolvent, the drivers would have enforceable rights directly against the passengers. And if the contracts were 'worker' contracts, the passengers would be exposed to potential liability as the driver's employer under numerous enactments such as, for example, NMWA. The absurdity of these propositions speaks for itself. Not surprisingly, it was not suggested that in practice drivers and passengers agree terms. Of course they do not since (apart from any other reason) by the time any driver meets his passenger the deal has already been struck (between ULL and the passenger). The logic extends further. For instance, it is necessarily part of Uber's case (as constructed by their lawyers) that where, through fraud or for any other reason, a fare is not paid, it has no obligation to indemnify the driver for the resulting loss. Accordingly, in so far as its policy is to bear the loss and protect the driver (we were only told of a policy relating to fraud), it must be free to reverse the policy and if it does so, drivers will be left without remedy. That would be manifestly unconscionable but also, we think, incompatible with the shared perceptions of drivers and Uber decision makers as to Uber's legal responsibilities. For all of these reasons, we are satisfied that the supposed driver/passenger contract is a pure fiction which bears no relation to the real dealings and relationships between the parties.
92. Sixth, we agree with Mr Linden that it is not real to regard Uber as working 'for' the drivers and that the only sensible interpretation is that the relationship is the other way around. Uber runs a transportation business. The drivers provide the skilled labour through which the organisation delivers its services and earns its profits. We base our assessment on the facts and analysis already set out and in particular on the following considerations.
(1) The contradiction in the Rider Terms between the fact that ULL purports to be the drivers' agent and its assertion of "sole and absolute discretion" to accept or decline bookings.
(2) The fact that Uber interviews and recruits drivers.
(3) The fact that Uber controls the key information (in particular the passenger's surname, contact details and intended destination) and excludes the driver from it.
(4) The fact that Uber requires drivers to accept trips and/or not to cancel trips, and enforces the requirement by logging off drivers who breach those requirements.
(5) The fact that Uber sets the (default) route and the driver departs from it at his peril.
(6) The fact that UBV fixes the fare and the driver cannot agree a higher sum with the passenger. (The supposed freedom to agree a lower fare is obviously nugatory.)
(7) The fact that Uber imposes numerous conditions on drivers (such as the limited choice of acceptable vehicles), instructs drivers as to how to do their work and, in numerous ways, controls them in the performance of their duties.
(8) The fact that Uber subjects drivers through the rating system to what amounts to a performance management/disciplinary procedure.
(9) The fact that Uber determines issues about rebates, sometimes without even involving the driver whose remuneration is liable to be affected.
(10) The guaranteed earnings schemes (albeit now discontinued).
(11) The fact that Uber accepts the risk of loss which, if the drivers were genuinely in business on their own account, would fall upon them.
(12) The fact that Uber handles complaints by passengers, including complaints about the driver.
(13) The fact that Uber reserves the power to amend the drivers' terms unilaterally.
93. Seventh, turning to the detail of the statutory language, we are satisfied, having regard to all the circumstances and, in particular, the points assembled above, that the drivers fall full square within the terms of the 1996 Act, s 230(3)(b). It is not in dispute that they undertake to provide their work personally. For the reasons already stated, we are clear that they provide their work 'for' Uber. We are equally clear that they do so pursuant to a contractual relationship. If, as we have found, there is no contract with the passenger, the finding of a contractual link with Uber is inevitable. But we do not need to base our reasoning on a process of elimination. We are entirely satisfied that the drivers are recruited and retained by Uber to enable it to operate its transportation business. The essential bargain between driver and organisation is that, for reward, the driver makes himself available to, and does, carry Uber passengers to their destinations. Just as in Autoclenz, the employer is precluded from relying upon its carefully crafted documentation because, we find, it bears no relation to reality. And if there is a contract with Uber, it is self-evidently not a contract under which Uber is a client or customer of a business carried on by the driver. We have already explained why we regard that notion as absurd.
94. Eighth, while it cannot be substituted for the plain words of the statute, the guidance in the principal authorities favours our conclusion. In particular, for the reasons already given, it is plain to us that the agreement between the parties is to be located in the field of dependent work relationships; it is not a contract at arm's length between two independent business undertakings. Moreover, the drivers do not market themselves to the world in general; rather, they are recruited by Uber to work as integral components of its organisation.
95. Ninth, we do not accept that the authorities relied upon by Mr Reade support the conclusion for which he argues. We have four main reasons.
(1) None of the authorities actually turned on the limb (b) test.
(2) They were concerned wholly or very largely with whether there was an 'umbrella' contract between the claimants and the respondents, an issue with which we are not concerned at all. Only one addressed (and then only in a single sentence) the question at the heart of our case of whether, in performing individual services (here driving trips), a claimant is working 'for' the putative employer pursuant to a contract.
(3) Two of the cases arise out of facts which have little in common with the matter before us. Cheng Yuen and Quashie concern arrangements by which individuals were permitted to render to the golf club members and nightclub 'clients' services ancillary to the principal service or facility offered by the proprietors. But there is nothing 'ancillary' about the Claimants' work. It seems to us that there are added difficulties for the putative employer with a defence modelled on Cheng Yuen and Quashie where the claimants perform the very service which the respondent exists to provide. In such a case it is (as Uber appears to recognise) essential to the defence for the Tribunal to find not only that the claimants contract personally with those who receive the services in question but also that they collectively, rather than the respondent, 'are' the business. In a proper case the evidence warrants such findings but on a careful review of all the material placed before us, our conclusions on both propositions are, for the reasons already stated, entirely adverse to Uber.
(4) Although the facts of Mingeley and Khan are closer to those of the instant case, there was ample room in both for the finding that the arrangements between the parties were consistent with the claimant personally entering into a contract with each service user. As we have explained, there is no room for that interpretation to be placed upon the dealings (such as they are) between the Uber driver and his passenger.
In all the circumstances, it seems to us that Mr Reade's arguments in reliance on the authorities he cited cannot prevail in the face of our findings on the evidence.
96. Tenth, it follows from all of the above that the terms on which Uber rely do not correspond with the reality of the relationship between the organisation and the drivers. Accordingly, the Tribunal is free to disregard them. As is often the case, the problem stems at least in part from the unequal bargaining positions of the contracting parties, a factor specifically adverted to in Autoclenz. Many Uber drivers (a substantial proportion of whom, we understand, do not speak English as their first language) will not be accustomed to reading and interpreting dense legal documents couched in impenetrable prose. This is, we think, an excellent illustration of the phenomenon of which Elias J warned in the Kalwak case of "armies of lawyers" contriving documents in their clients' interests which simply misrepresent the true rights and obligations on both sides.
97. Eleventh, none of our reasoning should be taken as doubting that the Respondents could have devised a business model not involving them employing drivers. We find only that the model which they chose fails to achieve that aim."
Note: I have not reproduced the Tribunal's footnotes.
Note 1 The definitions in the ERA, the WTR and the NMWA are identical, and for convenience I will in this judgment refer only to section 230 (3) of the ERA.
[Back] Note 2 For convenience, since the Claimants are all men I will refer to Uber drivers generally as “he”.
[Back] Note 3 I do not propose to adopt the volatile and idiosyncratic Uber descriptions for passengers – variously “Customers”, “Users” and “Riders”.
[Back] Note 4 As the ET explains, we are in fact concerned with two sets of terms, current at different times – “the Partner Terms” and “the New Terms”. Since it is common ground that, despite numerous differences of structure and terminology, they are, so far as concerns the present issue, to substantially the same effect, I will where appropriate refer to them together as “the Agreement”.
[Back] Note 5 As I have already observed, Uber’s terminology is idiosyncratic. The New Terms distinguish between “Customer” and “Driver”, to cater for the case where the App is licensed to a business which makes available the service of drivers, that business being the Customer; the equivalent under the Partner Terms is the Partner. In virtually all cases, however, the licensees are owner-drivers, and Customer and Driver can be treated as equivalent.
[Back] Note 6 See previous footnotes: here “Customer” means passenger (or “User” in the terminology of the New Terms), and “Partner” for all practical purposes means driver. [Back] Note 7 As to this, see also the observations of Sir Patrick Elias quoted at para. 165 below.
[Back] Note 8 Nor were we addressed about the app-based systems for booking London taxis, such as Gett, which have emerged more recently. [Back] Note 9 We were shown this Notice but the relevant parts are general in character and contain nothing relevant for our purposes. [Back] Note 10 Not all Courts in the United States have taken the same position on this. Ms Rose referred us to the decision of a District Court of Appeal in Florida inMcGillis v. Department of Economic Opportunity, 210 So. 3d 220.
[Back] Note 11 Counsel were unable to confirm at the hearing whether there is any limit on the destinations that Uber’s software will accept, or, if not, whether drivers in London are expected to take passengers literally anywhere in the UK. It seems very unlikely that they are, but almost all destinations are presumably in or around London, and cases in which it is one that could not reasonably have been contemplated must be too rare to affect the analysis.
[Back] Note 12 It would not be legitimate to be unwilling to take passengers to unpopular areas (as in the common, though doubtless unfair, belief that some black cabs in London are reluctant to go “south of the river” at night). That is of course one of the reasons why destinations are not revealed at the point of offer. [Back] Note 13 Again, it needs to be borne in mind that for practical purposes “Customer” can be taken to mean “driver”. [Back] Note 14 By far the most serious possibility is of course of injury caused by the driver’s negligence. But the passenger would, rightly, assume that the driver was insured, and no question of any claim against Uber as distinct from the driver need arise. [Back] Note 15 The range of such services is reviewed in Professor Prassl’s recent book Humans as a Service: The Promise and Perils of Work in the Gig Economy (Oxford 2018).
Note 1 The definitions in the ERA, the WTR and the NMWA are identical, and for convenience I will in this judgment refer only to section 230 (3) of the ERA. [Back]
Note 2 For convenience, since the Claimants are all men I will refer to Uber drivers generally as “he”. [Back]
Note 3 I do not propose to adopt the volatile and idiosyncratic Uber descriptions for passengers – variously “Customers”, “Users” and “Riders”. [Back]
Note 4 As the ET explains, we are in fact concerned with two sets of terms, current at different times – “the Partner Terms” and “the New Terms”. Since it is common ground that, despite numerous differences of structure and terminology, they are, so far as concerns the present issue, to substantially the same effect, I will where appropriate refer to them together as “the Agreement”. [Back]
Note 5 As I have already observed, Uber’s terminology is idiosyncratic. The New Terms distinguish between “Customer” and “Driver”, to cater for the case where the App is licensed to a business which makes available the service of drivers, that business being the Customer; the equivalent under the Partner Terms is the Partner. In virtually all cases, however, the licensees are owner-drivers, and Customer and Driver can be treated as equivalent. [Back]
Note 6 See previous footnotes: here “Customer” means passenger (or “User” in the terminology of the New Terms), and “Partner” for all practical purposes means driver. [Back]
Note 7 As to this, see also the observations of Sir Patrick Elias quoted at para. 165 below. [Back]
Note 8 Nor were we addressed about the app-based systems for booking London taxis, such as Gett, which have emerged more recently. [Back]
Note 9 We were shown this Notice but the relevant parts are general in character and contain nothing relevant for our purposes. [Back]
Note 10 Not all Courts in the United States have taken the same position on this. Ms Rose referred us to the decision of a District Court of Appeal in Florida inMcGillis v. Department of Economic Opportunity, 210 So. 3d 220. [Back]
Note 11 Counsel were unable to confirm at the hearing whether there is any limit on the destinations that Uber’s software will accept, or, if not, whether drivers in London are expected to take passengers literally anywhere in the UK. It seems very unlikely that they are, but almost all destinations are presumably in or around London, and cases in which it is one that could not reasonably have been contemplated must be too rare to affect the analysis. [Back]
Note 12 It would not be legitimate to be unwilling to take passengers to unpopular areas (as in the common, though doubtless unfair, belief that some black cabs in London are reluctant to go “south of the river” at night). That is of course one of the reasons why destinations are not revealed at the point of offer. [Back]
Note 13 Again, it needs to be borne in mind that for practical purposes “Customer” can be taken to mean “driver”. [Back]
Note 14 By far the most serious possibility is of course of injury caused by the driver’s negligence. But the passenger would, rightly, assume that the driver was insured, and no question of any claim against Uber as distinct from the driver need arise. [Back]
Note 15 The range of such services is reviewed in Professor Prassl’s recent book Humans as a Service: The Promise and Perils of Work in the Gig Economy (Oxford 2018). [Back]