Uber has lost its latest court bid to stop its British drivers being classified as workers, entitling them to rights such as the minimum wage, in a decision which jeopardises the taxi app’s business model.
Two drivers successfully argued at a tribunal in 2016 that the Silicon Valley firm exerted significant control over them to provide an on-demand service and that they should cease to be considered self-employed, which gives few protections in law.
An employment appeal tribunal upheld that decision last year prompting Uber to go to the Court of Appeal, which ruled against the firm in a decision handed down on Wednesday.
Uber, which could be valued at $120 billion in a flotation, has faced protests, regulator crackdowns and licence losses around the world as it challenges existing competitors and rapidly expands.
In Britain, the self-employed are entitled to only basic protections such as health and safety but workers receive the minimum wage, paid holidays and rest breaks. Uber has introduced a number of benefits for drivers in recent months.
Unions argue that the gig economy – where people often work for various firms at the same time without fixed contracts – is exploitative, whilst Uber says its drivers enjoy the flexibility and on average earn much more than the minimum wage.
Uber had argued in court that its practices have been widely used for decades in Britain by minicabs, private hire vehicles which cannot be hailed in the street like traditional black taxis.