What does the Uber ruling mean?


Uber has lost the tribunal case on the employment rights of two drivers who brought legal action against the firm, arguing that they should be entitled to holiday pay, a guaranteed minimum wage and breaks.

This is a landmark ruling for the taxi firm, so it's worth taking a look at what it means for Uber and the "gig economy" as a whole.

So what is the "gig economy"?

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It is an on-demand service on apps and websites which hooks users up with whatever they require.

It can be divided into two categories: local and online. Local examples include Uber and Deliveroo, which involve people physically delivering services.

The online "gig economy" refers to people delivering services and labour digitally on the internet, for example graphic design, data entry and software development.

It's a fairly new phenomenon, but in line with recent employment trends which are moving away from the more traditional model.

Why did it start?

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Dr Mark Butler, employment law lecturer at Lancaster University, said it could be down to people's increasing desire for flexibility, adding that the "gig economy bends over backwards" to accommodate busy lifestyles.

He said the influence of the international stage is another factor, adding that the trend seems to have originated in the US.

What are the pros?

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The arguments for and against it are still being formed, but one of the advantages is thought to be this flexibility.

It allows people to combine commitments in their life, making it an attractive choice for some. Dr Butler said another advantage is that it is a cheap model - people do not need premises for example. He said it can also be beneficial for workers out of work who can use it as "a good stop gap" and a means of earning money.

What are the cons?

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Income can be unpredictable, resulting in uncertainty for workers. Success often comes down to the individual's skills and resources

Dr Butler said a big con is that it moves the costs to the individual. He said in normal circumstances the person providing the service would be a worker or employee, and as part of that would get other benefits such as pension, holiday pay and sick pay. But in the "gig economy", the cost is being shifted on to the worker because they no longer have a "safety net" in an instance such as when they want to go on holiday.

How many people work in the UK "gig economy"?

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In an online survey of 2,238 UK adults aged 16-75, 21% said they have tried to find work managed via platforms such as Upwork, Uber or Handy during the past year. This is equivalent to around nine million people - almost one fifth of the adult population, a report in February 2016 said.

Around one in nine (11%) of respondents said they had succeeded in doing so, equivalent to around 4.9 million people, according to the joint study by the Foundation for European Progressive Studies (FEPS) and UNI Europa, carried out by the University of Hertfordshire and Ipsos MORI.

With Uber losing a tribunal case on the employment rights of drivers, what is next for the "gig economy"?

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Time will tell if this ruling sets a legal precedent.

However, Tim Goodwin, associate solicitor at Winckworth Sherwood, said the decision will have "massive implications" across the "gig economy" due to an increasing number of start-up businesses effectively adopting Uber's model. "The effect of this judgment is that those kinds of business may owe a lot more to their workers, such as paid holiday and minimum wage, than they had bargained for," he said.

How will the Uber tribunal case impact on the consumer?

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It is believed that it will increase costs for Uber users. Steven Eckett, employment solicitor at Gardner Leader solicitors, said the decision "will have repercussions throughout the gig industry".

He said it is probable that these increased costs will be passed on to the consumer through higher fees, delivery rates and prices for goods and services. He added: "The service industry like couriers, fast food delivery companies and portable cleaning operators are likely to be hit the hardest."