If you’ve not heard of Uber yet then you’ve either been living on the moon, or have other means of transport. If the latter, then fair enough.
Uber – an online transportation network company that lets people request taxi rides based on location and travel at a cheaper price – has had a pretty radical effect on the company-consumer dynamic. And has upset a number of taxi drivers along the way.
But why, I hear you ask, am I writing about Uber? Well this week the company has seen its drivers win the right to be classed as workers, rather than classed as working on a self-employed basis.
The ruling has a major impact for Uber, with drivers now closer than ever to getting holiday pay, paid rest breaks and the national minimum wage from the company.
There were murmurings that the case could set case law precedents, but this did not come to fruition.
The case did raise some interesting points from a contractor perspective however, with a key reason the case was found in the drivers favouring centring around the element of ‘control’. Specifically, the fact Uber requires drivers to accept trips and/or not cancel trips, and sets a route the driver can’t change from. There are also factors such as fixed fairs and Uber reserving the power to amend drivers’ terms.
Commenting on the ruling, Chris Bryce, IPSE chief executive, said: “Today’s decision gives Uber drivers clarity around their relationship with Uber, subject to Uber’s intended appeal. As far as IPSE is concerned self-employment means you’re in control, and that must remain a positive choice. If companies want to control exactly how or when their workers do the actual work, they must not shirk their responsibility to provide employment protections and pay their employer’s National Insurance Contributions too. If they want to engage workers on a freelance basis, then they must be business-like in that relationship.
What does the ruling mean for contractors in general? Well it certainly stresses the need to ensure you don’t slip into having a full-time employee ‘style’ of working. While Uber would claim each driver was a self-employed worker, their working dynamic didn’t reflect that. This can be the case at some companies who take on contractors, so it’s vital a contractor is aware of what can bring their IR35 status into jeopardy.
Should you want some peace of mind, we offer a full contract review amongst other services to help you prepare for IR35. We’ll give a pass or fail based on the current contract you hold, along with comprehensive comments on how to improve any problem areas.
For any further information or advice, please call us on 01163 800 400 or drop us an email. Alternatively, take a look around our Knowledge Hub for more IR35 advice, industry news and contractor guides.