Today’s ruling by the UK’s Supreme Court that Uber’s drivers are its own workers and not independent contractors highlights its jeopardy of trying to ensure and control a first-class ride-hailing service while insisting on second-class working conditions for those who provide it.
The judges said they based their decision on the facts that Uber sets the fare prices for its drivers, imposes contracts and terms of service, rates them, requires them to be logged into its app and restricts their communications with passengers — all compromising their independence and suggesting they are “workers” for the company.
“Businesses can’t have it both ways, if they want to protect their brand through tight quality control, it’s more difficult to claim that the individuals providing the service are self-employed,” commented Alexandra Mizzi of law firm Howard Kennedy.
In the UK, “workers” do not have the same rights as “employees”, but are better off than the self-employed in being entitled to the national minimum wage and holiday pay. Ironically, Uber has been suggesting a similar kind of middle way for gig economy workers in the US and Europe, where they would have limited healthcare and guaranteed minimum earnings.
But its good intentions have yet to be converted into real improvements. In California, where Uber and its allies successfully rolled back protections with their success in November’s Proposition 22 ballot measure, the situation is reported to have worsened for drivers.
With President Biden having opposed Proposition 22 and the UK Supreme Court making its landmark ruling, Uber and the gig economy still face a reckoning. Some players are moving in the right direction: Just Eat Takeaway announced plans in December to offer more than 1,000 UK workers benefits including hourly wages and sick pay, although they will be employed through the Randstad agency.
In Uber’s case, robotaxis are not going to come to its rescue anytime soon — it gave up on its self-driving unit, transferring it to rival Aurora in December. Better compensation for its drivers will push it further away from profitability, customers will have to pay more and may switch to other smartphone apps and services. The UK and London may be ground zero for Uber’s problems right now, but the issue is an international and even existential one for its business model.
The Internet of (Five) Things
1. Robinhood chief bears brunt of GameStop grilling
Vlad Tenev, the chief executive of Robinhood, apologised for his company’s role in the furore over the ramping of GameStop shares, as the online trading platform bore the brunt of a political grilling in Washington. Tenev admitted for the first time that Robinhood lacked sufficient cash when it limited transactions in “meme” stocks. Here’s our scoring of the hearing.
2. Ant rivals boosted by Ma woes
China’s crackdown on Jack Ma’s Ant Group has boosted rival lenders that charge higher interest rates, raising fears that Beijing’s drive to lower credit risk could spur a wave of defaults. Six online lending platforms told the FT they experienced an uptick in business after Ant’s $37bn IPO was pulled.
3. EU allows post-Brexit data flows with UK
Brussels has given provisional approval for data exchanges with the UK, saying Britain appeared to offer “essentially equivalent” data protection standards to the EU. The draft ruling, if confirmed, will be reviewed every four years.
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4. UK version of US Darpa launched
An £800m agency to back “high-risk, high-reward” scientific research championed by former Number 10 adviser Dominic Cummings was launched today. The Advanced Research and Invention Agency (Aria) will be charged with funding “cutting-edge areas of research” to give Britain a lead in the industries of the future. Daniel Korski says its leadership will need individuals well versed in high-risk investment. Meanwhile, Nasa’s Perseverance rover has been landed on Mars. For the next two years, the car-sized vehicle will search for signs of life, launch a helicopter and prepare the way for future human visits.
5. Bill Gates: My green manifesto
The billionaire philanthropist writes in the FT that in conversations about climate change, one question often comes up: “How can I help?”. He outlines four bold ideas to help businesses make a measurable difference.
Tech tools — Prodigy maths game
This is a game that might not add up for your children. Dave Lee in San Francisco reports the company behind the online game Prodigy, billed as a fun way for children as young as six to learn maths, has been accused of bombarding students with “aggressive” advertising and manipulating children. Produced by Toronto-based Prodigy Education, it is said to be in use by teachers at more than 100,000 schools, mostly in North America. Aimed at six to 14-year-olds, players create a “wizard” avatar in a Pokemon-inspired virtual world in which they fight battles by answering maths challenges.
But a group of more than 20 advocacy and non-profit groups has accused Prodigy of misleading educators and parents and manipulating their young users by pushing a paid-for version of the game to children outside of school hours. Annual membership costs $59.88 a year, or $107.40 if paid in monthly instalments. The complaint, which was due to be submitted to the US Federal Trade Commission on Friday, says: “Children who play Prodigy without a premium membership are constantly reminded of their ‘lesser’ status. The avatars of kids without memberships literally walk in dirt, while those of kids with memberships ride around on clouds.”