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Uber May Owe £1bn in Taxes After UK Supreme Court Ruling on "Gig Workers"

The UK's Supreme Court, the highest appeal court in the UK, has held in a unanimous ruling that Uber drivers are not independent contractors.  Key factors that persuaded the judges were that:

  • Uber set the fare which meant that they dictated how much drivers could earn;
  • Uber set the contract terms and drivers had no say in them;
  • Request for rides is constrained by Uber who can penalize drivers if they reject too many rides;
  • Uber monitors a driver's service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve

Uber was not paying 20% Valued Added Tax on the fares by pitching itself as a booking agent that hired self-employed contractors rather than a transport provider.  Because of the ruling, a significant UK tax bill for Uber could become due.  Uber is facing driver classification challenges in a number of countries.  

Employers with so-called "gig workers" outside the US may need to keep a reserve for a rainy day in case a similar ruling affects their business abroad.

Looking at these and other factors, the court determined that drivers were in a position of subordination to Uber where the only way they could increase their earnings would be to work longer hours.

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