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.