What does Supreme Court decision in Uber mean for staffing companies, intermediaries end end-users?
Published on 22nd Feb 2021
While media attention has focused on the employment costs now at stake, including holiday pay and minimum wage liabilities, the decision has far greater legal and practical implications for those supporting the use of or using gig workers. Following on from our Insights looking at the Supreme Court's reasoning (here) and the practical takeaways from the decision (here), in this article we look at the wider implications for the sector.
We should add three key points at the outset:
- Uber will have changed its model since the time to which the claim related (2016 and before), so this decision may have limited application for the platform going forward.
- In our experience, no two platforms have exactly the same operating model, so this judgment may not impact every other staffing platform.
- Some platforms do already act as "employers" and this judgment will not affect them . However there are lessons for nearly everyone involved in the use or supply of gig workers.
At the heart of all this is the dilemma platforms and traditional staffing companies have always faced: taking more control of quality to ensure consistently good customer experience is an understandable commercial practice. However, the more control (or subordination, to use a word that crops up in the case a lot), the greater the risk of a finding like that in this case. Indirectly, this suggests that there is less risk of similar findings in relation to platforms that exist for the purpose of helping hirers find in-demand, highly paid skilled workers who use professional discretion in relation to how they work and determine how to perform (and what to charge for) a project they find via a platform.
Linked to this is another dilemma for platforms and other intermediaries : as the case makes clear, a degree of dependency of an individual on a particular platform will potentially sway a court towards a finding of worker or employment status. This means that the most successful and popular platforms, which will have achieved that status by doing good things, may be penalised for being successful. Platforms may need to have competitors and may need to allow individuals to multi-app.
It may be that any usage beyond trying to supplement other earnings will be caught by legislation or case law that tends to categorise “mainly earn through platform x” individuals as employees or workers. This may put paid to those platforms who go to market with phrases messages about their “team” of (impliedly dedicated) service providers. That may leave relatively unscathed those platforms which exist just for students or primary carers and the like just trying to pick up extra cash, which is of course how many platforms started out. Many are in fact still in that space.
And perhaps the biggest issue for society arising from this case and any similar cases is whether this sort of worker protection will ultimately lead to better or more jobs. Or will increasing labour costs relating to certain types of typical gig worker tasks drive "employers" towards instead investing in automation of the processes previously performed by gig workers?
In the US Instacart is exploring the use of robot driven warehouses. Will taxi apps and logistics companies invest in drones and driverless cars? Will agriculture businesses invest more in harvesting technology? Might we see a relative reduction in lower paid gig worker activity with platforms increasingly focussing just on professional experts in creative and technical roles, and harder to automate roles in industries like healthcare and hospitality?