Can India feel ripples of British Supreme Court ruling on Uber

US survey showed 70 pc gig economy workers were not satisfied with help their received from companies during pandemic (MIG photos/Aman Kanojiya)

Ride hailing app Uber faces an existential challenge in the United Kingdom following a landmark order by the Supreme Court which upheld the orders of lower courts that its drivers were its employees, not independent contractors as the company calls them. The court said as the working conditions, including setting fares, was tightly controlled by Uber, they are entitled to be treated as its workers. It also held that drivers are working from the time they turn on Uber’s app, rather than only when transporting passengers, as the company had argued.

The court said that the drivers were entitled to all the rights and benefits that an employee received and were covered by the same rules as employees of any other business, notably a minimum wage and paid leaves.

The winners of the Supreme Court orders are not just the 90,000-odd Uber drivers across the UK, but indeed for other workers, notably Uber’s rival apps in the UK and by extension to other gig economy businesses such as food delivery and other online services.

The ruling comes after three years of legal battles, all of which the California-based firm lost at various levels of courts. But for the workers it does not come a day too soon as the absence of any support system has been acutely felt by the gig economy workers since the economic crisis brought about by the pandemic.

Pandemic’s invisible victims

Though a comprehensive study reflecting impact of the pandemic on gig economy workers around the world has not yet been done, studies have been carried out in various countries on the issue.

The U.S. Bureau of Labor Statistics reported in 2017 that 55 million people in the United States were gig workers – or 34 pc of the workforce – and this was projected to rise to 43 pc in 2020. Of these about 1.6 million are part of a growing group of workers to emerge in the past decade, paid by tech platforms like ride-hailing giants Uber and Lyft or food delivery apps like DoorDash and Postmates. Since the onset of pandemic, two million Americans in addition began freelancing, according to a study by Upwork, a freelance job platform.

A survey of the gig economy workers in the US late in 2020 showed that over 70 pc of the workers were not satisfied with the support they had received from their companies during the pandemic. Over half expected some help either from the government or the companies they work for.

However, this has not been forthcoming in most countries. While in the United States, the first few months saw every adult American receive USD 1200 a month from the government as emergency assistance, it has since lapsed, leaving people dependent upon either their savings or the income they could generate during the pandemic.

For most of the gig economy companies, the business was hit badly in the first few weeks of the pandemic due to strict lockdowns. However, over time as governments began easing lockdown conditions, the business has picked up but in divergent ways. While food and other online delivery services have picked up, ride hailing apps continue to suffer due to far fewer commuters as many people continue to work from home and tourism industry is yet to recover any significant numbers.

This has severely impacted ride hailing app drivers globally, but in few other countries has the impact been as severe as in India, because of the absence of any assistance by the companies like Uber or Ola or by the government, pushing many of them deep into debt.

Even those working in areas like food deliveries that have grown in revenues complain that their earnings have not kept up as there are far more people competing for each delivery as more people, newly unemployed or those seeking to boost their income, join the gig economy.

Time to tweak business models

The issue of gig economy has raised concerns at the International Labour Organisation also. “Rise of the gig economy can pose risks to societies at-large, when for example it becomes the only economy, replacing entire groups of employees and their full-time jobs with workers who are not protected by labour laws, or eligible for benefits and social security. Gig workers are often classified as independent contractors which under certain laws precludes them from forming associations to protect their rights and engaging in collective bargaining,” ILO says.

“There remains a number of concerns about the conditions of work, and the potential for the gig economy to provide consistent and fairly paid work for all who rely upon it. Smart and effective policies are needed to help both workers and the platforms live up to expectations,” it says.

The pressure on gig economy companies to treat their workers better is rising. Last year, California brought in a law that obliged gig economy companies to treat their ‘independent contractors’ as workers and cover them with minimum wages and benefits like health cover and paid vacation. However, as per the local rules when the law was put to a referendum, the companies reportedly spent over USD 200 million in lobbying and advertising asking Californians to vote against the law. The referendum narrowly set aside the law.

But the gig economy firms know the pressure would keep building up elsewhere. The European Commission is also examining the question of rights of these workers and could rule later this year. It may be time for the companies and the governments to sit down and discuss a model which assures the workers of their rights but without killing the gig economy as it is not a business that could disappear anytime soon.

The companies would do well to come up with suggestions and go to the governments with a revised contract, reflecting a balance between their and workers’ interests. This contract could then to adapted to suit each country’s laws and ensure that their business model does not get upended by another court ruling in another country.

Before the UK ruling, Uber said it was committed to doing better for its drivers regardless of the outcome. “We believe all independent workers deserve to earn a decent wage,” CEO Dara Khosrowshahi had written in a blog post. “We’re calling on policymakers, other platforms and social representatives to move quickly to build a framework for flexible earning opportunities, with industry-wide standards that all platform companies must provide for independent workers,” he added.

That may well be the best course ahead for gig economy to continue drive ahead.