26 August 2024

Uber: Rasier Operations BV v. E Tu Inc.

 

Uber drivers will be carefully storing their digital record of hours worked following Court of Appeal ruling that they are employees whilst logged on with Uber.  Hours worked will assist in assessing rights to minimum wage, holiday pay, parental leave and bereavement leave.  Employee status also opens rights to union membership and to pursue personal grievance claims against Uber.

Based out of the Netherlands, Uber claimed the six thousand Uber drivers in New Zealand are independent contractors.

Uber’s ‘take it leave it’ contract was described by the Court of Appeal as window-dressing.  It gives the impression drivers are not employees when Uber drivers in fact are not in business on their own account: they are not able to make decisions typical of an independent contractor; they neither bear the risks nor enjoy the returns of an independent contractor.

Central to the Court of Appeal ruling was the fact Uber drivers have no opportunity to establish any goodwill of their own, or to influence the quantity of the work received, or the quality of work, or (with limited exceptions) the revenue.

Drivers provide services for riders referred to them by Uber for remuneration determined by Uber while subject to a high level of control and direction from Uber.

Uber claims to be no more than a technology business, linking drivers with those seeking transportation.

This oversimplifies the relationship, the Court of Appeal ruled.

Uber has detailed control over driver operations.

Drivers are free to accept a ride for a fee different from that specified by Uber; but it cannot be higher than the rate set by Uber.

Uber unilaterally decides whether a particular fee should be later adjusted: downwards if a rider complains about the route taken; upwards for cleaning costs if an intoxicated rider throws up.

Uber specifies the pick-up point, and determines the route, while monitoring vehicle location with GPS tracking on the driver’s mobile device.

A driver’s failure to maintain a specified average customer rating results in a warning.  Driver ratings, which, should they be made available to the public, could be considered an aspect of business goodwill attaching to individual drivers.  Driver ratings are not public.  Riders cannot access them to assist in choosing a particular driver.

Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill.

Uber uses ratings to measure driver performance and to discipline poor performers.

This is a classic form of subordination characteristic of employment contracts, the court said.

The flexibility and choice supposedly reserved to drivers in Uber’s standard agreement are largely illusory, the Court of Appeal said.

Uber’s high level of control over drivers, while logged in, is evidence of an employer/employee relationship as defined in the Employment Relations Act, the court ruled.

An employer/employee relationship also exists with the Uber Eats app, where members of the public use an Uber app to order food from a restaurant, the court ruled.

Similar litigation in England saw Uber drivers ruled to be ‘workers.’  Employment law in that country defines ‘worker’ as a separate intermediate category between employees and independent contractors.  In England, ‘workers’ share some, but not all, of the employment protections afforded employees.

Rasier Operations BV v. E Tu Incorporated – Court of Appeal (26.08.24)

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