Uber has lost its legal bid to classify its drivers as self-employed rather than as workers, meaning thousands are now entitled to a minimum wage and holiday pay.
The ride-hailing company - which launched in the US in 2009 and came to the UK in 2012 - first lost an employment tribunal in 2016, which was upheld on appeal the following year.
Uber took the case to the High Court in 2018, only for the decision to be upheld again. Appealing to the Supreme Court was its last throw of the dice.
The Supreme Court’s judgement focused on five findings made at the original tribunal: Uber sets the fare for each ride; drivers have no say in their contract terms; their decision about whether to accept a fare is constrained by Uber’s ability to impose financial penalties for high cancellation rates; Uber’s five-star rating system gives it significant control over drivers; and that the Uber app limited communications between driver and passenger to an absolute minimum, preventing drivers from establishing relationships with riders that could lead to further work.
“The question, however, is not whether the system of control operated by Uber is in its commercial interests, but whether it places drivers in a position of subordination to Uber,” read the ruling, delivered by Lord Leggatt. “It plainly does.”
The Supreme Court also ruled that drivers are working for Uber when logged into the app within the territory in which they are licensed to drive and not, as Uber argued, solely when passengers were being driven to their destinations.
The decision means thousands of Uber drivers should now be entitled to a minimum wage, rest breaks, sick pay and holiday pay, and the American firm potentially faces a large compensation bill.
There are also implications for the wider gig economy, with Uber and other ride-hailing firms faced with making changes to their business models.
Uber has attracted controversy since its arrival in the UK. The company has previously been threatened with losing its licence to operate in London after TfL raised concerns over “security implications” and “several breaches that place passengers and their safety at risk”. However, it won an 18-month licence on appeal in November 2019 after its systems were ruled to have been "adequately addressed".