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Uber getting a rough ride

9 November 2016


Worldwide the ride-sharing company Uber seems to be getting caught up in wide ranging legal battles, from transport regulations to employment law.

The New Zealand Transport Agency has gone to war with Uber in New Zealand.

It says Uber allows its drivers to operate without the requisite passenger endorsement on their license.

Numerous infringement notices have been issued. Drivers face potential fines of $10,000 for operating without the endorsement in question.

Looking overseas, London cabbies have been engaged in litigation of one sort or another against Uber.

Uber drivers are kept busy with work because the cost of using the Uber vehicle can be as low as one-third of the cost of using a traditional taxi, although at busy times the cost can converge.

It appears cheapness is the attraction for the travelling public.

The reason Uber is able to charge lower prices is that it faces less overheads than traditional taxis.

The cost of getting requisite licenses and the cost of paying for taxi stands in particular airports are mentioned by taxi companies. The taxi drivers see this as unfair.

Now Uber is facing cases from its own drivers that may see the cost gap close. The latest skirmish has been in a London Employment Tribunal.

The tribunal found that Uber drivers had the right to various minimum entitlements. These include a minimum wage and holiday pay.

These are rights that we in New Zealand traditionally associate with employees. However, the tribunal did not go so far as to call Uber drivers employees.

In the United Kingdom they have another category of people, "workers", that fall between employees and contractors. That is what Uber drivers have been deemed in the UK.

Apparently Uber is appealing the decision.

Uber drivers in New Zealand have been in the media saying they plan to initiate litigation to follow their counterparts in the UK. We have yet to see that happen.

The battle for Kiwi Uber drivers would be fought on different terms.

In New Zealand you are either an employee or an independent contractor – we have no separate "worker" category.

Which of these two categories would Uber drivers fall into here?

If taxi drivers are anything to go by they would probably be classed as independent contractors.

Taxi drivers who own their own vehicle are typically treated as contractors. Those who do not might be seen as employees.

It is difficult to see what would be different for Uber drivers.

A leading case on owner drivers saw a courier, Neil Cunningham claim that he was in reality an employee.

Cunningham's challenge was unsuccessful, with the Court of Appeal in 1993 holding that the clear terms of his contractual agreement showed that he was a self-employed contractor.

This issue doesn't appear to have been litigated by owner drivers since the Cunningham case. The outcome might be different under current legislation, which places more emphasis on the true nature of the relationship.

A third possibility in line with the UK may emerge here shortly.

Labour MP David Parker has introduced a Minimum Wage (Contractor Remuneration) Amendment Bill into Parliament.

The Bill is approaching its third reading. It proposes a minimum wage for contractors performing certain jobs.

Sadly for Uber drivers they are not among those specified in the Bill. Courier drivers, however, will be covered. It is hard to see why there should be a difference.

So where owner drivers are creative, legal challenges against the company they contract to are possible.

The new Bill suggests that parliamentary sympathy is emerging for some independent contractors. We live in interesting times.

Uber is not going to go away and will continue to push the boundaries in the interests of providing a cheap service.

It will argue it is up to the customer to decide the level of service they want and the price they will pay.

Uber may argue that centralised legislation creating expensive bureaucracies should be circumvented if possible.

Others, including taxi companies, will argue for public safety and say it has its price.

Cullen - The Employment Law Firm is one of only eleven law firms in New Zealand approved to provide employment law services to Government and the public sector.

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