Uber drivers are employees and not self-employed. The entrepreneurial freedom advocated by Uber is not present at this point. Drivers who use the Uber app are subject to the operation of the algorithm and thus subject to modern employer authority by Uber.
Thus ruled court in Amsterdam earlier this month. The case was brought by trade union FNV, which also started a case against Deliveroo earlier this year. There ruled the Amsterdam Court of Appeal that Deliveroo couriers also qualify as employees. In doing so, FNV achieved its second victory this year against an online platform service.
Uber is part of the international Uber group, which developed, among other things, the well-known cab app. In doing so, Uber focuses on the so-called "call and order market. Through its app, it allows cab drivers to operate in that market. To access the platform, however, drivers must first agree to the "Terms and Conditions for Independent Uber Partners."
If they agree - these terms stipulate - then they do so as an entrepreneur, and not as an employee of Uber. In effect, Uber is saying here that the agreement with a driver should be considered an assignment contract, not an employment contract.
According to FNV, on the other hand, there is indeed an employment contract: Uber is their employer and the platform should therefore also fall under the scope of the Collective Labor Agreement for Taxi Transport.
To this end, the union argued that Uber is much more than an electronic bulletin board that brings together supply and demand. In fact, the platform is said to have organized the transportation service in great detail. For example, Uber selects cars, drivers, and unilaterally adjusts fares and supply to match demand. The platform also controls drivers' behavior through ratings, rules, fares, monitors and warnings.
At its core, then, the dispute boils down to whether the relationship between Uber and the drivers - who transport passengers by road in person via the Uber app using a passenger car - should be qualified as an employment contract. To assess whether that was indeed the case, the court tested against three elements: labor, wages and authority.
Uber drivers transport passengers for Uber, to whom a portion of the fare accrues in return. Therefore, there was no doubt as to whether the drivers perform labor for Uber, according to the court.
Uber's defense that it merely runs a platform on which users enter into an agreement with each other did not hold up. Transportation services are the core of Uber's business. The fact that Uber's relationship with drivers is shaped by a subscription and that drivers must remit a commission to Uber for the use of the app does not alter that judgment.
Furthermore, it was also not in dispute that the drivers receive compensation for each ride. This remuneration consists of the fare determined by Uber through an algorithm minus the service fee. The fact that another entity (Uber Pay) collects this and pays the drivers the portion due to them did not lead to a different verdict.
The denomination of the salary is irrelevant, as is the form of payment.
Finally, the court considered the relationship of authority, which it said remains the key criterion for distinguishing employment contracts from other employment relationships.
Unlike the classical model, this criterion of authority does have a more indirect (and often digitally) controlling interpretation in today's technology-dominated age. Indeed, employees have become increasingly independent in recent decades. They also more often choose when they want to work. Today, therefore, between an employer and employee there is often a modern relationship of authority. So too in this case.
After all, it is the Uber app's algorithm that determines the route, fare and distribution of rides. All based on the priorities set by Uber.
For example, a driver has no influence on the price, therefore there is no free negotiation between him and his passenger. While he can cancel an accepted ride, if he does so with regularity he will be excluded. The Uber app also has a disciplinary effect. A low rating can lead to removal from the platform, while a higher rating will lead to a favorable ranking with all kinds of (financial) advantages. On top of that, Uber unilaterally settles complaints and can adjust its app settings without consultation.
The court therefore concluded that the entrepreneurial freedom so advocated by Uber is in fact absent. At least, where it comes to the question of whether this is an employment contract or an assignment contract. Cab drivers who use the Uber app are subject to the operation of the algorithm and thus fall under a modern employer's authority by Uber.
Although the parties agreed on paper that the drivers would be self-employed, the actual performance of the system rigged by Uber contains all the hallmarks of an employment contract.
An employment contract therefore exists between the platform and the drivers. In addition, the court ruled that Uber ''as a legal entity that has one or more employees working in the Netherlands'' falls under the scope of the CAO Taxivertransport. This means that Uber must comply with all obligations under it. For example, some of the drivers are entitled to back pay. Partly because they were never paid for waiting time, even though the CAO requires this.
That there would in fact be an employment contract - after the recent Deliveroo ruling - did not come completely out of the blue. An interesting addition of this ruling is that the relationship of authority present follows very explicitly from the operation of an algorithm. The implications of these two rulings for the platform economy are yet to be seen. The rulings fit well in the line of recent years that online platforms are becoming more and more responsible.
