“The upshot of that oversupply has been poverty, pollution and congestion.”
However, questions still remain about how the new classification will work, and how it affects gig economy workers who work not only for Uber, but also for other competing apps.
Mr Aslam, who claims Uber’s practices forced him to leave the trade as he couldn’t make ends meet, is considering becoming a driver for the app again. But he is upset that it took so long.
“It took us six years to establish what we should have got in 2015. Someone somewhere, in the government or the regulator, massively let down these workers, many of whom are in a precarious position,” he said.
Mr Farrar points out that with fares down 80% due to the pandemic, many drivers have been struggling financially and feel trapped in Uber’s system.
“We’re seeing many of our members earning £30 gross a day right now,” he said, explaining that the self-employment grants issued by the government only cover 80% of a driver’s profits, which isn’t even enough to pay for their costs.
“If we had these rights today, those drivers could at least earn a minimum wage to live on.”
Impact on Uber
When Uber listed its shares in the US in 2019, its filing with the US Securities and Exchange Commission (SEC) included a section on risks to its business.
The company said in this section that if it had to classify drivers as workers, it would “incur significant additional expenses” in compensating the drivers for things such as the minimum wage and overtime.
“Further, any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition,” it added.
Uber also wrote in the filing that if Mr Farrar and Mr Aslam were to win their case, HM Revenue & Customs (HMRC) would then classify the firm as a transport provider, and Uber would need to pay VAT on fares.
The company has long argued that it is a booking agent, which hires self-employed contractors that provide transport.