LONDON — Uber suffered another blow on Friday to its operations in London — its biggest market outside the United States — when an employment tribunal rejected the company’s argument that its drivers were independent contractors.
The decision, which affirmed a ruling made last year, means Uber will have to ensure its drivers are paid a minimum wage and entitled to time off, casting doubt on the hiring model used by Uber and by other businesses in the so-called gig economy that rely on workers who do not have a formal contract as permanent employees.
Companies argue that such a system increases the flexibility for both workers and employers in the modern economy, but critics say it is exploitative and deprives employees of key benefits like unemployment insurance.
For Uber, the ruling is the second hit to its business in London in recent months. In September, the city’s transport authority issued a surprising decision to bar the ride-hailing service from operating in the British capital. Uber is appealing that ruling, which said the company was not “fit and proper” to operate in the city. It can continue offering its services until a final ruling is made.
In the case before the employment tribunal on Friday, two Uber drivers, James Farrar and Yaseen Aslam, had challenged the company on behalf of a group of 19 drivers, saying that the service had denied them basic protections by classifying them as self-employed. Uber relied on an argument it has used repeatedly around the world: Its drivers were independent contractors.
In a statement following the ruling, Uber’s acting head in Britain, Tom Elvidge, said the company would appeal the decision. Once it does so, the case would be heard by the Court of Appeal.It could eventually be referred to Britain’s Supreme Court.
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