The terrible Supreme Court decision on Uber

The Supreme Court has ruled that four Uber drivers are employees of Uber, despite written agreements they are contractors, not employees.

The practical effect of this decision is terrible. Uber has been great for passengers. Not only can we hold drivers to account through ratings, we save a lot of money. An Uber to the airport costs me around $55 and a taxi around $110. If Uber wasn’t around, then it would almost cost me more getting to the airport than it does actually flying to Auckland.

Roger Partridge touches on a key issue that he thinks the Supreme Court didn’t consider – employees have a duty of loyalty.

The duty of loyalty (or fidelity) is a core incident of the employment relationship. Under settled New Zealand law, employees must not, during working time, take competing work in preference to their employer. The duty requires employees to act in their employer’s interests and not compete with the employer’s business during the period they are “at work.” …

Drivers with multiple apps like Uber, DiDi, Bolt – compare offers simultaneously. When Uber presents a ride request, a multi-apping driver evaluates it against competing offers appearing on other screens at precisely the same moment. If Didi offers a better fare or Ola shows a shorter pickup distance, the driver accepts that ride instead. The driver’s income depends on this instantaneous cross-platform comparison. 

This is not like a nurse who works part-time at two different hospitals. It is continuously and systematically taking work for competing platforms during the period they purport to be available to Uber. Under orthodox employment law principles, this conduct is the paradigmatic example of what the duty of loyalty forbids. 

So surely common sense says Uber drivers can’t be employees as they are free to work for competing platforms. So how did the Supreme Court deal with this:

The Court’s conclusion that multi-apping is impractical (at [124]) also mistakes how platforms work. A driver who wishes to accept a trip from DiDi or Bolt need only log out of the Uber app after accepting the rival job. Because Uber monitors refusals only while drivers remain logged in, logging out eliminates any sanction. The driver simply forgoes earning Uber ratings while unavailable. This is not a “penalty” for multi-apping – it is a feature of how the platforms operate. 

The Court conflated refusing an Uber ride while logged in (which triggers consequences) with being logged out before a ride is offered (which does not).  

So it takes around 10 seconds for a driver to log out and be able to take the other platform ride.

The minimum wage compounds the absurdity. On the Court’s own reasoning, each of those “employers” would also owe the driver the minimum wage for the same hour of work. Employment law does not – and cannot – recognise concurrent minimum-wage obligations across competing firms, yet that is the inevitable consequence of the Court’s classification. 

It really is a bizarre ruling that seems ideological, and not at all practical.

The Government needs to change the law.