The question of whether Uber’s Riders enter into a contract with Uber or with individual Drivers was decided by the Court of Appeal last December in deciding what employment rights the Drivers had.
The fairly scathing lead judgement, which found that the Drivers were actually working for Uber, said
For [Uber] to be stating to its statutory regulator that it is operating a private hire vehicle service in London and is a fit and proper person to do so, while at the same time arguing in this litigation that it is merely an affiliate of a Dutch-registered company which licenses tens of thousands of proprietors of small businesses to use its software, contributes to the air of contrivance and artificiality which pervade’s Uber’s case
Sounded fair enough to me. However, the court did not come to a unanimous decision, with Lord Underhill disagreeing with the other two judges, and Uber has been given permission to appeal to the Supreme Court. I wrote something about the original decision in this blog after the original Employment Tribunal judgement and nothing since has changed my mind. In particular what Lord Underhill said in the Court of Appeal certainly hasn’t changed my mind. His central points seems to be in the following paragraph from his dissenting opinion, in which he argues that rather than there being contrived and artificial arrangements, Uber Drivers in reality conduct their business just like any other taxi driver and so they should be seen as entering into a direct contract with the passenger in just the same way…
The Tribunal found it “absurd” to believe that the driver enters into a contract with a person whose identity he does not know and who does not know his to drive him or her to a destination unknown at the time that he accepts the job: see paras. 91 and 92.
As to the passenger and driver not knowing each other’s names, I cannot see that this is inconsistent with the existence of a contract between them: that is the case not only whenever a passenger flags a taxi in the street but also whenever he or she books a minicab operating on the model described above where the driver is the principal. (In fact the passenger at least is not entirely in the dark, since Uber supplies the driver’s first name, and he or she will be able to ascertain his identity if necessary because he will have to display his private hire licence.)
As for the driver not knowing the destination in advance, this is the case whether he contracts with the passenger or with Uber, and I do not see how it is relevant to that question. But I do not in any event see what the supposed absurdity consists in: the driver is in business to drive passengers where they want to go [footnote 11], and it is not likely to be of importance to him (at least for any legitimate reason [footnote 12]) to know the destination at the point of acceptance.
The first point here — that knowing each other’s names doesn’t say anything about the existence or nature of a contract is fairly obviously true. On hailing and jumping into a black cab, there is rarely any exchange of names. But the second point, not knowing the destination, is quite another matter and I think is key. When a request is made via the app, Uber quotes the passenger a price to take them to the place they have specified which the passenger may accept or decline. Uber quotes the price without any reference to its drivers and to my mind, if the passenger accepts the price then at that point the passenger will understand that Uber has agreed to provide them with transportation from A to B for the stated price. At that point, no Driver has been involved in the agreement at all.
Uber then canvasses its drivers to see which are available and willing to pick up the passenger from the starting point. It directs one of these drivers to the starting point to pick up the passenger to whom Uber has quoted a price for the requested journey. On pickup, the driver is only then told the journey on which he or she will carry the passenger and for which journey Uber has already agreed a price.
When the judge says ‘As for the driver not knowing the destination in advance, this is the case whether he contracts with the passenger or with Uber’ he can only be stating that regardless of the legal analysis of who the contract is between, the fact is that if drivers are using the app, they will not know the required destination requested. Well yes, because that’s the way the app works. So to say that this is so regardless of the contractual position is to put things the wrong way around. The court is trying to ascertain from the facts what the actual contractual position is in reality. So the relevant matter is whether the knowledge of destination is a pointer to which of Uber and the driver is supplying transport services to the passenger.
That Uber does know the destination but does not pass on that request to its Drivers, but merely tells a driver who agrees to do an unspecified job the starting point for the trip to my mind makes things fundamentally different from the minicab model: the booking centre in that case will offer the job to one of its drivers with details of price and destination. While I’m happy to be corrected, I have never heard of a model where drivers are asked to take on a job without them being able to discover where they are going for the fare offered. Now bearing in mind how the lengthy discussions in the judgement are all about real-world effect, the judge rather slips when he says he cannot see what absurdity might result because he cannot think of any legitimate reason why the driver should need to know the destination before taking on the job. He is able to think of illegitimate reasons that he footnotes…
12 It would not be legitimate to be unwilling to take passengers to unpopular areas (as in the common, though doubtless unfair, belief that some black cabs in London are reluctant to go “south of the river” at night). That is of course one of the reasons why destinations are not revealed at the point of offer.
The ‘of course’ there is interesting. The passenger has stated the chosen destination to Uber, just as he or she would to a black cab driver or a minicab driver (or ordinary booking centre). But Uber then deliberately withholds it from its own Drivers, so where does the ‘of course’ come from when this clearly distinguishes Uber’s drivers from anyone driving for themselves or via a genuine intermediary?
As to his inability to think of any legitimate reason why the destination would be of any importance to a driver, he overlooks that a key part of Uber’s pitch to potential drivers is that they can work when they want to and fit driving around other things in their busy lives. As I said in my blog after the original Employment Tribunal judgement
Reading the judgement though, it doesn’t really seem true that Uber drivers may set their own working hours and decide with whom they do business. Drivers have a choice to accept or decline a journey only on the basis of where the customer is, not who they are or how long the job will take. They do not know anything about the customer apart from their first name nor do they know where the customer wants to go (although of course Uber does) before accepting the job. So a driver might accept a nearby request thinking that she can fit in a final job before she has to pick up her child from school (being prepared to work for another half hour) but find only after accepting the job that the journey will actually take over an hour.
It is entirely legitimate that someone might wish to work only at or until certain times, whether for a routine reason like this or even for an exceptional one like a dental appointment. Far from an irrelevant matter or an absurdity, this seems a fundamental issue that is key to determining the reality of the arrangements.
In a further inability to consider what things might really be like, the judge’s statement that ‘the driver is in business to drive passengers where they want to go’ is footnoted…
11 Counsel were unable to confirm at the hearing whether there is any limit on the destinations that Uber’s software will accept, or, if not, whether drivers in London are expected to take passengers literally anywhere in the UK. It seems very unlikely that they are, but almost all destinations are presumably in or around London, and cases in which it is one that could not reasonably have been contemplated must be too rare to affect the analysis.
As to whether such cases must be too rare to affect the analysis I asked the first Uber user I know and he immediately came up with the following Ride he had taken. It starts 40 miles from central London in Fleet and ends 50 miles away in Alton. Apparently the driver said he had come out from Croydon, making the distances a few miles further each way. When the judge airily referred to destinations all being ‘in or around London’ I would be surprised if he had in mind something like this involving a round trip of around 110 miles. Obviously in this particular case the driver would have known he was in for a long journey because the starting point was a considerable way away, and so other available drivers might not have clicked to accept the job for that reason. But it must be inferable that Uber would have offered the passenger transport to the same destination 50 miles outside London if the starting point had been central London or Croydon. I know there’s not much traffic at 2.45 in the morning, but that’s not really the point, as even traffic-free the round trip will be over two hours if you stick to the speed limits.
As to being in business to drive passengers where they want to go, a black cab driver is only required to undertake journeys of 12 miles or an hours duration, with a destination in Greater London.
Now my point here is that the court’s role in this case was to decide on issues of law, not of fact. The Employment Tribunal is the court of fact, and appeal from the Employment Tribunal lies only (except in exceptional cases) on issues of law. That is, the higher courts must consider how the law applies to the facts that were established in the Employment Tribunal. The lead judgement confirmed
Not only do we see no reason to disagree with the factual conclusions of the Employment Tribunal as to the working relationship between Uber and the drivers, but we consider that the Tribunal was plainly correct
For the dissenting judge, it is clear that it was material to his view whether as a matter of fact drivers in London are expected to take passengers all over the place. But it also appears that he simply made a decision himself about what was that matter of fact on the basis of his own quite unsubstantiated assumption that rides not in or around London must be too rare to affect the analysis. To my mind it was impermissible for the judge to have made such an assumption about a matter of fact when he himself acknowledged that no evidence had been put before him.
Similarly his comments in relation to the fact that Uber will log off Drivers for a while if they fail to volunteer for three offers in a row or cancel trips ‘too often’ once they discover where the destination is give pause for thought…
Mr Galbraith-Marten submitted that that term necessarily demonstrated that drivers were under a contractual obligation to Uber (he would say ULL) to be available to work when logged on. I do not accept that. It is equally consistent with Uber’s case that its essential relationship with drivers is to license them the use of the App. It is consistent with that case that it should reserve the right to take steps which disincentivise drivers from being logged on when they are not in fact available (which can give would-be passengers a misleading idea of how many cars are in fact available nearby). That is not the same as a penalty for breach of a positive obligation owed to it or an affiliate.
Again this seems predicated on the assumption that there is no reason why a Driver with the app turned on might not be available for any and every journey a Rider might wish. It would of course be very easy indeed for Uber to tweak the app to allow a Driver to indicate to Uber his or her true availability in terms of time left during which they are prepared to drive or the distance the Driver is prepared to go. And this seems to distinguish Uber from other intermediaries such as booking centres. If I am genuinely working for myself albeit via such an intermediary I can tell them when I turn up “I need to be done by 3 o’clock today” and expect them not to send me on an hour-long journey at ten to three, or “I don’t want to take anyone further than Guildford” and expect them not to send me to Southampton, let alone penalise me if they did then offer me such jobs and I declined them. But the app appears to offer no such function. Necessarily, of course, unless every driver with the app turned on is actually prepared to undertake literally any journey to any destination, some would-be passengers are always given a misleading idea of how many cars are available.
So when he ends…
For those reasons I do not believe that Uber drivers at any stage provide services to ULL under a contract with it. The Agreement provides that they do not, and none of the ET’s factual findings, individually or cumulatively, is capable of supporting a conclusion that the true agreement is different. The ET’s conclusion was accordingly wrong in law, and I would have allowed the appeal on the main issue.
it seems to me that the factual findings do clearly support a conclusion that the Drivers are providing their services to Uber (and thus Uber providing services to Riders), but the judge simply over-rides key findings by assuming his own set of facts. I’d be surprised if the Supreme Court did the same….